| 3 Regional Concept – 3rd package. Member States » cooperation for the purpose of integrating national markets at least at regional level » In particular promote the regional cooperation of network operators. TSOs » cooperation on a regional level » ENTSOG concept. Regulators » development of competitive and properly functioning regional markets » Agency concept » cooperation at least on regional level (operational arrangements for optimal management of the network, joint electricity exchanges, capacity allocation across borders). Agency » monitor the regional cooperation of transmission system operators
| 4 Balancing Shortcomings (Sector Inquiry). Too small balancing zones » Barrier to competition: small zones smaller portfolios higher risk of imbalances and onerous penalties. Too numerous balancing zones » Fragmentation increases complexity of shipping gas higher cost » Barriers resulting from the need to reserve capacity at each border point entering/leaving a balancing zone LINKED: constraints of capacity allocation mechanisms » Partial remedies: e.g. possibility of cross-zonal capacities (GRTgaz, Fluxys, E.ON Ruhrgas). Balancing model - charges » TSOs first use linepack and usually are able to balance the system between from short/long users » Beyond that TSOs enter in a trading role ( spot market, longer gas term procurement, storage). Differences in gas quality. No harmonised balancing rules across borders
| 5 Too small balancing zones Ration between smallest and biggest zone 1:278 1:40 – if corrected for the smallest zones (specific LL gas situation) and the largest (major cross border relevance) Source: Energy Sector Inquiry 2006, Full Report – part 3, figure 76
| 6 Too many balancing zones Source: Energy Sector Inquiry 2006, Full Report – part 3, Table 37
| 7 Harmonisation Source: Energy Sector Inquiry 2006, Full Report – part 3, table 38/41
| 8 Balancing – 3rd package. Market based balancing rules obligatory (Art 7 Gas Regulation) » Spot market or tendered gas term procurement. Improved transparency in order to allow TSOs timely corrective actions (Art 7 Gas Regulation) » Develop technical codes and standards – inter alia on balancing » TSOs to provide information on the balancing status of users » sufficient, well-timed and reliable and online based » Free of charge » TSOs to make public ex-ante and ex-post supply and demand information, based on nominations, forecasts and realised flows in and out of the system » TSOs shall make public measures taken and costs incurred and revenues generated to balance the system. Possibility for annexed guidelines (Art 9 Gas Regulation). TSO cooperation with a view to harmonise across border (ENTSOG)
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