1 Madrid, 15 th November 2013 20 th SG Meeting South Gas Regional Initiative.

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Madrid, 15th November 2013

20th SG Meeting

South Gas Regional Initiative

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Agenda10:30-10:35 I. Opening

I.1 Welcome

I.2 Agenda and minutes from the last meeting (for approval)

10:35 – 12:10 II. Capacity Allocation Mechanism

II.1 Results of the last auction between Portugal and Spain (for

information by TSOs)

II.2 Status of CAM Roadmap in SGRI Latest agreements on the CAM for

2014 (for information by Regulators)

II.3 Update information on PRISMA: shippers’ requirements and IT

implementation in the SGRI (for information by TSOs)

II.4 Allocation of capacity in Portugal under the new regulation (for

information by Regulator)

II.5 Next steps and calendar: information release, training sessions,

relevant regulation, etc. (for discussion)

12:10-12:40 III. Congestion Management Procedures

III.1 Status of CMP implementation in the SGRI: Portugal, France and

Spain (for information by Regulators)

III.2 Next steps and calendar (for discussion)

12:40-13:00 IV. Iberian Gas Hub: study on models for integration of the Spanish and

Portuguese gas markets (for information by Regulators)

13:00-13:30 V. Infrastructures

V.1 Update on 2013 South Gas Regional Investment Plan (GRIP) (for

information by TSOs)

V.2 Latest news on PCIs (for information by European Commission and

Regulators)

13:30-13:50 VI. LNG market changes and cross-border flows in the SGRI (for information

by TSOs)

13:50-14:00 VI. AOB and next meetings

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II. Capacity Allocation Mechanisms

Area of work Responsible Starting Deadline

OSP France-Spain: annual allocation of short-term capacities

TSOs Nov. (yearly) Dec. (yearly)

CAM harmonisation proposal PT-SP NRAs-TSOs Jan. 2011Jun. 2012

(COMPLETED)

CAM harmonisation proposal in the whole region NRAs-TSOs Jan. 2012 Dec. 2013

Set up a common TSO Allocation Platform: Roadmap and Implementation

TSOs Jul. 2012 Dec. 2014

II.1. Results of the last auction between Portugal and Spain (for information by TSOs)

II.2. Status of CAM Roadmap in SGRI Latest agreements on the CAM for 2014 (for

information by Regulators)

II.3. Update information on PRISMA: shippers’ requirements and IT implementation in the

SGRI (for information by TSOs)

II.4. Allocation of capacity in Portugal under the new regulation (for information by NRAs)

II.5. Next steps and calendar: information release, training sessions, relevant regulation,

etc. (for discussion)

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II.1. Results of the last auction between Portugal and Spain

(for information by TSOs)

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II.2. Status of CAM Roadmap in SGRI. Latest agreements

on the CAM for 2014

(for information by regulators)


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II. CAM• In the 24 IG meeting (23 Sept), it was agreed that Regulators will elaborate a

Paper containing the topics agreed in order to progress on the early implementation of CAM NC in the SGRI.

• CAM NC was approved on 14 October 2013 – Regulation (UE) nº 984/2013, completing the Regulation (CE) nº715/2009. Aplicable as from Nov 2015

• A Paper on CAM implementation was shared with TSOs – sent by email last Friday.

• Principles: Allocation will take place via PRISMAPlanned auctions:

Every year, in March:

oYearly products for the following year at PT-ES border

oYearly products for the following 15 years at FR-ES border

Every year, in June:

oQuarterly products from October to September at both borders

Every day, at least since November 2015 and when available capacity exits:

oDay ahead and intraday products at both borders

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II. CAM

• Bundled capacities: TSOs will offer as much bundled capacity as possible, calculation formula is the one described in CAM NC.

If more available firm capacity on one side firm capacity will be offered as unbundled product with a duration following the existing contract on the other side of the border, if any. Duration limited to one year. Required: TSOs to exchange the necessary information on both sides of the IP.

• Split of the capacity offered:

ES-PT: 10% of the technical capacity will be offered at annual quarterly capacity auctions. The remaining capacity will be offered at annual yearly auctions for the next year.

ES-FR: 80% of the available capacity as yearly products until year n+15

10% as yearly products for year n+1 to n+5

10% as quarterly products.

Issues agreed on Capacity Allocation

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II. CAM

• Interruptible capacity: TSOs will propose the amount and duration of capacity to be sold in both directions at both borders, at least on a day-ahead basis.

• VIP: capacity will be commercialized in a VIP at both borders.

By October 2014: capacity bookings, publications and nominations will refer to the VIP (physical IP Larrau and Biriatou will be merged into a VIP), existing access contracts will be adapted to the VIP.

• Users registration for participating in the auctions: requirements are established in PRISMA General Terms and Conditions. An Energy Identification Code is needed.

• There are two types of financial guarantees: To participate in the auction: TSO can choose the “credit limit check” offered by

PRISMA

To contract capacity access: remains as currently in place in each country.


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II. CAM

• Auction process Yearly, quarterly and monthly products: ascending clock auction, with

multiple bidding rounds

Day-ahead and intraday products: uniform-price auction, with a single bidding round

• Prices

Reserve price = sum of the regulated prices at both sides

Payable price = reserve price + auction premium (50/50 between TSOs at both sides)

Large and small price steps to be defined per IP and product. Steps established at others European IPs can serve as a reference.

• Contracts: Standard contracts at both sides of the border:

Before the auction: rights, obligations and conditions

After the auction: capacity allocated to be signed in a new standard contract or annex


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II. CAM

• Capacity transfer to affiliates: shippers have to sign access contracts (or annexes) when capacity is allocated.

Only the company that has been allocated the capacity can sign the contracts/annexes with TSOs on both sides of the border.

• Monitoring by NRAs

NRAs will have access to auctions information via PRISMA.

Coordination between NRAs at both sides of the border.

• Stakeholders information:

TSOs will notify the amount of capacity to be offered to users and potential users before the auctions: one month / two weeks / one week before annual yearly / annual quarterly / monthly capacity auctions respectively.

TSO will communicate results of the auctions: aggregated to the market, allocated capacity to the participant

TSOs’ websites will publish a link to PRISMA site.

Information included in TSOs’ regular publication.


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II. CAM

• Capacity not allocated in auctions

In annual yearly auctions: it will be offered in the annual quarterly and monthly auctions.

In annual quarterly auctions: it will be offered in the monthly auctions.

Until the full implementation, capacity not allocated in monthly auctions will be sold as day ahead and within day capacity using the mechanisms in force in each country, only in the VIP.

• Secondary market: bundled capacity (CAM NC products) can be offered in the VIP by primary capacity holders. Shipper must be authorised to operate in both countries.

PRISMA secondary market functions will be available in early 2014.

To be decided when secondary trades will be made possible at both borders and type of information to be published.


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II. CAM

• Interim period

Until the first auction in early 2014, available capacity will be booked via the process currently in force.

Until full implementation of CAM NC in Nov 2015, daily and intraday capacity could be allocated outside PRISMA using the mechanism in force in each country in the VIP.

• Interaction with other capacity allocations in the region

Shippers can be interested in booking access along corridors inside the Region

TSOs and NRAs will make their best to coordinate the schedule of the allocations in each country and will inform shippers about other capacity allocations in each country.


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II. CAM

They will be more relevant when day-ahead and intra-day capacity will be auctioned

• GAS DAY. Two options are possible till November 2015

To unify the gas day at the IP as established in CAM NC

To keep current gas day in each country. Need of agreement on conversion of nominations, renominations and measures into the same reference period.

• COMBUSTION REFERENCE TEMPERATURE. Two options:

To adopt the same combustion reference temperature which simplifies matching processes. It can involve investment in equipments and this change in measurement generates consequences for users.

To keep current reference temperatures. Need of conversion factors for nomination and matching.

• DATA EXCHANGE: appropriate, automatic communication

• NOMINATION/RENOMINATION: IT system to manage:

Establishment of a single nomination

Nomination of net flows

Harmonization of the nomination/renomination calendar according to Balancing NC

Interoperability issues

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II. CAM

• Spain: a CNMC Circular to regulate the allocation processes.

• France: a CRE Deliberation will describe the allocation procedures at

the IPs with Spain. Also, the tariff related aspects will be reflected in the yearly decision on transmission tariffs by the end of 2013.

• Portugal: a ERSE Deliberation based on the conclusions of the SGRI

concerning allocation processes.

NRAs regulatory development

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II.3. Update information on PRISMA: shippers’ requirements

and IT implementation in the SGRI


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II.4. Allocation of capacity in Portugal under the new regulation


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II.5. Next steps and calendar: information release, training

sessions, relevant regulation, etc.

Presentations for the SG meetings to be shared with participants in advance.

Regulator’s paper to progress on the early implementation of CAM NC in the SGRI to submit the all shippers – ACER website (20th SG meeting folder).

http://www.acer.europa.eu/Gas/Regional_%20Intiatives/South_GRI/20th%20South%20SG/default.aspx

NRAs encourage shippers to participate in WS on PRISMA training, expected shortly, in cooperation with TSOs in the Region.

Comply with the calendar established in CAM Roadmap in the Region.




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III. Congestion Management Procedures

III.1. Status of CMP implementation in the SGRI: PT, FR, ES

III.2. Next steps and calendar

Area of work Responsible Starting Deadline

CMP harmonisation in the whole region NRAs-TSOs Oct 2012 Oct.2013

CMP harmonisation in the whole region (including UIOLI firm ST)

NRAs-TSOs Oct 2012 Jul. 2016

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III.1. Status of CMP implementation in the SGRI:

Portugal, France and Spain


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Status of the regulations in each country

• CRE’s Deliberation was published end of June.

• Finalizing the approval process by the Board of CNMC.

• ERSE, in cooperation with TSOs and stakeholders, will start working on the implementation of a capacity surrender mechanism.

• Since there’s no long term allocations, Portugal considers that they have no need for LT UIOLI.

• The need for OSBB mechanism is also questionable, since there is available capacity to be booked at borders.

• In any case, CMP will be compatible with their new CAM and coordinated with Spanish mechanism.

FRANCE

SPAIN

PORTUGAL

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CMP implementation in France

• Public consultation from 4 to 23 April on the TSOs proposal of implementation discussed within the South GRI.

• 19 responses received: 10 network users, 3 national associations, 3 TSOs, 2 infrastructure operators, 1 confidential.

• Contributions received from CNE, BNetzA and CREG.

• CRE’s deliberation published on 27th June, 2013

• Publication of the risk analysis for the OS/BB scheme

• Publication of non-confidential responses to the public consultation.

Process for implementation on 1st October 2013

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CMP implementation in Spain

• First draft approved by CNE on 11 July

• Detailed mechanisms defined: capacity surrender, LT UIOLI and OSBB.

• Public consultation from 15 July to 7 August on the CNE proposal of implementation discussed within the South GRI.

• 8 responses received: 1 network users association, 3 public entities, 1 TSO, 1 DSO association, 1 business group and the Technical System Manager.

• A new version sent to the Board of CNMC

• This version includes comments from public consultation and alignment with the already implemented mechanisms in France.

Process for implementation on 1st October 2013

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SIMILAR MECHANISMS ON BOTH SIDES OF THE FRENCH-SPANISH BORDERS

• Possibility to surrender the initial capacity, fully or in part, without any limitation in volume and duration.

• Surrendered products to be allocated under the form of quarterly products (until 4 consecutive products) and monthly products during the regular allocation process on each point.

• The surrendered capacity can not be proposed by the initial holder on the secondary market before the end of the commercialisation window by the TSO.

• Time stamp rule for the reallocation of surrendered products.

Capacity surrender mechanism (i)

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• If the surrendered capacity is not reallocated, capacity is given back to the user after the auction.

• The user does not have the possibility to unbundle a bundled product.

• The TSO shall commercialize the surrendered bundled product in a bundled form.

• Financial obligations of the initial holder of the capacity

No systematic fees will be applied on the surrender mechanism.

If the initial price (P1) is lower than the price when reallocated the capacity (P2): the shipper is relieved from any payment obligation

If the initial price (P1) is higher than the price of the reallocated capacity (P2): price invoiced to the shipper is equal to the difference between P1 and P2.

Capacity surrender mechanism (ii)

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SIMILAR MECHANISMS ON BOTH SIDES OF THE FRENCH-SPANISH BORDERS

• The implementation of the overselling and buy-back mechanism is based on a risk analysis for each IP to be updated regularly.

CRE asked TIGF to cooperate with Enagas with the view to offering, as soon as possible, the additional capacity at Larrau in the direction of Spain to France in a coordinated manner.

CNMC proposal requires the Technical System Manager and TSOs to coordinate with adjacent TSOs when defining the methodology to determine the additional capacity and the buy back mechanism.

• The oversubscribed capacity is offered in addition to the technical capacity through the regular allocation processes.

• TSOs will be able to offer additional capacity in form of several products.

Overselling and buy-back mechanism (i)

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• Buy back procedure:

• TSOs make their best efforts to bundle the additional capacity with the additional capacities offered by the adjacent TSOs and to coordinate for the buy-back procedure.

• When the buy-back procedure is launched, the users do not have the right to revise upwards their renominations anymore on the concerned point until the end of the gas day.

• Cap on the buy-back price

In France: average of the clearing prices of the quarterly, monthly and day-ahead auctions weighted by the booked quantities during these auctions, plus 25%.

In Spain: The price won’t be higher than 25% of a reference price, which will be jointly defined with adjacent TSOs and according to market price.

Overselling and buy-back mechanism (ii)

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• Already implemented in France since 2007 and in Spain since 2002 at all IPs including IPs with third countries

DIFFERENCES BETWEEN THE FRENCH AND SPANISH MECHANISMS

• CNMC proposal is more detailed and specific in aspects related to how calculate underutilized capacity and how to allocate it than CRE’s deliberation, although, in principle, this would not necessarily mean a non-homogeneous application.

• In France, there is an important involvement of NRA in the final withdrawal decision, while CNMC proposes an automatic process performed by TSOs where NRA involvement is only necessary in case of conflict and for monitoring purposes. In any case, this aspect wouldn’t also affect the results of the mechanism application.

• In any case, it will be necessary to monitor the impact of the application of this mechanism, in order to improve coordination.

UIOLI long term

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• Implementation of LT UIOLI has involved minor adjustments included in CRE Deliberation

• The TSOs inform CRE in case of systematic underutilization, and if capacity has not been offered in the secondary market under reasonable conditions, and if no proper justification is provided by the network users.

• In case other users request firm capacity on the entry-exit point, the TSO analyses the congestion situation of the entry-exit point.

• The withdrawal is proposed by the TSO to CRE.

• The final decision is taken by CRE, after consultation/coordination of this withdrawal in case of bundled products with adjacent NRAs.

• TSOs regularly provide to CRE data on individual subscriptions and flows.

UIOLI long term in France

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• Every April, TSOs will review the capacity utilization of those users with annual and quarterly products when their contracted capacity lasts more than one year. In two periods: from 1 April to 30 Sept (previous year) and from 1 Oct in the previous year to 30 March in the current year.

• There will be systematic underutilization if one of the following happens: In the both periods the utilization level is under 80%

In both periods there are, at least, 60 days when the user firstly nominates above 80% of the contracted capacity, and later renominates half or less than its initial nomination

• TSOs will check if unused capacity has been offered in the secondary market under reasonable conditions- the user has offered the capacity at a price equal to or lower than the maximum between: price paid by the user and the reserve price at the moment the user offers the capacity in the secondary market.

• If there is capacity underutilization and capacity has not been offered in the secondary market under reasonable conditions, the TSO will withdraw user’s capacity.

• Capacity will be withdrawn during the following gas year and offered firstly in the quarterly auction and afterwards in the monthly auctions.

UIOLI long term in Spain (i)

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• Withdrawn capacity will be reallocated in the allocation process after all the available technical capacity and the surrendered capacity have been allocated.

• When in the allocation process demanded capacity is lower than withdrawn capacity, a pro-rata mechanism will be applied.

• When the capacity reallocation involves a price lower than the original, the primary capacity holder will cover the difference.

• Primary holders retain rights and obligations till the withdrawn capacity is allocated.

• In order for TSOs to offer withdrawn capacity in the ordinary allocation processes, withdrawn capacity won’t be offered in the secondary market in the periods: 15 days before the auction for quarterly products and 10 days before the monthly products auction.

UIOLI long term in Spain (ii)

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III.2. Next steps and calendar


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IV. Developing hub-to-hub trading in the South region

IV.1. Iberian Gas Hub: study on models for integration of the Spanish and

Portuguese gas markets

Area of work Responsible

Starting

Deadline

Hub development NRAs-TSOs-stakeholders

Jan.2013 Dec. 2013

Hub-to-hub gas trading in the region NRAs-TSOs-stakeholders

Jan.2014 Dec.2014

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MIBGAS: Models for the integration of the Spanish and Portuguese

gas markets in a common Iberian Natural Gas HUB


Starting

Deadline

Analysis of the possible models for the integration of the Spanish and Portuguese gas markets in a common Iberian Natural Gas HUB

NRAs 2013 Q2 - 2014

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General Objective

. In order to assess the feasibility of the development of a gas hub, the study analyzes different aspects of the current gas market situation in Spain and Portugal, including prices in the gas market, as the most important factors.

. The study covers three different models of market integration and its possible application to the Iberian gas market, comparing the advantages and disadvantages of each model.

Market Area Model.

Trading Region Model.

Market with Implicit Capacity Allocation.


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IBERIAN GAS HUB: Work in progress

1. Draft document analyzing the advantages and drawbacks of the possible models, the regulatory harmonization requisites for its implementation by CNMC – ERSE (2013 - Q4)

Document is pending on approval by NRAs

2. Public hearing (2014 – Q1)

3. Analysis of stakeholders responses to the public hearing (2014 - Q2)

4. Final document to be approved by CNMC- ERSE (2014 - Q2)


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V. Infrastructures


Starting

Deadline

Regular update and publication in CEER website of project status of OS 2013 and 2015

TSOs-NRAs Dec. (yearly) Jun. (yearly)

Drafting of the South Regional Investment Plan 2012 TSOs Jul. 2011Jan. 2012

(COMPLETED)

Feedback to ENTSO-G on contents and methodology of the regional investment plan

NRAs Jan. 2012Jul. 2012

(COMPLETED)

Input to ENTSO-G for the Community-wide TYNDP 2013

TSOs Jan. 2012 Apr. 2013

Creation of a working group in the region in order to test the process of PCI identification

NRAs -TSOs Mar. 2012 March 2013

Drafting of the South Regional Investment Plan 2014

TSOs Jan. 2013 Apr. 2014

IV.1. Update on 2013 South Gas Regional Investment Plan (GRIP)

IV.2. Latest news on PCIs

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V.1. Update on 2013 South Gas Regional Investment Plan

(GRIP)


V. Infrastructures

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V.2. Latest news on PCIs

(for information by European Commission and regulators)

V. Infrastructures

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V. Infrastructures

• First list of PCIs was approved by EC on 14 October 2013.

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V. Infrastructures

5.4 PCI 3rd interconnection point between Portugal and Spain.

5.5PCI Eastern Axis Spain-France - interconnection point between Iberian Peninsula and France at Le Perthus– currently known as Midcat

5.6PCI Reinforcement of the French network from South to North – Reverse flow from France to Germany at Obergailbach/Medelsheim Interconnection point (France)

5.7PCI Reinforcement of the French network from South to North on the Bourgogne pipeline between Etrez and Voisines (France)

5.8PCI Reinforcement of the French network from South to North on the east Lyonnais pipeline between Saint-Avit and Etrez (France)

PCIs affecting the SGRI - allowing bidirectional flows among Portugal, Spain, France and Germany

5.13 PCI New interconnection between Pitgam (France) and Maldegem (Belgium)5.14 PCI Reinforcement of the French network from South to North on the Arc de

Dierrey pipeline between Cuvilly, Dierrey and Voisines (France)

Other PCIs in France

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V. Infrastructures

• Article 12 of Regulation 347/2013 of 17 April 2013 on guidelines for trans-European energy infrastructure allows project promoters to submit to the concerned NRAs a cross border cost allocation – CBCA - request as soon as the project has reached sufficient maturity and requires the NRAs to take coordinated decisions on the allocation of investment costs.

• For projects included in the first PCI list: the deadline was 31 October 2013.

• Published in September 2013: ACER Recommendation regarding the CBCA requests submitted in the framework of the first union list of electricity and gas PCIs

Information to be submitted with a CBCA request and High-level principles for NRAs’ handling of CBCA requests.

• Approved on 5 Nov: ACER Internal Document on further guidance on CBCA for electricity and gas PCIs

Steps, timeline and ways of coordination between NRAs as to how to implement the provisions

Documents to be developed within the CBCA request assessment and approval process, approach and timing for payments

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V. Infrastructures

• ENTSOG is developing the methodology of cost-benefit analysis – CBA - to evaluate the projects (according to article 7 of Regulation 715/2009 on conditions for access to the natural gas transmission networks).

CBA submitted to PC until September 2013, currently under revision

• Candidate projects to PCIs will be evaluated using ENTSOG CBA.

• List of PCIs will be updated every two years and candidates must be included in the TYNDP.

• ENTSOG is in charge of adopting the TYNDP every two years (according to article 7 of Regulation 715/2009 on conditions for access to the natural gas transmission networks).

TYNDP 2013-2022, in elaboration. A Draft was submitted to ACER in July 2013. ACER Opinion was adopted in September 2013.

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VI. LNG market changes and cross-border flows in the SGRI

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Next meetings:• 25 IG, by videoconference, in December?• 21 SG meeting in February?

VII. AOB and next meetingsJULY AUGUST SEPTEMBER

L M X J V S D L M X J V S D L M X J V S D1 2 3 4 5 6 7 1 2 3 4 18 9 10 11 12 13 14 5 6 7 8 9 10 11 2 3 4 5 6 7 8 5 September 13th RCC

15 16 17 18 19 20 21 12 13 14 15 16 17 18 9 10 11 12 13 14 1522 23 24 25 26 27 28 19 20 21 22 23 24 25 16 17 18 19 20 21 2229 30 31 26 27 28 29 30 31 23 24 25 26 27 28 29 23 September 24th IG

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OCTOBER NOVEMBER DECEMBERL M X J V S D L M X J V S D L M X J V S D

1 2 3 4 5 6 1 2 3 17 8 9 10 11 12 13 4 5 6 7 8 9 10 2 3 4 5 6 7 8

14 15 16 17 18 19 20 11 12 13 14 15 16 17 9 10 11 12 13 14 15 15 November 20th SG

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JANUARY FEBRUARY MARCHL M X J V S D L M X J V S D L M X J V S D

1 2 3 4 5 1 2 1 26 7 8 9 10 11 12 3 4 5 6 7 8 9 3 4 5 6 7 8 9

13 14 15 16 17 18 19 10 11 12 13 14 15 16 10 11 12 13 14 15 1620 21 22 23 24 25 26 17 18 19 20 21 22 23 17 18 19 20 21 22 2327 28 29 30 31 24 25 26 27 28 24 25 26 27 28 29 30

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APRIL MAY JUNEL M X J V S D L M X J V S D L M X J V S D

1 2 3 4 5 6 1 2 3 4 17 8 9 10 11 12 13 5 6 7 8 9 10 11 2 3 4 5 6 7 8

14 15 16 17 18 19 20 12 13 14 15 16 17 18 9 10 11 12 13 14 1521 22 23 24 25 26 27 19 20 21 22 23 24 25 16 17 18 19 20 21 2228 29 30 26 27 28 29 30 31 23 24 25 26 27 28 29

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Spanish Bank Holiday Portuguese Bank Holiday French Bank Holiday

2014

2013

1 Madrid, 15 th November 2013 20 th SG Meeting South Gas Regional Initiative.

Documents

Transcript of 1 Madrid, 15 th November 2013 20 th SG Meeting South Gas Regional Initiative.