Stefanie Neveling (BNetzA) Madrid Forum, 14 January 2010

Stefanie Neveling (BNetzA)

Madrid Forum, 14 January 2010

Congestion Management

ERGEG Recommendations for Guidelines Adopted via a Comitology Procedure

2Madrid Forum, 14 January 2010

Contents

• Why are new rules on congestion management

necessary?

• ERGEG proposals and Impact Assessment

• ERGEG Recommendations and Way Forward


Physical congestion

occurs rarely:

Background

<70% of technical capacity70-80% of technical capacity 80-90% of technical capacity

>90% of technical capacity

Actual flows in 2009

365 days

Source: www.gas-roads.eu


General Issues

• Scope of guidelines

• Rules apply to cross-border points between adjacent entry-

exit-systems where subject to booking procedures.

• Capacity management clauses in existing contracts shall be

amended in line with the implemented provisions.

• Network users shall be entitled to reduce their capacity bookings

during transitional period.

• NRAs shall ensure that TSOs have incentives to achieve the aim of

Guidelines.


Capacity Maximisation

• TSOs to offer the maximum amount of firm capacity that can be

offered for use without restrictions.

• Technical capacity to be calculated through transparent methodologies,

using best available and cost-efficient procedures

• Dynamic calculation of available capacity – TSOs shall regularly re-

calculate capacity based upon actual technical conditions (e.g.

temperature)

Impacts: How will additional firm capacity impact interruptible contracts?

• Risk of being interrupted may increase, but additional firm capacity

will be available


Oversubscription and Buy-Back

• TSOs to implement mechanisms to offer additional firm short-term

and longer term capacity

• Based on statistic scenarios an extra amount of capacity exceeding

the capacity previously calculated to be offered

• In case of actual physical congestion transmission system

operators shall tender for buying back capacity.

• TSOs to estimate the possibility and the costs of buying back

capacity on the market and to reflect this in the amount of

additional capacity

• The mechanisms and possible transition periods for the

implementation of these mechanisms are subject to review by NRA


Impacts:

• What is the expected impact on availability of capacity?

• Based on over-subscription TSOs should be able to offer

additional long-term capacity

• mechanism does not touch existing contracts

• How often will buy-back take place?

• Based on current utilisation rates actual buy-back is expected to

happen rarely

• As a consequence costs will be rather low

Oversubscription and Buy-Back


Firm day-ahead UIOLI

• Where demand for firm day-ahead capacity exceeds the offer, NRAs

to decide on firm day-ahead UIOLI procedure

• To this end, NRAs may reduce or remove existing re-nomination

rights reflecting

• requirements at specific points

• the share of the booking of particular network users

• the users’ objectively justified needs

• Day-ahead capacity set free by this mechanism to be allocated by

auction only

• The offer and allocation of day-ahead capacity shall be performed in

such a way that buyers can take part in daily gas trading


Impacts:

How are shippers affected by restriction of re-nomination rights?

• Big portfolios can better cope with unexpected events and

therefore may not need full re-nomination rights

• Small portfolios to be protected (e.g. “2+2”)

How are portfolios containing many gas fired power stations

affected?

• In big portfolios with many power stations fluctuations are

neutralised against each other

• Smaller portfolios can explicitly be protected

• Therefore: No interference with electricity markets expected



Impacts:

How does a restriction of re-nomination rights impact balancing?

• Portfolio balancing: Expected increase of liquidity of gas

markets will help to avoid imbalances

• System balancing: Where a system is short system balancing

energy can be provided on interruptible capacity



Withdrawal of Underutilised Capacity

• The procedure requires:

• shippers request capacity and unable to obtain this capacity on the

primary or secondary market;

• capacity holder systematically underutilizes allocated capacity

• capacity owner has not sold or offered the capacity and is unable to

satisfactorily justify the behaviour

• The capacity holder can

• lose capacity rights for a given period or for the remaining term

• be limited in nomination rights for a given period to the maximum

flows of the previous year.


Recommendations and Way Forward

• ERGEG sees urgent need to improve congestion management in

Europe

• Stakeholder Workshop on 2 February 2010

• Binding rules are needed for the implementation of harmonised access

conditions

• ERGEG invites Commission to consider adoption of binding

guidelines on congestion management via comitology

• ERGEG recommends speedy adoption during the ‘interim period’ –

waiting for the third package entering into force is no option

• Pragmatic approach preferred either under current Regulation or

anticipating the new Regulation

• ERGEG is prepared to contribute to the next steps on this issue


Thank You!

Stefanie Neveling (BNetzA) Madrid Forum, 14 January 2010

Documents

Transcript of Stefanie Neveling (BNetzA) Madrid Forum, 14 January 2010