New tariffs system in France

GTE23rd October 2003

Jacques Laurelut

22nd October 2003GTE 2

The French network

Gaz de France

CFM

GSO

22nd October 2003GTE 3

A multi-zonal Entry-Exit system

System in place in 2003 and 2004

Eight Entry-Exit zones:

• one for GSO• two for CFM• five for GDF (one for L-Gas, one for H-gas)

Average area covered by each zone: 70 000 km2 (Belgium: 30 000 km2 ; Netherlands: 35 000 km2 ; Ireland: 70 000 km2)

22nd October 2003GTE 4

How does it work ?

Interconnection pointUnderground storageRegasification plant

GSO

CFM

GDF

Montoir

Dunkerque TaisnièresObergailbach

Oltingue

Fos

22nd October 2003GTE 5

Advantages of this system (1/2)

No inter-TSO payment although there are 3 TSO’s

Favouring competition:

no capacity constraint within each zone

each GDF’s zone has a storage capacity

daily balancing in each zone

Transparency: physical capacity constraints are reflected by the inter-zone links

appropriate information is given to the network users by the TSOs regarding available capacities for the supply of their customers

appropriate information is given by the network users to the TSOs (capacity booking reflects the actual need for capacity)

minimisation of the risk of supply shortages for customers

22nd October 2003GTE 6

Advantages of this system (2/2)

Cost reflectivity: minimisation of cross-subsidiation

the cost of the inter-zone links is borne by the users of the corresponding capacity only

the price for the inter-zone links is very low for backhaul capacity

consistency with existing transit contracts

Consistency with physical balancing requirements:

the commercial balancing obligation on each zone for the shippers is consistent with the physical balancing requirements of the TSO

22nd October 2003GTE 7

New Transmission tariff (from January 1st 2004)

Regulator proposal dated July 24th, subject to French government approval

Same tariff structure Zonal Entry / Exit Five balancing zones for Gaz de France : NORD H, EST, OUEST,

SUD, NORD B

But a lot of changes have been introduced Inter-zone links prices have been reduced by 20% short-duration contracts (1 month) long-duration contracts (more than a year) have been introduced title transfer facility is proposed within each balancing zone (from

November 2003)

22nd October 2003GTE 8

Price Comparison (1000 MWh/d - 300 GWh/yr - NTAR=2)

0

0,5

1

1,5

2

2,5

3

Nord H

Gournay

H

Seine

Ouest

Seine

Est

Langre

s

Bourgogne

Lyonnai

s

Sud Est

EU

R/M

Wh

Tariff 2004 Tariff 2003 Tariff 2000

22nd October 2003GTE 9

Transparency : publication on the web site

Detailed TPA conditions

Entry, exit and link points Capacities Total firm capacity

Subscribed firm capacity

Subscribed interruptible capacity

Available firm capacity Flows Daily flow

Maintenance schedule Maintenance programme and impact on available capacities

22nd October 2003GTE 10

Third Party Access

2001 2002 2003

(estimated)

Gas delivered (TWh)

6,1 19,2 31

(on 180 TWh eligible)

Number of Sites concerned

6 11 23

Number of shippers (including Gaz de France)

4 7 8

22nd October 2003GTE 11

Multi-zonal Entry-Exit tariff system A model for Europe ?

Process of opening the French gas market On the way of success …