European Developments: Capacity

Transmission Workgroup6th October 2011

Content

Provides an overview of:

ACER Framework Guidelines

ENTSOG CAM Update

Potential key GB impacts

Summary & GB Stakeholder involvement

Framework Guideline

ACER final CAM Framework Guideline published 3rd Aug

ENTSOG original Code delivery date 27thJan 12

New Commission invitation to ENTSOG to deliver a CAM Code now extended to 9th March 12

Changes from Previous Version The relevant clauses shall be amended

within nine months after entry into force of the network code(s)

The standardisation is based on a daily capacity product’s duration from 5:00 to 5:00 UTC/GMT, or any other time period harmonised across the EU as defined by European Network of Transmission System Operators for Gas

At least 10 percent of the available firm capacity at each interconnection point shall be set aside for firm capacity services with a duration of less than one quarter

These rules on mandatory bundling also apply, to the extent that they are relevant, to secondary capacity markets

Sunset Clause revised:

• Parties to agree, NRAs to mediate

• Default rule in case users to not reach agreements

• Sanctions allowed by NRAs to enforce agreements

Commission Guidelines for tariff methodologies related to cross-border trade of natural gas or in the Framework Guidelines for network codes on rules regarding harmonised transmission tariff structures

Web-based platform for primary capacity allocation and secondary capacity trading

Timetable for the implementation of a single EU-wide platform required

European Network Code Development Process

Work programme

ENTSO Agency

Frameworkguidelines

Commission

Preparation of draft Network

CodeCommission

Agency

Comitology

Legally binding Network

Code

Commission

Stakeholder workshops

Consultation

Stakeholder Consultation &

workshops

DECC

GB CodeChange process

ENTSO EU Commission ACER (ERGEG/CEER)

StakeholderConsultation

CAM CodeCurrent Phase

CAM Consultation

Capacity Allocation Mechanism (CAM)

Entsog consultation on CAM draft EU code received 56 responses

GB well represented @10 respondents + Associations

Next Steps:

Publish analysis of responses – now completed 26th Sept

Continue stakeholder dialogue on key aspects

Sunset clause ‘default’ meeting 6th Oct (Brussels)

SJWS Stakeholder meeting planned for 20th Oct (Brussels)

The final EU code is still expected to be published in Jan 2012

Commission extended Code deadline until 9th March

ENTSOG may use additional timeline to carry out a short re-consultation period?

7

Key CAM Documents

Project Plan

Launch Document

All stakeholder (SJWS) meeting material

Draft CAM network code & supporting documents

Consultation responses &

Analysis report

Available from ENTSOG @

http://www.entsog.eu/publications/index_g_cam.html

8

ENTSOG Draft CAM Network Code Overview

In principle similar to GB Entry arrangements however:

Will have impacts to current arrangements

Guidelines applicable to Interconnection Points only

GB Regime

Governance

3rd package Code development / changes

Commitology timelines may not be appropriate for changes

Lighter change process needs consideration

Handbook approach?

UNC Code change process

T&C – Code amendment timeline 9 months

Implementation?

Different rules for IPs

UNC to differentiate between IPs / Non IPs?

Separate IP Code?

GB Regime

Sunset Clause

Within 5 years of the Code coming into force Users need to agree split of contracts either side of the IP to combine (bundle) capacity

ENTSOG to provide a default rule if capacity is not bundled

Does this effect capacity bookings (as already carried out via transparent auction process)?

GB Regime

Mandatory Bundling

Primary and secondary capacity via bundled products

No opportunity to book / trade at flange

Currently capacity sold in aggregate at an ASEP

Bundling applicable to IPs only (Bacton)

Current bookings out to 2025

Licence Baselines

Implications to interconnector operators

Art.22 exemptions

GB Regime

Enduring Exit

Need changes to regime to incorporate auctions

Auction Design

Different to GB Entry auction

Available capacity only no incremental (note: CEER Workplan 2012)

Differing Stakeholders views on key draft Code principles:

LT and MT products

Volume based auction single round, ascending clock multi round, others

ENTSOG Draft CAM Network Code

Standard Products

Concept similar to Entry but differences in the detail design

For LT - Users favoured Quarterly

ENTSOG CAM Consultation Auction - Products

ENTSOG CAM Consultation Auction - Design

GB Regime

Interruptible

No obligation to bundle

Only align interruptible services

Min obligation for day ahead (where firm sold out)

CMP v CAM interaction - within day nom

GB Regime

Incentive Regime

Buy back on a bundled capacity product?

Sale of non-obligated with a bundled product?

Interoperability (CET) 05:00 – 05:00 gas day alignment

CMP

Commission undertook consultation during summer

[New CMP document to be issued soon] - tbc

[Restriction of renom rights not mandatory] – tbc

[Oversell / Buy backs & incentives] - tbc

GB Regime

Other 3rd Package Code Interaction

Tariffs

Framework Guideline – then straight to commotology

Code development step not included

Implementation Timelines

Code changes

IT systems timeline

Joint platform(s) / Separate

Summary

Key Summary Points

GB engagement via forums

Process still open

Potential changes to GB regime at IPs

Multiple Code development & interaction

GB engagement & support in EU Code development welcomed

Further EU engagement needed to make stakeholders views understood

More to come!