Implementation of EASEE-gas’ rules Or …Working towards a functioning European gas network

Maribor,October 9, 2007

Implementation of EASEE-gas’ rules

Or …Working towards a functioning European gas network

European Association for the Streamlining of

Energy Exchange Maribor October 9, 2007


Created in March 2002 with the support of the European Gas Regulatory Forum (‘Madrid Forum’)

Mission: “To develop and promote common practices to simplify and streamline business processes between the stakeholders that will lead to an efficient and effective European Gas Market”

Registered office in Paris, France

European Association for the Streamlining of Energy Exchange- gas

Member States

Industry

European Commission

Regulators


Basic principles

• Open, independent and fully transparent• Structured and balanced voting

• Represents the entire gas chain, open to all stakeholders

• Provides a working platform for the gas industry

• Voluntary guidelines unless adopted by a governmental agency

Organisation


Ownership of gas Physical flow of gas

Transporters

DistributionNetwork

Operators

DistributionNetwork

Operators

SuppliersSuppliers

Retail Suppliers

Retail Suppliers

Traders &Shippers

Traders &Shippers

AssociateMembers

AssociateMembers

ProducersProducersProducersProducers

End UsersEnd UsersEnd UsersEnd Users

Transporters

DistributionNetwork

Operators

DistributionNetwork

Operators

SuppliersSuppliers

Retail Suppliers

Retail Suppliers

LNG Terminal and Storage Operator and

Service Provider(LTSOSP)







Traders &Shippers

Traders &Shippers

AssociateMembers

AssociateMembers

EASEE-gas Segments

5

Gas market rules & network access at EU level

Commission’s Scope: 10 generic areas Impacting:

Security and reliability rules All Grid connection and access rules, Most Data exchange rules, All Interoperability rules, All Operational procedures in cases of emergencies, Many Capacity allocation / congestion management rules, Some Rules for trading, Some Transparency rules, All Balancing rules including

- rules on nominations procedures, Many - rules for imbalance charges Some - rules for operational balancing between TSO’s systems TSOs

Rules for harmonised transport tariff structures Most

6


Market rules designImpact on segments

Network access

Data exchange rules

Interoperability rules

Congestion management

Capacity trading

Commodity trading

Transparency

Balancing rules

Cap. incr. planning, tariff meth.

Master trading agreements

Other bi-lateral agreements

Producers Traders TSOs Service DSOs Suppliers End Users Shippers Providers

7


Network operation & physical designImpact on segments

Security-reliability

Maintenance

System losses

Quality commingling (op.)

Residual balancing

Inter TSO compensation

Inter TSO grid operation

Ten-year statement

Tariff method. (existg infrastr)

Op. emergency procedures

Producers Traders TSOs Service DSOs Suppliers End Users Shippers Providers

8

Gas market design & market operation at EU level

Market Rules Network Operating Rules

Market Design

Time

Market Operation

All Market Participants

TSOs only

9

Implementation and optimal management of EU grid

supporting

Market Operation

Developing rules & standardsimpacting all stakeholders

Market Design

Development and implementation of codes, standards, and procedures across the EU 27

• Open, transparent • Binding agreements• Involvement of all stakeholders

EASEE-gas

Producers TSO´s

Suppliers DSO´s

Shippers & Traders

...

End Users

Retail suppliers

Service Providers

GTE+

ERGEG +

Commission

TSO TSO TSO TSO

TSO TSO TSO TSO

TSO TSO TSO TSO

TSO TSO TSO TSOOptimal

Management

Enforcement

Guidance/Regulations

Develop CBP’s

Advice

Consultation Role

CBP Implementation Survey 2007

Approved CBPs included in survey

• 2003 Harmonisation of Units – Implementation deadline 2005

• 2003 Nomination & Matching– Implementation deadline 2005

• 2004 Edig@s– No implementation deadline

• 2005 Gas Quality Harmonisation– Implementation deadlines 2006 and 2010

• 2005 Interconnection Agreement– Implementation deadline 2007

• 2005 Constraints Handling– Implementation deadline 2006

2007 CBPs

• Common Data Communications Network • Message transmission protocol• Company’s Identifier encoding• Connection point identifier encoding

• Harmonisation of the allocation information exchange • Edig@s revision and version rules

• Secondary trading of capacity

Approved Sep 2007

Out for consultation – expected to be approved Nov 2007

Under development

Responses cover 18 markets/ systems

• Survey carried out in Aug/Sep 2007

• Additional responses from Finland, Sweden and Switzerland

• Fewer responses from some other countries

Responses 2004 2005 2007Austria 2 1 1Belgium 4 9 7Denmark 1 1 2Finland 1France 4 6 6Germany 7 8 8Ireland 1 1 1Italy 2 3 1Luxembourg 1 1 1Netherlands 7 8 6Norway 3 4 1Poland 1 0 0Portugal 1 0 1Spain 1 1 1Sweden 1Switzerland 1GB 4 6 6Northern Ireland 1 1IUK 1 2 1

40 52 47

CBP1 Harmonisation of Units Pressure: bar

• All respondents indicated that all markets/systems in the survey are using bar to measure pressure

CBP element implemented

CBP2 Nomination & Matching Process Use of Coordinated Universal Time

• Most markets appear to use Coordinated Universal Time

• UK & IRL require Network Code changes

• SWI indicates systems and financial issues

• AUT indicates legislative and regulatory changes required

• ESP and ITA have not stated barriers

CBP element implementedCBP element not implementedCBP element not implemented due to regulatory/legislative issues

CBP2 Nomination & Matching Process Lesser Rule applies to matchingMessages to contain matching shipper

• Most markets appear to use Lesser Rule for matching

• FIN only has single source, so no need for matching

• The GBR regime does not include matching and agents act for the shippers at interfaces. There are no requests from shippers to change existing arrangements

• IRL, NIR, IUK and POR use matching but not with Lesser Rule in all cases

• All would require Network Code and/or Interconnection Agreement changes

CBP element implementedCBP element not implemented

CBP2 Nomination & Matching Process Deadlines for initial nominations

• Some markets are not complying with nomination deadlines

• FIN only has single source, so deadlines agreed bilaterally

• DEN and SWE working to implement CBP in near future

• Most others have quoted Interconnection Agreements and Network Code changes as barriers to implementation

• No specific barriers mentioned in ITA

CBP element implementedCBP element in process of being implementedCBP element not implemented

CBP 3 Use of Edig@s

• Generally well adopted through central area of Europe

• FIN only has single source so communications agreed

• Some systems in GER use it and others do not

• All others indicate IT issues, internal resource and/or financial issues as barriers

• GBR & SWE also indicate Network Code changes are required

• No specific barriers mentioned in ITA or ESPCBP element implemented

CBP element implemented in some systems

CBP element not implementedCBP element not implemented due to regulatory/legislative issues

CBP4 Gas qualityHarmonisation of S, CO2, WDP, HCDP

• In most systems the CBP has been implemented, partly implemented or is in the process of being implemented

• FIN single source • SWE old limits are close & need

agreement with DEN• BEL, DEN, NOR in process of

implementing all limits• GER some systems adopted ahead

of new DVGW spec.• NED implemented at some points but

legacy problems slowing down others• GBR & POR require legislative

changes to technical specs• IRL & NIR linked to GB spec.• AUT requires changes to OVGW

CBP element implemented

CBP element implemented in some systems

CBP element close to being implemented

CBP element not implemented

CBP element not implemented due to regulatory/legislative issues

CBP4 Gas qualityHarmonisation of Wobbe, RI, Oxygen

• Most systems are either making progress towards the 01/10/2010 deadline or are waiting for the results of the CEN study before implementing changes

• GB also has a Government review to conclude

• IRL & NIR are linked directly to the GB spec.

• Changes required to interconnection agreements in POR

• SWE gave no indication of progress CBP element implemented

CBP element in process of being implemented

CBP element not implementedCBP element not implemented due to regulatory/legislative issues

Survey conclusions

• Quite good progress is being made particularly in markets with largest interconnection

• Non-implementation does not always mean an issue of interoperability (e.g. Finland, Sweden, Ireland)

• Some legislative and regulatory barriers to implementation in some countries (Units & Quality)

• National regulation needs to provide the proper framework/support to allow implementation

• Can take time to modify national network codes and needs support from all market participants

• Countries further east have issue of compliance … with single supplier

22

Implementation of EASEE-Gas CBP in the SSE region relies on a number of factors to be effective

• More feedback and active membership needed, along the whole natural gas value chain in SSE

• Better feedback from EASEE-Gas members: – Czech Republic– Slovenia– Poland

• Feedback from non-EASEE-Gas members:– Producers, shippers, TSOs, DSOs, suppliers/service providers– Especially in the South East Region– BOTH in ERGEG/EU member states– AND in neighbouring countries, e.g. countries of the Energy

Community

23

Participation in EASEE-Gas CBPOn a voluntary basis

• Green:Respondent already

• Yellow:GRI REM SSE, non respondent

• Light blue:EnC members

• Dark blue:EnC observer countries

• Involvement sought from GRI REM SSE and EnC countries

• EASEE-Gas now to approach market participants in these countries

24

Benefits of participating in EASEE-Gas andFuture role of EASEE-GAS

• EASEE-Gas: A broad platform for structured CBP development and implementation monitoring (?)

• EASEE-Gas ideally suited to play the role of a multi-stakeholder platform involving all stakeholder within the natural gas value chain

• EASEE-GAS hence as the ideal vehicle for consultation: Strengths of the EASEE-gas consultation process

EASEE-GAS

ERGEG+

GTE+

3rd PackageInteraction needed

Success of the development of codes and standardswill crucially rely on the involvement of all stakeholdersnot just transmission system operators


EASEE-gas

www.EASEE-gas.org


A structured consultation process

Common Business PracticeRequest from stakeholder

Prioritised in line with Annual Plan

approved by the Board

Work Group announced to members by Executive Committee (ExCom)

Working Group developsCommon Business PracticeBalanced Voting

Each Segment has 2 votes irrespective of number of

participants in attendance or by phone.

Majority is over 50%Executive Committee

approves CBP for release to all members

Majority VotingEach ExCom Member votes

Majority is over 50%

Members comments receivedand Working Group modifies

CBP accordingly

Executive Committee approve CBP Balanced Voting

3 or more Full Members may appeal within 60 days

Full membership ratification

Each ExCom Member votesMajority is over 50% AND max of 1 vote against in each segment

General MeetingMajority is over 50%

CBP is approved


Extensive industry consultation has taken place

Participating companies 37

Participating industry

organisations

6

Represented countries 14

21 meetings over a 3 year period

Only limited participation of large industrial end users

Technical advice received from Marcogaz

Gas Quality HarmonisationThe Approach


The Gas Quality Harmonisation Common Business Practice

Implementation of EASEE-gas’ rules Or …Working towards a functioning European gas network

Documents

Transcript of Implementation of EASEE-gas’ rules Or …Working towards a functioning European gas network