European Workgroup
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European Workgroup
1st May 2014
1. General Update
2
Code Status Update
Code
Current Status
Implementation date
Congestion
Management
(CMP)
Implemented
1st October 2013 (Fixed)
Capacity
Allocation
Mechanism
(CAM)
CAM approved for EU wide implementation at relevant EU IPs.
1st November 2015
(Fixed)
Gas Balancing
(BAL)
BAL approved for EU wide implementation 26th March 2014 (Commission
Regulation (EU) No 312/2014 establishing a Network Code on Gas Balancing of
Transmission Networks.)
Interoperability In comitology. Comitology meetings postponed from 28th April and 11th July 2014,
& Data
new dates TBC.
Exchange (INT)
Under development. Code to be submitted 31st December 2014.
Tariffs
Incremental
Capacity
Under development. Incremental Capacity to be introduced via combination of
new articles in CAM Network Code and via Tariffs Network Code. Code
amendment to be submitted 31st December 2014.
1st Oct 2015 (subject to
NRA approval for
additional 12 months)
(Fixed)
Q4 2015 (Estimated)
Estimated earliest mid
January 2017. Applicable
from October 2017.
Applicable from March
2017
Gas Codes Timeline
Status of Development of European Gas Network Codes
Future dates are subject to change
KEY
Dates shown in italics are best approximations based on current understanding.
Activities undertaken by ACER
It has been necessary to 'round' some dates for the benefits of the diagram
Activities undertaken by ENTSOG
Activities undertaken by European Commission
TODAY
Balancing
Comitology Phase
Comitology
ACER
Review
ENTSOG
ACER
revision
Review
of Code
Comitology
(duration unknown)
Comitology
Tariffs
Stakeholder Workgroups
ACER Develops
Framework
Guidelines on
Interoperability &
Data Exchange
Comitology
ACER Review
ENTSOG Drafting
Initial drafting
ACER Develops
Framework
Guidelines on
Tariffs
Consu
ltation
Finalise
drafting
ACER Review
Go Live (?)
Interoperability & Data
Exchange
Finalise
drafting
Go Live
ENTSOG Drafting
Initial Cons
draftin ultatio
g
n
Comitology
(duration unknown)
ENTSOG Drafting
FG Extension
Initial drafting
Cons
ultati
on
Finalise
drafting
ACER Review
Comitology
(duration unknown)
Go Live (?)
Post-Comitology
2016
Go Live
Capacity Allocation
Mechanisms (CAM)
2015
Go Live
Implementation of CMP
obligations for 1st October
2013
2014
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Congestion Management
Principles (CMP)
2013
Mar
Next Step
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
2012
Network Code / Guideline
Road Map
Notes: 1) Short term UIOLI may not be required for NTS
2) Long term capacity auctions may need to be delivered in conjunction with short term auctions
2. EU Code Updates
Gas allocations at IPs under the EU Interoperability
Code
Background – the current GB
allocations regime
 The GB commercial regime has always kept
‘transportation’ and ‘energy’ responsibilities separate
 Shippers are allocated gas according to measured
quantities
 Shippers use allocation agents to administer allocations
on their behalf based on measured quantities - and to
send allocation statements to NG
8
Background – Interoperability
Code provisions and stakeholder views
 TSOs must agree a nomination matching rule/process
and for this to be included in the Interconnection
Agreement (IA)
 ‘allocate as nominate with Operational Balancing
Account (OBA)’ allocation rule envisaged, and for the
allocation rule to be included in the IA*
 OBA favoured by IUK, BBL and supported by Gaslink –
NG working with adjacent TSOs to facilitate OBAs
(retaining NG’s residual balancing role)
*for any IP, an OBA will be used if at least 1
TSO wants this arrangement.
9
What is an OBA?
Nominates 4 Units
Shipper
TSO
Allocates 4 Units
4.01 Units steered
Across the IP
Operational
Balancing
Account
= (4 – 4.01)
= 0.01
• GB current regime: 4.01 units would be allocated to shippers and
scheduling charges apply for the 0.01 ‘steering error’
• OBA regime: 0.01 is allocated to the OBA which is corrected by a
subsequent physical steer of flow between TSOs
OBA key issues and implications
 Size of steering tolerance
 Interactions with other aspects of the GB regime
 Steering tolerance breaches must be minimised in order
to comply with the Interoperability Code
 An option in relation to breaches in steering tolerance is
reversion to allocate as measured
11
National Grid NTS’
proposed approach (1)
 An allocate as nominate regime appears to remove the
need for an agent to administer allocations on shippers’
behalf
 …therefore, NG’s proposed approach is to perform
matching / allocation process directly with adjacent TSO,
as envisaged by the Code (No Agents)
 Shippers could continue to be able to nominate agents
for other communications under UNC TPD V
12
National Grid NTS’ proposed approach (2)
 ‘De-designate’ IP allocation agents in order to enable
direct TSO-TSO arrangements under ‘allocate as
nominate with OBA’
 National Grid NTS to liaise with Ofgem before issuing
Notice to Users of intent to de-designate, with briefing
note - via Joint Office
 National Grid NTS to ensure Notice period is sufficient
(issued by Sept 2014) to enable changes by Users and
Agents to their own agreements
13
Indicative timeline
Task
Timeline
Negotiate terms with adjacent TSOs
to facilitate OBAs
Qtr 2 – Qtr 4 2014
EU Workgroup discussions
May – June 2014
UNC Mod raised
Qtr 3 2014
UNC Mod development
Qtr 3 2014 – early Qtr 1 2015
(subject to revised comitology dates)
Liaison with Ofgem re IP allocation
agents
Qtr 3 2014
Notification of de-designation of
allocation agents and briefing note
sent to Users via Joint Office
Qtr 3 2014
14
Summary and next steps
 National Grid NTS considers that an OBA allocation
regime will be required at all three IPs
 Changes will be required both to the Interconnection
Agreements and UNC
 We propose to engage in parallel with our adjacent
TSOs and GB shippers to agree the OBA design
 Interactions with other aspects of the GB regime will
also be explored (e.g. constraint management, meter
reconciliation)
 Progress update to be shared at the June European
Workgroup meeting
15
Tariff Code & Incremental Capacity Amendment
European Network Code
Development Process
ENTSO
EU Commission
ACER (ERGEG/CEER)
Work
programme
ENTSO
Agency
Commission
Stakeholder
Consultation
Stakeholder
workshops
We are
here
Preparation of
draft Network
Code
Framework
guidelines
Stakeholder
Consultation &
workshops
Commission
Agency
Consultation
Commission
Comitology
DECC
Legally binding
Network
Code
GB Code
Change process
17
EU Tariff Code update
 ENTSOG Stakeholder Joints Working Sessions now complete
 ENTSOG now developing draft Code based on ACER FG and
taking account of stakeholder feedback received during SJWS
process
 Code based on published Business Rules
 http://www.entsog.eu/publications/tariffs#TAR-NC-MEETINGS-SJWS-WORKSHOPS
 Draft TAR NC due for approval within ENTSOG’s internal
governance process by mid-May
 Draft Code and supporting document published end May
 Public Consultation on the draft TAR NC will take place from the
end of May to the end of July
 Next Stakeholder Workshop – 25th June
Structure of the Draft TAR NC
Recitals
Chapter 1 General Provisions
• Subject matter
• Scope
• Definitions
Cost Allocation
Chapter 2 Methodologies
•
•
•
•
•
•
•
•
Link to transmission revenue
Inputs
Entry/exit split
Selection and approval process/criteria
Cost allocation methodologies
Secondary Adjustments
Cost allocation test
Storage
19
Structure of the Draft TAR NC
Chapter 3 Publication Requirements
•
•
•
•
•
•
Aims of information publication
What to publish
How to publish
Publication of information for multiple TSOs
Tariff setting year
Publication notice period
Chapter 4 Reserve Prices
• Firm standard capacity product pricing (multipliers and seasonal factors)
• Interruptible capacity pricing (uni- and bi-directional interruptible capacity)
Chapter 5 Revenue Reconciliation
•
•
•
•
Aims of revenue reconciliation
Under/over revenue recovery
Regulatory account
Reconciliation of the regulatory account
20
Structure of the Draft TAR NC
Chapter 6 CAM Related Topics
• VIP pricing
• Bundles capacity pricing
• Payable Price
Chapter 7 Incremental and New Capacity
• Publication requirements
• Economic test
• Determination of the price
Chapter 8 Final and Transitional Provisions
• Mitigating Measures
• Entry into force
21
EU Tariff Code update - issues
 Fixed Price vs Floating price at IPs
 ACER clearly states only Floating is allowed (i.e. the price paid at time of
use will not be the same as price allocated in auction)
 Strong shipper feedback to retain option of allowing fixed price – especially
for incremental capacity.
 Initial Draft Code from ENTSOG likely to allow both Fixed & Floating
 Shorthaul at IPs at risk due to loss of commodity charge at IPs
 NG working with ENTSOG to preserve this product
 Mitigation measures: shippers pushing for one-off reset of long-term capacity
contracts when Code comes into effect (i.e. right to cancel contracts due to
application of different pricing methodology)
 NG has requested ENTSOG legal team to see if Tariff Code can legally include
provisions to allow this option.
 Standardisation of Gas Tariff Year (1 Jan vs 1 Oct)
 problems for GB if 1 Jan chosen (would create price volatility)
For further information, please contact Colin Hamilton (colin.j.hamilton@nationalgrid.com, 07971 760360)
EU Incremental Amendment update
 Incremental Amendment to CAM Code will deliver:
 A standardised way for market participants to flag appetite for
incremental /new capacity
 A standardised process to ensure a minimal level of cross
border TSO/NRA coordination
 A standardised process to establish economic viability of an
incremental/new capacity project with local input parameters
 An integrated offer of incremental and existing capacity via
CAM NC auction process
 Principles for Open Season Procedures in case auctions
cannot be used
 Possibilities to adjust tariff or depreciation rate in case
economic viability cannot be established in existing framework
EU Incremental Amendment update
 Incremental Amendment being develop together with Tariff Code, thus:
 ENTSOG Stakeholder Joints Working Sessions now complete
 ENTSOG now developing draft Amendment based on ACER Guidance
Document and taking account of stakeholder feedback received during
SJWS process
 Code based on published Business Rules
 http://www.entsog.eu/publications/incremental-capacity#5-BUSINESSRULES
 Draft INC Amendment due for approval within ENTSOG’s internal
governance process by mid-May
 Public Consultation on the draft INC amendment will take place from the
end of May to the end of July
 Next Stakeholder Workshop – 24th June
For further information, please contact Colin Hamilton (colin.j.hamilton@nationalgrid.com, 07971 760360)
3. UNC Modification Plans
Phase 2 UNC Modifications
Potential Timescales
EU Network Code
Panel Submission
Workgroup
Development
UNC
Consultation
March 2014
6 Months
Q3 - 2014
SMP Buy & Sell
April 2014
6 Months
Q3 - 2014
Nomination Process at IP’s
April 2014
6 - 9 Months
Q4 -2014
Capacity Allocation
(CAM)
CAM / CMP Compliant
Capacity Auctions
Q2 - 2014
6 - 9 Months
Q4 - 2014
Interoperability &
Data Exchange (INT)
OBAs / allocations
Q3 - 2014
6 Months
Q1 - 2015
Interconnection
Agreements/Contract
Changes
(facilitating Modification )
Q1 - 2015
6 Months
Q3 - 2015
Data Exchange
Q3 - 2014
6 Months
Q2 - 2015
Gas Balancing (BAL)
Area of change
Information Provision
4. Draft Modifications
CAM & Bacton Modifications
Initial Estimated Timescales
CAM & Bacton UNC Modifications
Modification
raised at UNC
Panel
Jun 14
Ofgem
Decision
Feb
EU
Workgroup
Jan 15
Feb 15
Jul 14
Sep 14
Oct 14
Nov 14
18 DEC
6 NOV
2 Oct
4 Sep
7 Aug
Aug14
Consultation
Dec 14
Implementation
Date
1st Nov*
May 14
UNC Panel
to review
WG report
and issue to
consultation
Modification
WG
Development
Modification
WG
development
3 Jul
Modification
WG
development
5 Jun
EU
Workgroup
1 May
15 May
Draft CAM Mod
shared with
EU WG
Modification
WG
Development
UNC Panel
Vote on
FMR and
submission
to Ofgem
20 NOV
Modification WG
development
Finalise WG
Report and
submit to
Panel
*W.E.F 1st November 2015
Nov 15
CAM & Bacton Modifications
29
CAM UNC Modification Outline
 Key features of proposal:
 Applicable to European Interconnection points - Bacton (IUK and BBL) and
Moffat
 An EU set of standard capacity products for both entry and exit (yearly,
quarterly, monthly, daily and within day) and cessation of Enduring Annual
NTS Exit (Flat) Capacity at IPs
 An EU standard capacity auction calendar
 EU standard capacity auction designs (Ascending Clock and Uniform
Price)
 Priority given to cross-border bundling of unsold capacity products
 Set aside capacity from longer term auctions for shorter term auctions at
IPs
 Capacity originally allocated as cross-border bundled capacity can only be
resold as bundled capacity on the secondary market
CAM UNC Modification Outline
 A joint booking platform for the offer and purchase of capacity at
interconnection points
 Charging arrangements
 Transitional arrangements
 Adapting pre-existing CMP solutions to apply to CAM products and auction
processes where appropriate.
Bacton UNC Modification Outline
 Create new points in Gemini:
 Bacton UKCS ASEP
 Bacton IP ASEP
 Write out to individual Shippers
 Ask them to decide where they want their existing Bacton rights post
split to be
 Principle is to allocate only up to new obligated levels
 If aggregate requirements less than obligated, allocate in full
 Else second invitation – again allocate in full if below obligated level
 Else need to pro-rate back to obligated level (and allocate surplus
to ‘other’ point)
 Reallocation process to run after March 2015 QSEC is allocated
 To be completed by September 2015
32
Mar 2015
QSEC
auction held
Feb 2015
AMSEC
auction held
New processes
2015
Feb
Mar 2015
QSEC
auction
allocated
Mar
Apr
May
Need to stop
Capacity
Transfers at
Bacton once
new process
begins
Jun
10 days after
QSEC
auction is
allocated
Invite Users
Inform
Shippers of
new ASEPs
by May 2014
(if 12
months’
notice given)
Inform
Shippers of
any new
charge types
or changes
to invoices
RMT&TSEC
and Daily
auctions
continue for
each month
Jul
Jul
Aug
Sep
Write out
with final
reallocations,
hold second
process if
necessary
Write out
with
proposed
reallocations,
hold second
process if
necessary
First
Capacity
Reallocation
Need to
suspend
RMT&TSEC
and Daily
auction for
Nov at Bacton
ASEP
Second
Capacity
Reallocation
if necessary
Oct
Nov
CAM implemented
Existing UNC processes
Initial Draft Timeline for Bacton
Reallocation Process
33
CAM & Bacton UNC Modifications - Next Steps
 Request referral to a Workgroup for development
 Solution detail to be developed as part of workgroup
 Legal text will be developed and provided during the development process
 Better facilitates objective (g) compliance with EC Regulation
 Any questions?
34