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European Developments

Transmission Workgroup

5th July 2012

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Gas Balancing Update

Transmission Workgroup

ENTSOG - Current project plan

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Stakeholder

Workshop

Dec Jan Feb Mar Apr June JulyMayNov Jun JulOct Apr Aug Sep Nov

Invitation from Commission

SubmitNetwork Code

Project launch13/14 Dec 23 SJWS

7-8 SJWS

Consultation

May

Workshop

FG Development of Network Code with stakeholder on the basis of the final Framework Guidelines ACER

2011 2012

Development of draft network code in cooperation with stakeholders ENTSOG

Oct

9 SJWS 26 SJWS

11-12 SJWS

Date Event

12 June 2012 Deadline for responses to the public consultation

26 July 2012 Post-consultation workshop

22 August 2012 Code and supporting document published; Stakeholder process starts

4 September 2012 Stakeholder Support process ends

5 November 2012 Final ENTSOG – drafted Code submitted to ACER

Responses to ENTSOG consultation on draft balancing code

Total of 50 stakeholder responses received by ENTSOG

2 confidential

8 UK

Responses are generally supportive of work done to date

150 issues are being investigated by ENTSOG

Majority of issues are relatively minor in nature

Some text changes will be made as a result of the feedback received

Next steps

ENTSOG response to be presented at Refinement Workshop on 26th July

Legal text to be amended accordingly and will be finalised in August prior to the start of the stakeholder support process in September

EU CAM Network Code and CMP Guideline Update

Transmission Workgroup

Capacity Allocation Mechanisms (CAM) - Update

ACER published Reasoned Opinion no. 04/2012 on CAM 5th June 2012

“.. Generally shows a high degree of compliance with the Agency's Framework Guidelines (FGs).” However.. some specific provisions not in line with the FGs; or with the objectives; or are out of scope.”

Items considered not to be fully in line:

Definitions

Virtual Interconnection points (Entry / Exit systems rather than Transmission networks)

Additional Capacity (CMP definition instead of CAM)

Capacity Contract (Prefer Transport Contract)

Capacity Allocation Mechanisms(CAM) - Update

Application to New Technical Capacity

Code does not include incremental Capacity however opinion considers that incremental Capacity is only exempt from the auction allocation process, allowing for other mechanisms to allocate incremental capacity.

All other sections of the FGs should be applicable to incremental such as

bundling and capacity products / durations should apply.

Standard Contracts

Code defines standardised capacity services and allocation mechanism (FGs defines a standardised content and general T&Cs). Assessment needed to see whether full standardisation can be done due to different national legal frameworks.

Capacity Allocation Mechanisms(CAM) - Update

TSO Cooperation

Code defines the sharing of information with Users. Further details required for TSO to TSO information sharing such as flow forecasts, network availability and potential congestion.

Capacity Breakdown

Concerns expressed that auctioning 90% for 15 years could create barriers for new entrants and suggests no room for ‘learning lessons’

NRAs to review amount of capacity for each long and short term service

Considers that more to be withheld for shorter term horizons (4-5 yrs)

A quarterly product offered more than just year ahead alongside a yearly product would allow Users a ‘second chance’

More flexibility to implement at IP level shorter term (and more stringent) quotas

Needs to be aligned either side of IP

Subject to consultation with Users, TSOs and NRA agreement.

Capacity Allocation Mechanisms (CAM) – Update

Sale of Unbundled Firm Capacity

FG sets out the objective to progressively bundle the entire technical capacity, including new capacity

The offer of unbundled capacity up to 15 yrs may therefore prevent the objective of progressively bundling capacity at IPs

Suggest that limiting the sale of unbundled to, for instance, up to the rolling monthly auction.

Amendment of Existing Capacity Contracts

Amend NRAs “shall” to NRAs “may” mediate.

Capacity Allocation Mechanisms (CAM) – Update

Interruptible Capacity

Justification and NRA approval to reduce interruption lead times below 2 hours

Relationship to Noms / Renoms process in Balancing Code highlighted.

Tariffs

Removal of the Revenue Equivalence Principle

Equal split of premium revenues

Removal of revenue shortfalls and tariff adjustments

Temporary nature of Tariff aspects contained in CAM due to forthcoming Tariff Code.

Capacity Allocation Mechanisms (CAM) – Update

Incentive Regimes

Recognises the merits of incentives when it will have an effect on the cross-border capacity offer, but consider is not necessary to explicitly include in Code.

Interim Period

Removal of the interim period for applying auctions (subject to NRA decision) as the FGs leaves the decision on interim measures to the Comitology process.

Capacity Allocation Mechanisms (CAM) – Update

Initial discussions already held between ENTSOG and ACER & EC

European Commission (EC) expect Comitology to start no later than Dec 2012

Early indication is that ACER & EC consider that opinion should be applied and Code amended

Ongoing ENTSOG analysis into impacts and options currently being considered.

Constraint Management Principles (CMP) Update

CMP approved by Member States at the Comitology meeting on 20th April 2012

GB has to be compliant by 1st October 2013 (July 2016 for Firm Day Ahead UIOLI)

Compliance / Impact Assessment discussed with Ofgem

We understand that Ofgem is also discussing compliance with GB Interconnector Operators.

Constraint Management Principles (CMP) Update

National Grid considering:

How can we make CMP for Oct13 work?

Implications

TSO – TSO cooperation – obligation to work with other TSOs.

Ten Year Network Development Plan 2013 – 2022 Update

Transmission Workgroup

TYNDP Background

As per the 3rd Energy Package, ENTSOG has to produce a European Ten Year Network Development Plan every two years, the last report was published February 2011. The next iteration of the report will cover the period of 2013 to 2022.

The proposed TYNDP improvements are based on 3 different types of feedback received from the previous report

ACER Official Opinion

Main improvements expected in, demand analysis, market integration assessment & stakeholder involvement

Stakeholder Joint Working Sessions

ENTSOG organised 7 sessions between January and May this year around demand, supply, infrastructure projects, security of supply and market integration, these session were attended by a wide range of stakeholders

Bilateral Talks with ENTSOG

ENTSOG are always willing to hold bilateral talks to discuss very detailed points or confidential issues

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TYNDP Improvements

Demand

Upgraded consistency and transparency in the assumptions and methodologies of the demand scenarios

Attention to power generation dynamics: reviewing the link between the electricity and gas systems

Consideration of EU political goals

Supply

Based on publicly available data, ENTSOG will define a maximum, medium and minimum supply potential by source

Market Integration

The expansion of the supply penetration assessment, investigating in particular to see if every country has physical access to every source, and if not why not.

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TYNDP Improvements Continued

Security of Supply

Only a slight evolution in the definition of disruptions (especially technical ones) and UGS low deliverability in comparison with TYNDP 2011-2020

Infrastructure

The clustering used for modelling will remain based on 2 scenarios: “existing infra. + FID” & “Existing infra. + FID + non-FID” combined with 3 dates: 2013, 2017 & 2022

At a recent TYNDP Workshop, ENTSOG produced 61 slides on the new TYNDP Concept, it is important to highlight there is a wealth of information available to those that want to know more on the ENTSOG website.

http://www.entsog.eu/events/TYNDP5/presented.html

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TYNDP Next steps Now to Mid-September is the data collection period

All data has to be collected by mid-September 2012.

ENTSOG will gather the supply and demand data, whilst the TSOs’ will submit their infrastructure projects

Third-party (non-TSO) infrastructure project collection is now officially available

From Mid-September to December macro-analysis and simulations to be completed

ENTSOG will analyse the supply and demand scenarios at European level

200 cases will be modelled and analysed

ENTSOG will then produce the report focusing on the clarity of the results

Finally from January to February the report to be approved and published

A major report like the TYNDP requires extensive internal approval

Targeted public release for February 2013 opening a 3-month formal consultation period before submission to the ACER

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EU Incremental Capacity

Transmission Workgroup

Incremental Capacity

Council of European Energy Regulators (CEER) have started work on “Identification and Allocation of Incremental Capacity”

Looking at in the context of existing Gas Target Model, EC Energy Infrastructure Proposal, & CAM Framework Guideline

ENTSOG have started preliminary consideration

National Grid will fully participate in process and look to share experience of GB model

Further update when CEER views / plans are made available.

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Interoperability & Data Exchange Update

Transmission Workgroup

EU Interoperability & Data Exchange Code

ACER’s consultation on Framework Guidelines has concluded

National Grid NTS’ response was summarised at last month’s meeting

We expect the following to be completed in July:

ACER’s final Framework Guideline proposals

ACER’s evaluation of consultation responses

Impact Assessment produced by ACER’s consultant

ENTSOG is preparing its Project Plan and Launch Documentation

The 12 month period for Code development is expected to commence in early September 2012