CAM NC and its...B1 B2 P 1 P 2 Legend: P 0 Price step (P 0 =Regulated Tariff) B1 - Bn Bid 1 to Bid n Example 4: Undersell B3 B4 B6 P 1.1 3. bidding round (2.0) B1 P 1.2 B2 B3 B4 4

CAM NC and its implementation2019.12.05

The PRISMA capacity platform offers easy access to infrastructure operators for the European energy community.

PRISMA in a nutshell

+640Shippers

+1700Network pointson the platform

39TSOs

4SSOs

2

+86.000Concluded contract in 2018

+7.800Secondary trades in 2018

Agenda

Main elements of the regulation

Auction Algorithms

Secondary Market

Auction results

3

Agenda


Auction Algorithms

Secondary Market

Auction results

4

What is in the CAM NC

5

Most relevant obligations for capacity allocation • Standard capacity products (art. 9)• Publication and start of the auctions (from art. 11 to art. 15)• Allocation mechanisms: “Ascending clock auction” (art. 17) and

“Uniform-price auction” (art. 18)• Bundled capacity products (art. 19)• Capacity booking platform and secondary Market (art.37)

6

Standard Capacity Products

Yearly

Quarterly

Monthly

Daily

Within-day Balance of the day

Next day

Next month

Max 12 months

Min 5 years and max 15 years

7

• Same products could be offered as “firm” or as “interruptible” capacity

• All available capacity shall be offered bundled

Ascending clock Uniform price

ENTSOG Auction calendar

8

Organization of WD products

16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 06:00 08:00 10:00 11:0004:00 05:00 07:00 09:00 12:00 13:00 14:00 15:00 17:00 18:0016:00 19:00 20:00 21:00 22:00 23:00 00:00 01:00 02:00 03:00 06:0004:00 05:00

Gas Day DGas Day D-1

24h24h23h22h21h20h19h18h17h16h15h14h13h12h11h10h

9h8h7h6h5h4h3h2h1h

• Day-ahead auction for the product runtime of the next gas day takes place everyday at 16:30 CE(S)T

• The first within-day auction has the same product runtime (06:00-06:00) and it starts at 19:00 CE(S)T

• Every consecutive within-day auctions starts at full hour and lasts for 30 minutes.

• The last Within-day auction starts at 01:00 for the product runtime of 05:00 – 06:00(the same gas day)

9

Agenda


Auction Algorithms

Secondary Market

Auction results

10

Auction algorithmsAscending clock

11

Auction algorithm – Ascending clockPr

ice

Avai

labl

eca

paci

ty

1 2 301

23

Amount

• Demand and availablecapacity

• Defined price steps• Ascending price

12

Auction algorithm – Ascending clock

• There are different possible behaviors• Example 1: Undersell in first bidding round• Example 2: Clearance in first bidding round• Example 3: Oversell • Example 4: Undersell

13

Ascending ClockExample 1: Undersell in 1st bidding round

14

Auction algorithm – Ascending clockExample 1: Undersell in 1st bidding round

• Round 0.0, RT• Less demand than available

capacity• Auction closes after Round

0.0• Only RT will be charged

B1 B2 B3

Price

Amount

avail. capacity

1. biddinground (0.0)

P0

Legend:P0 Regulated TariffB1 - Bn Bid 1 to Bid n

15

Ascending ClockExample 2: Clearance in first bidding round

16

Auction algorithm – Ascending clockExample 2: Clearance in first bidding round

• Round 0.0, only Regulated Tariff (RT) applies

• The available capacity is fully requested by the four participants

• The auction closes after round 0.0

• Only RT will be charged

B1 B2 B3 B4

Price

Amount

avail. capacity


P0


17

Ascending ClockExample 3: Oversell

18


• Round 0.0, RT• More demand than available

capacity (oversell)

B1 B2 B3 B4 B5 B6

Price


Amount

avail. capacity

P0


Example 3: Oversell

19


• Round 1.0, RT + 1 large price step (LPS)

• B3 reduced bid• B5 dropped out• Still an oversell situation

P0

B1 B2 B3 B4 B6 2. bidding round (1.0)

P1

B4 B6

Price

Amount

avail. capacity

1. biddinground (0.0)B1 B2 B3 B5


Example 3: Oversell

20


• Round 2.0, RT + 2 LPSs• B4 reduces their bid• B6 drops out• Perfect sell-out• The auction closes after

round 2.0 with RT + 2 LPSs applied

Price


3. bidding round (0.0)B1 B2 B3 B4

P2

Example 3: Oversell

Amount

avail. capacity

B1 B2 B3 B4 B5 B6

B1 B2 B3 B4 B6

P0

P1


21

Ascending ClockExample 4: Undersell

22


• Round 0.0, RT• More demand than available

capacity (oversell)

B1 B2 B3 B4 B5 B6

Price


Amount

avail. capacity

P0


Example 4: Undersell

23


• Round 1.0, RT + 1 large price step (LPS)

• B3 reduced bid• B5 dropped out• Still an oversell situationB1 B2 B3 B4 B6 2. bidding

round (1.0)

P1

B4 B6

Price

Amount

avail. capacity

1. biddinground (0.0)B1 B2 B3 B5



24


• Round 2.0, RT + 2 LPSs• B4 and B6 drop out• This results in an undersell

Price


3. bidding round (2.0)B1 B2 B3

P2

Amount

avail. capacity

B1 B2 B3 B4 B5 B6

B1 B2 B3 B4 B6

P0

P1

Legend:P0 Price step (P0 =Regulated Tariff)B1 - Bn Bid 1 to Bid n


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B1 B2 B3 B4


• Previous LPS (2.0) is reversed• 1st small price step (SMP) is

added to RT + 1 LPS• This is now Round 1.1, RT +

1LPS + 1SMP• B4 is back in• B1, B2 & B3 have to bid min. P1

amount• Oversell

Price


Amount

avail. capacity

B1 B2

P1

P2



B3 B4 B6

P1.1



B1 B2 B3 B4 B5 B6

P0

26

B1 B2 B3 B4


• Round 1.2, RT + 1LPS + 2SMPs• B4 reduces their requested

capacity• B1, B2 & B3 still have to stick to

their capacity• Auction closes with perfect

sell-out• RT + 1LPS + 2SMPs will be

charged

Price


Amount

avail. capacity

B1 B2

P1

P2



B3 B4 B6

P1.1


B1P1.2

B2 B3 B4 4. biddinground (1.2)

B1 B2 B3 B4 B5 B6

P0

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Bearing in mind

• Participation in first bidding round

• Ratio between the total demand and the available capacity

• Amount of the bid

28

Auction algorithmsUniform price

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Auction algorithm – Uniform price

• There are different possible behaviors• Example 1: Fill procedure• Example 2: Kill procedure• Example 3: Pro-rata allocation• Example 4: Demand lower than available capacity

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• Uniform price auctions only have one bidding round

• Bids contain a surcharge, a minimum and a maximum capacity amount

• Evaluation and allocation of capacity is done after the bidding round is closed


A

Surcharge

avail. capacity

B

Amount

Amount

Surc

harg

e

Maximum amount Shipper B

Minimum amount Shipper B

Maximum amount Shipper A

Minimum amount Shipper A

Legend:

Basics

Clearing Price

31

Uniform PriceExample 1: Fill Procedure

32

C

• During evaluation, overdemand is detected

• A & B get full amounts because of the higher surcharge

• C’s maximum exceeds available capacity

• C’s maximum is cut to fill the remaining capacity


A

Surcharge

avail. capacity

B

Amount





Legend:

Maximum amount Shipper C

Minimum amount Shipper C

Example 1: Fill procedure

33

CC



• C’s maximum exceeds available capacity

• C’s maximum is cut to fill the remaining capacity


A

Surcharge

avail. capacity

B

Amount





Legend:




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C

• Bid with minimum surcharge that gets capacity sets clearing price for the auction


A

Surcharge

avail. capacity

B

Amount





Legend:




Clearing Price

35

Uniform PriceExample 2: Kill Procedure

36

DDC



• C’s Minimum exceeds available capacity

• C’s bid is killed and D is cut and used to fill the remaining capacity


A

Surcharge

avail. capacity

B

Amount





Legend:



Maximum amount Shipper D

Minimum amount Shipper D

Example 2: Kill procedure

37

D

• Bid with minimum surcharge that gets capacity sets clearing price for the auction (D)


A

Surcharge

avail. capacity

B

Amount





Legend:





Example 2: Kill procedure

Clearing Price

38

Uniform PriceExample 3: Pro-Rata Allocation

39

C



• Together, C&D exceed the available capacity

• Prevent discrimination• Pro-rata used


A

Surcharge

avail. capacity

B

Amount

Example 3: Pro-rata allocation

D





Legend:





40

C



• Together, C&D exceed the available capacity

• Prevent discrimination• Pro-rata used


A

Surcharge

avail. capacity

B

Amount


D





Legend:





41

Auction algorithm – Uniform priceExample 3: Pro-rata allocation

• Pro rata formula

Maximum demand of bid

Sum of all bids at this pricex remaining capacity

42

• Bid with minimum surcharge that gets capacity sets clearing price for the auction (C&D)


A

Surcharge

avail. capacity

B

Amount


Clearing Price





Legend:





C D

43

Uniform PriceExample 4: Demand lower than available capacity

44

• Underdemand is detected• Clearing price is set to 0

surcharge• Only RT applies


A

Surcharge

avail. capacity

B

Amount





Legend:


Clearing Price

45

Agenda


Auction Algorithms

Secondary Market

Auction results

46

Secondary Market

Proposal Response Trade Creation Validation Publishing

of Trade

2 Types ofproposals:

To buy or to sell

47

Secondary Market

Two types of trades:

Transfer of use

• Use of capacitytransferred

• Obligations towardsTSOs stay with sellingshipper

Assignment

• Full rights and obligations aretransferred tocounterparty

48

Secondary Market

• Three different trading procedures:• Over the counter (OTC)• First come first served (FCFS)• Call for orders (CFO)

49

Secondary Market

• Helpful features:• Trader lists• Trading conditions• EIC search and anonymous trading• Different trade proposal stati: new, closed, rejected, expired, withdrawn

50

Agenda


Auction Algorithms

Secondary Market

Auction results

51

Yearly auctions

52

Similar results as for 2018, the majority of the capacity is bought for next gas year.

Note:The sold capacity refers to firm products and it doesn’t take in consideration the capacity conversion from unbundled to bund led.

Quarterly auctions

53

The introduction of multiple sessions during the year, in which quarterly capacity is offered, increased the demand for quarterly products.Note:The sold capacity refers to firm products and it doesn’t take in consideration the capacity conversion from unbundled to bund led.

Monthly auctions

54

The demand of monthly products doesn’t seem to be affected by the introduction of multi-session of quarterly auctions.Note:The sold capacity refers to firm products and it doesn’t take in consideration the capacity conversion from unbundled to bund led.

Daily auctions – sold in a month

55

Also the demand of daily products is characterized by high volatility.


Within day auctions – sold in a month

56

Demand of within day products seems to follow the seasons.


Capacity allocated via PRISMA for delivery period

57

The amount of allocated capacity per delivery period increased on a yearly base.


Conclusion

Conclusions

59

CAM NC clearly is supporting the development of well functioning gas markets in the European countries….

… but the market conditions changes since the CAM NC approved.

Amendments will be probably implemented in the upcoming years to further support European gas markets.

Note:A similar assessment is included in the ACER’s Market Monitoring Report 2018; in this report ACER stated that “The implementation of the CAM NC is favouring the possibility for shippers better to profile their capacity portfolio and to incorporate short-term price signals in the management of their capacity at the IPs. Starting from the capacity booked for 2018, more quarterly products and more yearly products were booked via the CAM auctions because of the entry into force of some amendments to the CAM NC. NRAs, the European Commission and ACER could consider the possibility to further increase the frequency of CAM auctions with a standardised timing in order to make them even more useful for the network users.”

Back up

Additional features implemented in PRISMA

Any combination of such services can be selected by TSOs in order to create their own tailored service package

PRISMA currently offers a wide range of services to TSOs around capacity allocation

FCFS capacity allocation

Secondary capacity trading

Reverse capacity auctions

CoreGraphical user interface

User registrationUser management

System automation

REMIT reporting

Capacity linking

Bid limitation

Capacity upgrade (interr. to firm)

Capacity conversion (unbundled to bundled)

Balancing group / portfolio code management

Surrender of capacity

TSO acting as a shipper

1-n bundling

Basic CAMLong-term auctionsDay-ahead auctionsWithin-day auctions

Bundled auctionsIncremental capacity auctionsNetwork point administration

Reporting section

Competing auctions

Multi currency support

Credit limit check Volume based tariff

Specific terms and conditions

Autom. cancellation of interr. day-ahead

auctions

Minimum bid amount

62

63

PRISMA also offers a variety of services to SSOs and shippers

Shipper Services

Additional features and packages (Analyst API, Trader API)

Storage Services

Standard services and add-ons (Allocation, API)

CoreGraphical user interface

User registrationUser management

BasicOffer publication

Bid collection

SSO APISystem automation

Allocation mechanismsAutomatic bid allocation

Click & BookDirect request process

FCFS allocation

Shipper APISystem automation

Shipper self-serviceClick & book add-onsShipper admin access

REMIT reportingSecondary tradingReporting to ACER

Credit managementCredit limit check upon

bid placement

FCFS bookingFirst Come First Served booking functionality

71

FCFS booking

• The platform acts as an intermediary between shipper and TSO* regarding all booking information (e.g. request, confirmation of availability)

• Capacity is sold at the regulated tariff

* FCFS is possible with selected TSOs (depending on national regulation and TSO decision)

Shipper requests capacity

TSO checks if capacity is available

Either confirms or presents alternative

72

FCFS

• Domestic Points• Not all TSOs support it• No auctions – booked as required if available

73

SurrenderOr what to do when you booked too much capacity

74

Surrender

• Return capacity to TSOs for re-marketing• Important:

• TSOs will first market free capacity, then surrendered• A surrender can be partially successful • Not all TSOs offer surrender

75

REMIT Reporting

• Mandatory for all secondary activity• Responsibility to report data lies at shipper• As an Organised Market Place (OMP) PRISMA offers its

registered shippers to report their capacity bookings on the secondary market

80

Documents

CAM NC and its...B1 B2 P 1 P 2 Legend: P 0 Price step (P 0 =Regulated Tariff) B1 - Bn Bid 1 to Bid n Example 4: Undersell B3 B4 B6 P 1.1 3. bidding round (2.0) B1 P 1.2 B2 B3 B4 4