Code Modification Forum The Hilton Hotel, Kilmainham, Dublin - - PowerPoint PPT Presentation

Code Modification Forum

The Hilton Hotel, Kilmainham, Dublin Wednesday, 21st January 2015

Agenda

1. Review of minutes from last meeting dated 10th December 2014 2. Review of Action Items from last meeting dated 10th December 2014. 3. Code Modification Proposals  A062 - ‘Capacity Allocation Mechanisms’  A063 – ‘Nominations, Imbalance Charges & Allocations: EU Network Code Implementation’  A064 - ‘Virtual Reverse Flow: Enhanced flexibility and compliance with EU Network Codes’  A065 – ‘Financial Security Policy amendments arising from introduction of Capacity Allocation Mechanisms (Regulation 984/2013) ’  A066 - ‘EU Network Code Implementation: Transitional Arrangements’ 4. European Network Code Implementation  EU Network Code Implementation Project: Status Update  Balancing Proposal Update

Agenda

5. European Network Code Development  Incremental Capacity  Capacity Auctions Timing 6. Other EU Updates  Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) 7. National Grid Presentation on UK Shipper Registration Process 8. AOB 9. Agree date of next Code Modification Forum Meeting  Proposed Date Wednesday 4th March 2015 – Cork.

1. Review of minutes from last meeting dated 10th December 2014

2. Review of Action Items from last meeting dated 10th December 2014

Actions – Forum 10th December 2014

ID Action Responsibility Status

C374 The Transporter is to consider amending the proposal such that VRF Capacity booked in the day-ahead auction which has not been nominated on, be made available for over- nomination for the other Shippers during the relevant period. . Transporter Completed. The Transporter has included this change in Version 2.0 of the Business Rules circulated to Industry on the 16th January 2015. C386 Industry is invited to submit written responses to business rules v2.0 and the associated discussion at the Code Modification Forum meeting of 10 December

• 2014. Comments to

marketarrangements@gaslink.ie by 19 December 2014. Transporter Completed

Completed Actions

Actions – Forum 10th December 2014

ID Action Responsibility Status

C389 Industry is invited to comment on the CER’s Risk Assessments, Preventive Action Plans and Emergency Plan, which have been circulated to Gas Code Mod Forum

• Attendees. Comments should be forwarded

to degan@cer.ie by 16/1/15. Industry Completed C390 Industry is invited to comment on the CER’s presentation of the principal biogas rules it is considering for inclusion in its upcoming biogas paper. Comments to be submitted to sbyrne@cer.ie by 9/1/15. Industry Completed

Completed Actions

Actions – Forum 10th December 2014

ID Action Responsibility Status

C259 The Transporter is to issue letters to all End Users requesting that they sign End User Agreements. Transporter. Ongoing. Scheduled to occur after Gas Networks Ireland (GNI) becomes the TSO. C356 The CER is to endeavour to ensure that metering errors will be addressed under the implementation of the Interoperability and Data Exchange Network Code. CER Ongoing C383 The Transporter is to consider issuing an NDM Accuracy of Forecasting Report before October 2015. . Transporter The Transporter will deliver an ‘Accuracy of Forecasting’ Report by 1 October 2015.

Ongoing Actions

Actions – Forum 10th December 2014

ID Action Responsibility Status

C380 The Transporter is to proceed with the development

• f

legal drafting for Code Modification A062 ‘Capacity Allocation Mechanisms at Interconnection Points’. Transporter In Process C381 The Transporter is to review the process of moving from Annual to Monthly cash-out disbursements as proposed in the business rules for Code Modification A063 – ‘Nominations, Imbalance Charges and Allocations’ Transporter Under consideration – referenced in the Annex of the Business Rules as an issue C387 The Transporter is to report to the next Code Modification Forum regarding the status of (Balancing) trading platform options. Transporter Open C388 The CER is to present a summary of REMIT’s requirements to Industry at the next Code Modification Forum in January 2015. CER Open

Open Actions

3. Code Modification Proposals

A062 – ‘Capacity Allocation Mechanism’

Code Modification A062:

CAM at Interconnection Points Background

• Version 1.0 of the Business Rules was published on 27th June 2014.
• Version 2.0 of the Business Rules was published on 24th September 2014.
• Version 3.0 of the Business Rules was published on 16th October 2014.
• Direction to proceed with legal drafting issued by the CER on 16th October

2014.

• Legal Drafting currently in development.
• Code Modification Proposal A065 relating to Financial Security Requirements

as a result of the CAM Network Code was submitted on the 8th January 2015.

• Code Modification Proposal A066 relating to Transitional Arrangements as a

result of the CAM Network Code was submitted on the 9th January 2015.

A063 – ‘Nominations, Imbalance Charges & Allocations: EU Network Code Implementation’ & Operational balancing

Introduction:

Following a review of imbalance charge proposals and operational balancing options, it is proposed that ‘interim measures’ be progressed as a means to:

• Imbalance charge proposals as included in the business rules are to be reviewed and

will be deferred until the end of the interim period (1 – 5 years)

• In the meantime, an ‘interim imbalance charge’ will apply to reflect the balancing

arrangements in place during the interim period

• Imbalance charge methodology to be based on existing regime (with

amendments)

• Retention of tolerances on an interim basis may be possible - to be phased out

by end of interim period

• IBP ‘balancing’ and ‘trading’ platforms to be considered as part of interim and enduring

solutions respectively

• Information Provision:

pending CER approval

• Nominations:

pending CER approval

• Allocations:

pending CER approval

• Imbalance Charges:

currently under review

• At last Code Mod Forum, Transporter and CER indicated that a review of

the imbalance charge proposals would be carried out in light of Industry responses and Code Modification Forum discussions

Code Modification A063:

Current Status

• CMF 24 Sep 2014
• advised that Transporter’s initial view was to progress with investigations

regarding the viability of trading in an adjacent balancing zone (NBP)

• CMF 22 Oct 2014
• summarised Industry responses to consultation - a number of Shippers

urging consideration of IBP platform in addition to NBP option

• CMF 10 Dec 2014
• advised that CER had:
• Requested Gaslink to continue to investigate NBP option; and
• Also consider options for a trading platform at IBP

Operational Balancing:

Current Status

Review of Options:

Options Considered

Option 1: Full implementation Trading platform in place by Oct 2015

• Not possible given the timelines

involved Option 2: Adjacent Balancing Zone Defer implementation to 2016

• TSO must have access to adjacent trading platform (NBP) by Oct 2016
• Retain balancing services contract pre Oct 2016
• No option for interim measures thereafter

Option 3: Interim Measures: Defer implementation for up to 5 years

• Can utilise this option if insufficient liquidity in market (require RA approval)
• May rely on balancing services contract while taking measures to foster liquidity
• Interim measures can also include other aspects of the Regulation (as approved by RA) such as retention

tolerances

• Use of interim measures must be justified by means of an ‘interim measures report’, requiring;
• Consultation with Industry; and
• Approval by Regulator
• CER would inform ACER and EC of any decision in relation to the report by mid-April

Review of Options:

Option 2: Adjacent Zone

Option 2: Adjacent Balancing Zone Defer implementation to 2016

• TSO must have access to adjacent trading platform (NBP) by Oct 2016
• Retain balancing services contract pre Oct 2016
• No option for interim measures thereafter

Why was Option 2 preferred initially?

• Belief that IBP was not sufficiently liquid currently and unlikely to be so in short –

medium term

• NBP is a highly liquid market and utilising such a market would be cost-effective
• Developing a new IBP trading platform in an illiquid market may not be cost-

effective

• Provided for an implementation extension to 1 Oct 2016

• If it is determined that the short term wholesale gas market is insufficiently liquid, interim

measures may be applied:

Review of Options:

Option 3 - Interim Measures

Interim Measures Approval Process:

• Prepare and submit ‘Interim Measures Report’ for industry consultation and

CER approval descriptions of:

• Current state of market development & liquidity
• Interim measures to be applied
• Balancing platform?
• Balancing services?
• Retention of tolerances?
• Interim imbalance charges?
• Why interim measures are necessary
• How interim measures will increase liquidity
• Report shall foresee the termination of interim measures within 5 years
• CER shall make a decision and inform ACER & EC

Following Approval of Interim Measures:

• Transporter balancing actions should foster market liquidity
• Annual Report to be submitted thereafter, charting progress

to date

What are the benefits of utilising interim measures?

• Allows for gradual transition (1 -5 years) at time of significant change in

market

• Allows market to adapt to introduction of Bellanaboy as a new Entry Point
• Potentially allows for retention of some tolerances (to be phased out by end
• f interim period)
• Allows further time to establish most appropriate platform option
• Allows time to attempt to foster liquidity at IBP
• Allows the focus of TSO and Industry efforts towards 2015 to remain on

Gas Day, CAM, Nominations, Moffat Agent changes etc..

Interim Measures:

Benefits

Way Forward:

Why change course now?

• Allows for gradual transition (1 – 5 years) at time of significant

change in market

• Allows market to adapt to introduction of Bellanaboy as a new

Entry Point

• Potential retention of some tolerances
• Allows further time to establish most appropriate platform
• ption
• Allows time to foster liquidity at IBP
• Allows the focus of TSO and Industry efforts towards 2015 to

remain on Gas Day, CAM, Nominations, Moffat Agent changes etc..

Benefits of Option 3: Interim Measures

• Initial investigations into adjacent

balancing zone options identified a number of significant regulatory hurdles

• Risk of missing 2016 deadline

leading to non-compliance issues

• Committing to Option 2 comes with

a proviso that interim measures may not be considered thereafter

Downsides of Option 2: Adjacent Zone

• Shipper and CER feedback regarding development of IBP
• ptions

Industry & CER Feedback

• Split existing A063 Business Rules
• Info Provision, Noms, Allocations to go forward for CER approval
• Imbalance Charge section to be addressed separately
• Partially or entirely as part of ‘interim measures report’
• Balancing platform feasibility to be progressed in tandem with preparation
• f interim measures report
• Transporter to prepare report - Jan / Feb 2015
• Consultation on report - March 2015
• CER to send report to ACER EC - Early April 2015

Next Steps:

A064 – ‘Virtual Reverse Flow: Enhanced flexibility and compliance with EU Network Codes’

Status

• Version 2.0 of the VRF Business Rules was published for consultation on the 16th January ‘15;
• Comments should be returned on or before the 30th January ’15 to:

robert.flanagan@gasnetworks.ie & marketarrangements@gaslink.ie

Major Changes in the VRF Business Rules since last presented Clarity

 Terminology has been amended and improved upon to provide more clarity in

Version 2.0 Business Rules;

Major Changes in the VRF Business Rules since last presented Interruption hierarchy Amendment

 Valid VRF Nomination/Re-Nominations will supersede previous VRF Nomination/Re-Nominations without affecting a Shipper’s position in the interruption hierarchy - clause 1.3.12;  The purpose of this change is so as not to discourage Shippers from Re- Nominating resulting in a loss of position in the interruption hierarchy;

Major Changes in the VRF Business Rules since last presented

Facilitation of Over Nominations

 VRF Capacity booked on PRISMA that has not been Nominated on will be made available for Over-nomination by other Shippers.

This un-nominated VRF Capacity will be referred to as Unutilised Booked VRF Capacity; If the original Shipper then decides to Nominate on their Unutilised Booked VRF Capacity, subsequent Nominators of the unutilised will be Reduced by the Transporter; A Reduction of Unutilised Booked VRF Capacity is not proposed to be defined as an Interruption; Deemed levels of VRF will be recognised up to the effective time of the Reduction

Major Changes in the VRF Business Rules since last presented

Bookable VRF Capacity Formula

 Clarity added to Bookable VRF Capacity formula;

 “Bookable VRF Capacity = ROI Forward Flow – Minimum Forward Flow” - clause 3.2.4;  The definition for Minimum Flow is now “…a minimum quantity required to ensure physical flow in respect of operational requirements”

Physical Flows at the Moffat IP

• Work is ongoing by Asset Management on the impact of Corrib on the physical

flows at Moffat.

• An independent check is currently being carried out and the findings will be

presented at the next Code Mod Forum of the 3rd March.

A065 – Financial Security Policy amendments arising from introduction of Capacity Allocation Mechanisms (Regulation 984/2013)

Code Modification Proposal Presentation

Financial Security Policy amendments arising from introduction of Capacity Allocation Mechanisms (Regulation 984/2013)

Code Modification Number: A065 Proposer: Gaslink Submission Date: 8th January 2015

Introduction

Code Modification Proposal Title and Number Code Modification A065 Financial Security Policy amendments arising from introduction

• f Capacity Allocation Mechanisms (Regulation 984/2013)

Proposed sections of the Code to be Modified Part C: Capacity; Part I: Legal and General; Financial Security Policy FS01 v3.0; Short Term Product Financial Security Policy v1.0. There may be consequential changes to other areas of the code. Procedure A presentation on the changes to the Financial Security Policy will be made at the Code Modification Forum on the 21st January 2015 and Version 1.0 of the proposed business rules will be issued to Industry for consultation in the week following the meeting.

Purpose of the Proposal

• To define the Business Rules required to implement changes to the Financial Security Policies FS01 and

‘Financial Security Policy for Short Term Products’ as a result of the implementation of the EU Network Codes on Capacity Allocation Mechanisms (CAM) and Balancing.

Scope

• Based on the CAM Network Code, the Balancing Network Code and the draft ‘Interoperability and Data

Exchange’ Network Code.

• The CAM Business Rules have been completed and approved by the CER.
• Version 2.0 of the Balancing Business Rules have been completed and are being reviewed by the CER.

RECAP: CAM Key Features

• Annual (up to 15 years), Quarterly, Monthly, Daily,

Within-Day

Standard Capacity Products

• Capacity sold via auction – level of demand

determines clearing price

• Standardised EU-wide auction calendar

Capacity Auctions (Joint Booking Platform)

• Entry and Exit Capacity at both sides of an IP is

‘bundled’ together and sold as a single product

Bundling of Capacity

• Gas day 05:00 - 04:59 UTC (currently 06:00 –

05:59)

Change to Gas Day

Product Bundled Auction Frequency Auction Start (Default) Product Start Time First PRISMA Auction* Annual  Annual 1st Monday in March • 1 October Monday 7th March 2016 Quarterly  Annual 1st Monday in June

• 1 October
• 1 January
• 1 April
• 1 July

Monday 6th June 2016 Monthly  Monthly 3rd Monday in preceding month

• 1st of each month

16th November 2015 for December 2015 Day-Ahead  Daily 15:30 D - 1

• 05:00 D

15:30 on 31st October 2015 for 1st November 2015 Within-Day  Hourly 18:00 D – 1

• 05:00 D

18:00 on 31st October 2015 for 05:00 on 1st November 2015

* Based on the recommended dates in the Regulation but subject to confirmation by ENTSOG

RECAP: CAM Auctions

Financial Security Required to be in place:

Product Existing Product FS Required at time of booking Level of FS Required CAM Product FS Required at time of Auction ? Level of FS Required Multi- Annual

 

72 days



N/A N/A Annual

 

72 days

* 

0 % Quarterly



N/A N/A



N/A 0 % Monthly

 

100%

 

100% Day-Ahead

 

100% to be put in place after booking

 

100% Within-Day

 

100% to be put in place after booking

 

100%

* Annual Products can be booked for the next 15 years at the PRISMA Auction

PRISMA Financial Security Process

• PRISMA uses a system of Credit Limits to implement Financial Security.
• PRISMA maintains a dynamic Credit Limit for Shippers based on an initial Credit Limit

notified to PRISMA by the Transporter.

• The Transporter will upload a Credit Limit to PRISMA for each Shipper based on the

Shipper’s existing Financial Security with the Transporter.

• The Shipper will determine the amount of their Security to be allocated to PRISMA.
• Before updating PRISMA, the Transporter will ensure that the Financial Security will be in

place for a sufficient period of time for the Transporter.

Invoice and Payment Schedule

• Invoices are issued to Shippers the month after which the Capacity was used.

Action Timeline Invoice Issued 12 Business Days into Month after the Month in which Capacity was used Payment Due 12 Calendar Days after Invoice Date OR 2 Business Days prior to Month End; Whichever is later FS Drawdown Can take place 5 Business Days after Due Date

Proposal for Long Term Products

• Financial Security will Not be required at the time of the Auction.
• The Shipper will be required to put Financial Security in place before the effective date of

the product.

• Financial Security should be in place 10 days before the Auction for a Monthly Product with

the same effective date as the Long Term Product.

• The Shipper will be required to put sufficient Financial Security in place to cover 72 days

worth of Capacity bookings (same as current arrangement). Product Auction Date Product Effective Date Annual 1st Monday in March 1st October Quarterly 1st Monday in June 1st October 1st January 1st April 1st July

Long Term Product Financial Security Cycle

Long Term Auction Month M-1 Month M

Long Term Auction – 1st Monday in March

No Financial Security Required Financial Security Required to be in place

10 Days Monthly Auction - 3rd Monday

Product Effective Day 1st of Month

Proposal for Short Term Products

• It is proposed that full Financial Security should be in place on the PRISMA Platform prior

to commencement of the Auction.

• The Shipper will be required to assign sufficient Financial Security from GTMS to PRISMA.
• The PRISMA platform will check the Shipper’s available credit against the Capacity being

purchased prior to commencement of an auction. In the event that sufficient credit is not in place, the Shipper’s bid will be rejected.

• The Financial Security will need to remain active for a defined number of days based on the

period of exposure for the Transporter or until payment of the Invoice. Product Auction Date Product Effective Date Monthly 3rd Monday of Previous Month 1st day of Month Day - Ahead Previous Day Effective Day Within - Day Hourly Basis within Day Effective Day

Daily Auction Cycle – Maximum Period of Exposure

Month M-1 Month M Month M+1 Month M+2

Auction Last Day Month M-1 Product Active 1st M Invoice Later of: 2 Business Days prior to Month End OR 12 Days after Invoice

Maximum Number

• f Calendar Days

5 Business Days after Due Date 1 Day 8 Days 31 Days 12 Business Days into new Month 17 Days 14 Days

71 Days

Monthly Auction Cycle – Maximum Period of Exposure

Month M-1 Month M Month M+1 Month M+2

Auction 3rd Monday Product Active Invoice Later of: 2 Business Days prior to Month End OR 12 Days after Invoice

Maximum Number

• f Calendar Days

5 Business Days after Due Date 16 Days 8 Days 31 Days 12 Business Days into new Month 17 Days 14 Days

86 Days

Non – Interconnection Points Proposal

• The products offered at Non- Interconnection Points(Exit Points and indigenous Entry

Points) will not change as a result of the implementation of the CAM NC.

• The Financial Security requirements at these points for Annual and Monthly products will

remain unchanged.

• For Daily products, full Financial Security will need to be in place prior to the confirmation of

the booking. Product Type Financial Security Requirement Required When? Annual & Multi-Annual 72 days worth of Capacity M-8 Days Monthly 1 Month of Capacity M-8 Days Daily 1 Days worth of Capacity FS Required at time of confirmation of Booking

A066 – ‘EU Network Code Implementation: Transitional Arrangements’

Code Modification Proposal Presentation

EU Network Code Implementation: Transitional Arrangements

Code Modification Number: A066 Proposer: Gaslink Submission Date: 9th January 2015

Introduction

Code Modification Proposal Title and Number Code Modification : A066 EU Network Code Implementation: Transitional Arrangements Proposed Implementation Date 01st July 2015 Rationale for Implementation Date Regulation EU 312/2014 (Balancing) and Regulation EU 984/2013 (CAM) have implementation dates of 1 October 2015 and 1 November 2015 respectively, however a number of transitional arrangements need to be implemented in advance

• f this date to ensure a stable transition process.

Proposed sections of the Code to be Modified Part C: Capacity Part F: Administration In addition there may be consequential effects on other areas of the Code as a result of this modification.

Transitional Capacity Arrangements at Interconnection Points

• Annual Capacity - Allow capacity for the period up to 30th September 2016
• Daily Capacity - Last 7 days prior to first booking on PRISMA

Voluntary Bundling

• Process will be clarified - joint process with adjacent TSO
• The time period will be confirmed

Registration Process

• At Interconnection Points
• General (Enduring) process
• Transitional stage registration process
• At points which are not Interconnection Points
• Changes to registration process

Moffat Agent

• Phasing out transitional process

Intended Outcome for this Modification

• Regulation EU 984/2013 (Capacity Allocation Mechanisms)
• Also Regulation EU 312/2014 (Balancing)
• CAM Business Rules A062 – CER approved, issued 16th October 2014
• Main CAM modifications covered in A062
• Additional detail firmed up in this modification (A066):
• Transitional Capacity Booking arrangements (annual & daily)
• Voluntary Bundling
• Registration Process:
• Registration Process at IPs (PRISMA) - Transitional and Enduring
• Registration Process at non-IPs
• Moffat Agent Phasing (further to A063 ‘Nominations, Imbalance Charges &

Allocations)

Background

Transition Period – Capacity Booking Reference Table

Agreed in Code Modification A062 – Business Rules issued Oct 2014 Subject to ENTSOG auction calendar

GTMS PRISMA Product Last Capacity booking request on GTMS Last Capacity Effective Date First CAM Auction Date First Capacity Effective Date Within-Day 03:00 31st October 2015 05:00 31st Oct 2015 31st Oct 2015 1st Nov 2015 Day-Ahead 05:00 31st Oct 2015 31st Oct 2015 1st Nov 2015 Monthly 04:59 hours on the Day which is eight days prior to 1 November 2015 05:00 1st Nov 2015 November 2015 1st Dec 2015 Annual Sep 2015 Variable (as per transitional arrangements) March 2016 1st Oct 2016 Quarterly N/A N/A June 2016 1st Oct 2016, 1st Jan 2017, 1st Apr 2017, 1st July 2017

Annual Capacity – Transition Phase

Gas yr Gas yr Gas yr

2015 2016 2017 Booked On

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

PRISMA

A

n/a n/a n/a n/a n/a n/a

A

GTMS

B

• Capacity ending within this period

Agreed in previous Modification A062

• “In August / September 2015, the Transporter will request each Shipper with

existing Annual Capacity Bookings at Interconnection Points, which has an end date between [1st October 01 2015 and 1st October 2016] to advise whether it wishes to” request: a. an extension of the end date to 30th Sept 2016 (for same Capacity amount) b. request a new Annual Capacity booking to be created with an end date of 30th Sep 2016 (may be for a different capacity amount than the existing booking) c. no action be taken Proposed added detail in this Modification (A066)

• Define date that Transporter will request shipper’s preference
• Define window within which Shipper must respond to Transporter with

preference

• Define the communication route

Annual Capacity –Transitional Booking Arrangement

• Section 5.1.1 of the Code of Operations allows for the Transfer of Capacity

between two Entry Points.

• The CAM Network Code will require all Capacity at the Moffat Entry Point to be

bundled with Capacity from National Grid in the UK.

• Based on the CAM Business Rules Version 3.0, Approved by the CER on the 16th

October 2014, Entry Point Transfers involving the Moffat Entry Point will no longer be available from the 1st November 2015, once the CAM Network Code has been implemented.

• This is of particular importance as Corrib is coming online this year.

Entry Point Transfers

Current Situation

• Code Part C 1.1.40: Daily Capacity Booking Window on GTMS is from 06:00 on D-7. To 03:00
• n D
• Agreed in previous Modification A062

Proposed added detail in this Modification (A066)

• Capacity Booking Window for Daily Capacity will be changed from [24th October 2015] for

last 7 days on GTMS

• To ensure Shippers may book Daily Capacity on GTMS [only up to] first capacity effective

booked on PRISMA [05:00 on 1st November 2015].

Daily Capacity – Seven Day cut over period

GTMS PRISMA Product Last Capacity booking request on GTMS Last Capacity Effective Date First CAM Auction Date First Capacity Effective Date Day-Ahead 03:00 31st Oct 2015 05:00 31st Oct 2015 31st Oct 2015 1st Nov 2015

Requirement for Voluntary Bundling

• Regulation EU 984/2013 - CAM (Art 20)

Agreed in previous Modification A062

• Shipper with Entry or Exit Capacity booking at an IP with an end date which extends

beyond [30th September 2015]

• May submit a ‘Bundling Request’. No later than [60 days] prior to the start of the bundling

period

• Single EIC is required

Proposed added detail in this Modification (A066)

• Define the bundling request window for the Voluntary Bundling to Shippers
• Which Transporter to approach with booking request is clarified
• Process for Transporter and Adjacent Transporter to communicate is clarified
• Window for Transporter to notify adjacent Transporter of bundling request is clarified
• Response time from Transporter’s receipt of bundling request from adjacent

Transporter is clarified

• Define phasing out of unbundled capacity

Voluntary Bundling

Agreed in previous Modification A062

• Enduring PRISMA Registration process (outline)

Proposed added detail in this Modification (A066)

• Enduring Registration process at Interconnection Points (detailed):
• Transitional Registration Process at Interconnection Points:
• Enduring process adapted to reflect transition to PRISMA in Oct / Nov 2015
• Timelines re registration with adjacent TSO, EIC Codes, PRISMA training etc.
• Registration Process at non-Interconnection Points:
• Current Code requirement for Shipper to have min 1kWh long term booking in
• rder to make short term bookings
• Not feasible with new auctions, therefore new registration process required

for all points on network

Registration Process

• Referred to in previous Modification A063 ‘Nominations, Imbalance Charges &

Allocations’

• Transporter / Moffat Agent will schedule a dedicated workshop to present details of

transition period

• Outline of initial proposals on following slides

Moffat Agent Phasing Out & Additional Modifications

Moffat Agent Transition

• 60

Nominations:

• Moffat Agent will match nominations up until (and including ) Gas Day 30 September
• Last matching run by MA will be at 01:00 on 1 October (i.e. latest renominations for

the Gas Day 30th Sept)

• TSOs will commence processing nominations at 13:00 on 30th September
• i.e. D-1 Nominations for Gas Day 1st October

Moffat Agent Transition

• 61

Allocations:

• Moffat Agent will perform Allocations up until (and including) Gas Day 30th

September

• Allocations ‘Close-out’ under the MAA rules runs to D+5
• Shippers can submit change requests and MAA can perform reallocation up to close-
• ut
• Close-out (for Gas Day September 30th) will be at 16:00 on 5th October
• TSOs will perform allocations for Gas Day October 1st and thereafter
• Allocating whole, in line with the OBA
• OBA to commence allocating steering difference to OBA account for Gas Day

commencing 05:00 on 1st October

• ‘Overlap’ between 1st October and 5th October
• MAA still finishing Gas Days to end September whilst TSOs are allocating for Gas

Days post 1st October

Shipper Readiness

Market Assurance Process

• Ensures market participants have project plan in place and assesses progress against the plan
• Monitors and controls necessary changes implemented by market participants to their own

systems

• Gives confidence to the market that the risk of disruption has been mitigated

Market Assurance Process

• Initiate phase

 Scoping: Questionnaire to determine scope of assurance needed  Induction: Induction meeting and indicative timeline for completion of assurance related activities

• Execute phase

 Project planning assessment: Ensuring formally planned project is in place  Internal test programme review: Ensuring market participant’s actions have no adverse effect on market  Cross participant test review: Ensuring market participants can successfully interact with central market systems

• Report phase

 Final market assessment report: Assurance recommendation to CER

Market Assurance Process

• Some key dates for shippers

 Now: Apply for EIC code (Eirgrid: http://www.eirgrid.com/customers/energyidentificationcodeseic/  Feb 2015: Initiate the UK license application process  April 2015: Register on PRISMA  Q2 2015: PRISMA training

1st Oct 2015 1st Aug 2015 1st March 2015 Go Live 31st Oct 2015

Market Assurance Process

Scoping Internal test review Induction 1 February 2015 Internal testing

Initiate

Final Market Assessment Cross participant testing

• Execute

1st June 2015 1st April 2015

PRISMA Registration Process

Register EIC code PRISMA testing PRISMA registration 1 February 2015 PRISMA training

• Execute

1st Oct 2015 Go Live 31st Oct 2015

1 July 2015

UK Licence Application Process (indicative)

Apply for shipper license Accede to Uniform Network Code Sign confidentiality agreement 1 February 2015 Install IXN equipment

5 months

Credit limits and security Legal opinion Exit meter registration E-training

4. European Network Code Implementation

5. European Network Code Development

Incremental Capacity Verbal Update

Capacity Auctions Timing Verbal Update

6. Other EU Updates

REMIT

REMIT Update

• REMIT implementing acts entered into force on 7th January (Reg. no.1348/2014)
• Market Participants required to report:

 Wholesale energy products executed at organised market places by 7th October 2015  Contracts and derivatives concluded outside and organised market by 7th April 2016

• TSO required to report:

 Nominations, re-nominations and final allocations and on transportation contracts by 7th April 16

• An Organised Market Place (OMP) must provide a Registered Reporting Mechanism (RRM) to

Market Participants that request it

• GTMS is not an OMP as it doesn’t “bring together multiple third party buying and selling interests”
• Gaslink has no plans to provide an RRM facility to the market place
• Reporting transactions is the responsibility of the Market Participants

REMIT Registration Process

Barry Hussey – Gas Commercial CMF – 21/1/2015

REMIT Implementing Acts published!!

• Published on December 17th 2014, entered

into force January 7th, 2015

• Transaction reporting (standard contracts)

to start in 9 months (not six) = October, 7th 2015

• Reporting of non-standard contracts to start

in 15 months (not nine) = 7th April, 2016

Registration of market participants

• By March 17th, the CER will need to submit to

ACER a registry of market participants

– Market participants will be required to register via Central Registry of European Market Participants (CEREMP) – A portal to this will be published on the CER website in the coming days, along with a guide to using the platform

• CER will return with presentations on next steps

(Phase 2 of registration; data reporting)

Who should register?

• According to Art.2.7 of

REMIT -

“Market Participant” means any person, including transmission system operators, who enters into transactions, including the placing of

• rders to trade, in one or more

wholesale energy markets

• Except those under the

de minimus threshold… Production units below 10MW total output electricity; 20MW total output gas.

• According to Art.9.1 of

REMIT –

Market participants entering into transactions which are required to be reported to the Agency in accordance with Article 8(1) shall register with the national regulatory authority in the Member State in which they are established or resident, or, if they are not established or resident in the Union, in a Member State in which they are active.

Where to register?

Registration process – Step 1

• MPs will first set up

their account on CEREMP, accessed via link on CER website

PHASE 1

PHASE 1

Step 3 – Result!

The CER will receive email at this point; review details and then confirm MP registration on CEREMP PHASE 1

Step 4 – Activation email

PHASE 1

Step 5 – Set password

PHASE 1

Step 6 – Log-in token

• After successfully changing password, MP will

receive a Token (code) via email

PHASE 1

Step 7 – Log-in

PHASE 1

PHASE 1

Step 9 – Natural person information

PHASE 1

Step 10 – Ultimate Controller Information

PHASE 1

Step 11 - Corporate Relationship

Just hit ‘Next’ here, this is covered in Phase 2, after March 17th PHASE 1

Step 11 (Optional) –

Delegated Party Information (for reporting on behalf of the Market Participant)

PHASE 1

Step 12 - Confirmation

PHASE 1

Phase 2 – Information relation to corporate structure

• Once the initial register is published by

ACER (after March 17th, 2015)…

– MPs shall provide information relating to the corporate structure of the market participant. – This information has to be completed within 3 months from the first publication of the European register.

• CER will provide further updates on next stages of the

process

7. National Grid – UK Shipper Registration Process

Brief History of Xoserve

Background to Xoserve

• Founded 1st May 2005
• Jointly owned by the five major gas distribution network companies and

National Grid’s gas Transmission business.

• Manages the complex interfaces and transactional services between the

major gas transporters operating in Britain and their customers, the gas shippers.

• Provides key services that support the contractual and licence obligations of

the major gas transporters.

Distribution Networks

The role of Xoserve within the industry

Gas Act Uniform Network Code Network Operators Agency Services Agreement Non Regulated Utility Act

Obligation Source Service Delivery

Shippers Suppliers Meter Asset Managers Others

Recipients

CUSTOMER LIFE CYCLE ACTIVITIES

User Changes & Amendments

2

User Admission

1

Terminations & Voluntary Discontinuance

3

Customer Lifecycle Activities

• To co-ordinate the end to end process to facilitate Shipper/Trader

User entry & exit as a User under Uniform Network Code including any business changes they may undergo through the company’s lifetime.

• Ensure all interested parties are informed of; & undertake any

actions required to support the end-to-end process.

Role of the Customer Lifecycle Team

* A Shipper User must be granted a Shipper licence before going live. A Trader User does not require a licence * * A copy of the Uniform Network Code can be obtained from http://www.gasgovernance.co.uk/UNC * * A Legal Opinion is required for all companies registered outside of England and Wales and allows a disagreement/breach to be rectified through that country’s legal system

Apply for a Shipper Licence if involved in the conveyance of gas* Customer Application Form and User Admission Fee (£3,010+VAT) Confidentiality Agreement & IXN Agreement Credit Limit (Energy and Transportation) IXN Equipment (£13,359 or £762 + VAT if configuration) Accession Agreement Obtain copy of Uniform Network Code Legal Opinion System Accounts, XP1 & Gemini E-Training Go Live

User Admission Steps

• Change of Contact Details
• Company Name Changes
• Takeovers & Mergers
• Equipment moves & changes

Changes and Amendments

• User Admission
• Challenges to Accession and Confidentiality Agreement requiring NG Legal

input

• Agreements sent to NG Transmission for signature
• User Admission Meetings with Customer

Transporter Involvement

• Voluntary Discontinuance
• Checks performed by NG prior to User leaving market
• Cessation Notice issued via NG Control Room (Surefax)

• Mergers/Takeovers
• All directed to National Grid Transmission for legal consideration

Transporter Involvement

• Terminations
• Can be driven by Transporter for financial/contractual breach
• Checks performed by NG prior to User leaving market
• Cessation Notice issued via NG Control Room (Surefax)

• Voluntary Discontinuance is the controlled process a User goes through if they wish to cease

being a User and exit the market.

• A User cannot cease to be a User until they have completely satisfied all their obligations in

Uniform Network Code section v4.2 and any Ancillary Agreements.

• The Termination process would be triggered by a Transporter if a User could not meet their

contractual or financial obligations.

• Customer Life Cycle will:
• Issue ‘Ceased User’ notifications to other Users
• Ensure provided equipment is returned
• Close the system accounts of the User
• Provide one point of contact for Transporters information requests.

Voluntary Discontinuance & Termination

Useful Information

Guidelines for becoming a shipper User or Trader www.xoserve.com/ourservices/customerlifecycle/p ublications/Applicant user handbook Customer Application form to become a shipper user http://www.xoserve.com/customerlifecycle/publications/ Customer application form Uniform Network Code http://www.gasgovernance.co.uk/networkcode/unc/tpd Section V .2 – 4 provides the requirements for User Admission Section V 4.1 -5 provides the requirements for voluntary discontinuing to cease to be a gas shipper and the termination process for a user that is in default

• f their obligations.

Helen Field or Mike Orsler Telephone: 0121 623 2449 Email: Customerlifecycle.spa@xoserve.com Address: Xoserve Limited 31 Homer Road Solihull West Midlands B91 3LT

Supply Point Administration (SPA) Role

• The SPA team deals with the supply point administration (SPA) for

Interconnector Shippers.

• We process the notification and ensure the legal documents to be

drafted and signed.

• The notification is then confirmed, and we produce a Logical Meter

Number (LMN) for the activity and inform the Shipper of their LMN for the site.

• National Grid set the LMN up on Gemini.

What needs to happen?

• Users of the Interconnectors need to be licensed Shippers
• Liaison with Ofgem and Xoserve’s Customer Lifecycle team
• Users need to complete the registration form
• Request from Xoserve SPA team
• Complete the registration form, giving 20 working days’ notice
• Forward to Xoserve SPA team
• Users must accede to the legal agreements covering

Interconnectors

• Liaison with National Grid Transmission

Enquiry & Response

Timescales D-5 D Shipper xoserve SPA Network Legal Send written enquiry Receive registration forms Receive Accession Agreements Receive written enquiry Forward Registration Forms & send request to Legal dept. Receive Request For Accession Agreements Send Accession Agreements to Shipper

Registration Process

Timescales D-20 D

Shipper xoserve SPA Network Legal

D-2 (at latest)

NTS Commercial

Send completed Registration Forms and Signed Accession Agreements Receive Registration Forms and Accession Agreements Process registration and send Signed Agreements to NTS Asset Commercial Send Logical Meter Number(s) Arrange for National Grid signature on Agreements.When done send one to Shipper, other to Legal Receive Accession Agreement for Archiving and sending copy to Ofgem Receive fully signed Accession Agreement Receive Logical Meter Number(s) LIVE

NB - All shippers must have an interruptible portion/LMN for Interconnector activities.

Withdrawal from the Interconnector

• To withdraw from the Interconnector, a User must advise xoserve SPA via a

withdrawal notice on letter headed paper.

• A copy can be faxed or sent in the post.
• Give 10 clear working days’ notice in line with the CSEP Ancillary Agreement

clause 3.7 (b)(i).

• Letter to contain the following conditions:
• a) You wish to cease to be a CSEP User and a Party to either the UK-Continent

Interconnector or GB Ireland CSEP Ancillary Agreement dated 25 August 1998

• b) the date on which that cessation is to be effective;
• c) that on that day
• (i) you will not hold any Available NTS Exit Capacity at the CSEP;
• (ii) you will not hold any Registered NTS Exit Capacity at the CSEP; and
• (iii) you will not be a part to any outstanding System Capacity Transfer in relation to the

CSEP

Withdrawal from the Interconnector

Timescales D-11 D

Shipper xoserve SPAM Network Legal

D-2 (at latest)

Gas Operations

Send withdrawal request

• n Letter Headed

paper Receive Withdrawal Letter and send to Legal Process and send Withdrawal Notice to Gas Operations to De-activate LMN(s) Send De-activated LMN(s) De-activate LMN(s) Receive Withdrawal Letter and close original Ancillary agreement Receive De-activated notice of LMN(s) LIVE

NB – You must send a letter for each Interconnector Ancillary Agreement you wish to withdraw from i.e. Bacton & Moffat

Receive De-activated LMN(s) notice

SPA Off-Line Team & Contacts

Sue Treverton Account Officer uniquesites.spa@xoserve.com

Lenna Wallace

Account Administrator uniquesites.spa@xoserve.com

QUESTIONS ?

8. Any Other Business

9. Date of next Code Modification Forum

Proposed Date: Wednesday 4th March 2015 Location : Cork

Thank you for your participation