Network Code on Capacity Allocation Mechanism NC CAM Commission - - PowerPoint PPT Presentation

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Network Code on Capacity Allocation Mechanism NC CAM Commission - - PowerPoint PPT Presentation

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Network Code on Capacity Allocation Mechanism NC CAM Commission Regulation (EU) 2017/459 Johannes Lambertz Regulatory Affairs Kiev, 5th December 2019 Contents 2 1. Legal basis and development 2. Subjects of NC CAM 3. Wrap-up MGU

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Network Code on Capacity Allocation Mechanism – NC CAM

Commission Regulation (EU) 2017/459 Johannes Lambertz – Regulatory Affairs Kiev, 5th December 2019

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Contents

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1. Legal basis and development 2. Subjects of NC CAM 3. Wrap-up

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Legal basis and development

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Legal Basis and Development

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3rd EU Package (2009)

EU-COM ACER ENTSOG

Directive 2009/73/EC

Rules for the internal market

Regulation EC 713/2009

Establishing ACER

Regulation EU 715/2009

Access conditions

Framework Guidlines on Capacity Allocation Mechanisms

(03.08.2011)

Framework Guidelines

  • n Gas Balancing

(18.10.2011)

Framework Guidelines on Interoperability and Data Exchange Rules

(26.07.2012)

Network Code on Capacity Allocation Mechanisms (first version: 14.10.2013)

(latest version: 16.03.2017)

Network Code on Gas Balancing

(26.03.2014)

Network Code on Interoperability and data exchange

(30.04.2015)

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Legal Basis and Development

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Roles and responsibilities in NC development process ▪ European Commission: Sets priorities ▪ ACER: develops Framework Guidelines (FG) defining scope and objective ▪ ENTSOG: develops NC in line with FG ▪ Network users/stakeholders: Involved via consultation ▪ ACER: Checks NC on consistency with FG and gives recommendation to EC ▪ EC: Adopts the NC ▪ Member States: Final vote via comitology process

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Legal Basis and Development

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Legal Basis and Development

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Subjects of NC CAM Commission Regulation EU 2017/459

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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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General Provisions and Principles of Cooperation

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General Provisions ▪ Subject matter:

  • Standardized capacity allocation mechanisms
  • Including auction procedures

Principles of Cooperation ▪ Coordination of maintenance:

  • Compulsory cooperation to avoid reductions

in capacity offers

  • Standardisation of communication:
  • In particular to/with booking platform

▪ Scope:

  • Interconnection points
  • Firm and interruptible capacity

▪ Capacity calculation and maximisation

  • Offer of the maximum bundled capacity
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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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Allocation of Firm Capacity Products

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Standard capacity products: ▪ Yearly:

  • Gas year (October – October)
  • 5 to 15 years ahead
  • Auction: Once a year (1st Monday of July)

▪ Quarterly: ▪ Monthly:

  • 1 month ahead
  • Auction: 3rd Monday of each month

▪ Daily:

  • 1 day ahead
  • Auction: 15:30 till 17:00 (UTC)

▪ Within-day: ▪ Rest of the day product ▪ 1st round closes at 1:30 (UTC) last round closes at 0:30 (UTC)

Start of auction Number of auctioned quarters

1st Monday of August 4 1st Monday of November 3 1st Monday of February 2 1st Monday of May 1

ENTSOG Auction calendar: https://www.entsog.eu/en/index/index/module/search?q =calendar

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Allocation of Firm Capacity Products

Reservation quotas ▪ Period ≤ 1year: 100 % of available capacity bookable ▪ Period > 1 year: 90 % of available capacity bookable ▪ Period > 5 years: 80 % of available capacity bookable

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Allocation of Firm Capacity Products

Ascending clock algorithm ▪ Yearly, quarterly and monthly products ▪ Publication of auction details according to the auction calendar ▪ Number of bidding rounds depends on the demand of all participating shippers ▪ Bids are placed at a given price (→ submission of an amount of capacity) ▪ The price steps of the auction are set by the TSOs Uniform price auctions ▪ Day-ahead and within day ▪ Publication of the auction with the start of the auction ▪ One bidding round ▪ Bid = combination of capacity amount and surcharge ▪ TC can place up to 10 bids per auction

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Allocation of Firm Capacity Products

Ascending clock algorithm ▪ Sum of all placed bids in the bidding round is higher than the available capacity (oversell) → the auction continues with the next bidding round ▪ A large price step is applied and shipper can place bids at the new price ▪ If the total demand of all placed bids in the bidding round is equal to the available capacity: capacity contracts are concluded ▪ The clearing price of the auction in this example is P2 (Regulated Tariff + 2 large price steps)

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Allocation of Firm Capacity Products

Uniform price algorithm ▪ Day-ahead and within-day ▪ Bid = combination of capacity amount and surcharge ▪ Bids by all shippers are evaluated in a descending

  • rder according to the willingness to pay

▪ Allocation of capacity is done after the bidding round is closed ▪ The lowest surcharge of all successful bids is considered the clearing price ▪ Depending on the received bids the clearing price is determined by either the fill-or-kill procedure or the pro-rata procedure

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amount

G5 G4 G1 G2 G3

price

available capacity

Minimum amount

clearing price

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Allocation of Firm Capacity Products

Uniform price algorithm – Detailed example ▪ Day-ahead ▪ 500 unit available

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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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Bundling of Capacity at Interconnection Points

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Bundled capacity products ▪ Jointly offered by adjacent TSOs ▪ Joint nomination procedure shall be established ▪ Bundled capacity can only be resold as bundled capacity ▪ Capacity overhang on one side is offered as firm unbundled capacity ▪ Establishing of virtual interconnection points (VIP)

unbundled Available firm capacity

OGE Adjacent TSO

bundled

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Bundling of Capacity at Interconnection Points

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Establishing of virtual interconnection points – two (or more) IPs connecting the same E/E-system ▪ Two separate bundled products at both IPs ▪ One bundled product at VIP VTP 1 VTP 2

IP 1 IP 2

Bundled Product at IP 1 Bundled Product at IP 2

VTP 1 VTP 2

IP 1 IP 2

Bundled Product at VIP

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Bundling of Capacity at Interconnection Points

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Bundling of contracted capacity ▪ Network users holding unbundled capacity products on both sides of an IP shall make best efforts to bundle it ▪ Capacity conversion mechanism ▪ Conversion from unbundled to bundled capacity ▪ Acquisition of bundled and simultaneous return of (old) unbundled ▪ Free of charge ▪ Yearly, monthly, quarterly

Available firm capacity

OGE Adjacent TSO

booked

booked unbundled available available Corresponding capacity cannot be booked

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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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Incremental Capacity Process

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Let‘s skip the process for now

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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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Interruptible Capacity

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Yearly, quarterly, monthly products ▪ Optional offer ▪

  • Conditions. Firm capacity is:

a) Sold at an auction premium b) Sold out c) Not offered DA products ▪ Obligatory offer ▪

  • Conditions. Firm capacity is:

a) Sold out b) Not offered → Allocated via auction process Within-day products ▪ Obligatory offer ▪ Only offered if firm capacity is sold out → Allocated via over-nomination procedure With the exception of within-day interruptible capacity, all dates for interruptible capacity auctions shall be detailed within the auction calendar

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Interruptible Capacity

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Interruption lead-times ▪ To be defined by respective TSOs ▪ Default minimum lead-time 45 minutes after start of renomination cycle Coordination of interruptions ▪ Order by timestamp of booking ▪ In case of identical ranking → pro-rata reduction Reasons for interruptions ▪ Reasons have to be included in ▪ Interruptible transport contracts, or ▪ GTC

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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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Capacity Booking Platforms

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Platform ▪ One or limited number of joint platforms ▪ Web based ▪ Operated by TSO or via third party ▪ Rules for booking platforms:

  • Allocation acc. to NC CAM rules
  • Provide platform for secondary capacity
  • Capacity at one (V)IP shall be offered at one

booking platform → Contractual agreement to use one platform for both sides of each (V)IP

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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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Final Provisions

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Implementation monitoring ▪ ENTSOG has to assist ACER in its monitoring duties ▪ TSOs have to submit all relevant information to ENTSOG

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Subjects of NC CAM

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1. General Provisions 2. Principles of Cooperation 3. Allocation of Firm Capacity Products 4. Bundling of Capacity at Interconnection Points 5. Incremental Capacity Process 6. Interruptible Capacity 7. Capacity Booking Platforms 8. Final Provisions

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Incremental Capacity Process

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▪ At existing IPs ▪ By establishing a new IP ▪ A physical reverse flow capacity at an IP, which has not being offerd before

What is incremental capacity?

“a possible increase in technical capacity that may be offered based on investment or long term capacity optimization and subsequently allocated subject to the positive outcome of an economic test”

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Incremental Capacity Process

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▪ Jointly with stakeholders, ENTSOG developed a standardised and coherent process for the realisation

  • f incremental capacity

▪ Core is a harmonised and simultaneous assessment of demand for incremental capacity across the EU ▪ Intensive cooperation and coordination between TSOs, NRAs and network users

Objective of Incremental Proposal

“to stablish a market-base procedure to satisfy all economically reasonable and technically feasible demand for capacity”

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Incremental Capacity Process

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Timeline

Network User has interests in incremental capacity

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Wrap-up

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Wrap-up

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Capacity Allocation Mechanisms, applicable since 11/2015

Harmonised auction procedures and bundled products enhance transparent and equal access

Standardised set of bundled capacity products Auctions via booking platforms Short term reservations Virtual interconnection points

Simplify allocation procedures Establish one-stop- shop for booking Ensures availability of short term capacity Facilitate hub-to-hub booking

Objective

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Thank you very much