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Presentation on theme: "Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight."— Presentation transcript:

1 Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight line. European Workgroup 1 st May 2014

2 1. General Update 2

3 Code Status Update CodeCurrent StatusImplementation date Congestion Management (CMP) Implemented1 st October 2013 (Fixed) Capacity Allocation Mechanism (CAM) CAM approved for EU wide implementation at relevant EU IPs.1 st November 2015 (Fixed) Gas Balancing (BAL) BAL approved for EU wide implementation 26 th March 2014 (Commission Regulation (EU) No 312/2014 establishing a Network Code on Gas Balancing of Transmission Networks.) 1 st Oct 2015 (subject to NRA approval for additional 12 months) (Fixed) Interoperability & Data Exchange (INT) In comitology. Comitology meetings postponed from 28 th April and 11 th July 2014, new dates TBC. Q (Estimated) Tariffs Under development. Code to be submitted 31 st December 2014.Estimated earliest mid January Applicable from October Incremental Capacity Under development. Incremental Capacity to be introduced via combination of new articles in CAM Network Code and via Tariffs Network Code. Code amendment to be submitted 31 st December Applicable from March 2017

4 Gas Codes Timeline

5 Road Map Notes: 1) Short term UIOLI may not be required for NTS 2) Long term capacity auctions may need to be delivered in conjunction with short term auctions

6 2. EU Code Updates

7 Gas allocations at IPs under the EU Interoperability Code

8 8 Background – the current GB allocations regime  The GB commercial regime has always kept ‘transportation’ and ‘energy’ responsibilities separate  Shippers are allocated gas according to measured quantities  Shippers use allocation agents to administer allocations on their behalf based on measured quantities - and to send allocation statements to NG

9 9 Background – Interoperability Code provisions and stakeholder views  TSOs must agree a nomination matching rule/process and for this to be included in the Interconnection Agreement (IA)  ‘allocate as nominate with Operational Balancing Account (OBA)’ allocation rule envisaged, and for the allocation rule to be included in the IA*  OBA favoured by IUK, BBL and supported by Gaslink – NG working with adjacent TSOs to facilitate OBAs (retaining NG’s residual balancing role) * for any IP, an OBA will be used if at least 1 TSO wants this arrangement.

10 What is an OBA? ShipperTSO Allocates 4 Units Nominates 4 Units 4.01 Units steered Across the IP Operational Balancing Account = (4 – 4.01) = 0.01 GB current regime: 4.01 units would be allocated to shippers and scheduling charges apply for the 0.01 ‘steering error’ OBA regime: 0.01 is allocated to the OBA which is corrected by a subsequent physical steer of flow between TSOs

11 11 OBA key issues and implications  Size of steering tolerance  Interactions with other aspects of the GB regime  Steering tolerance breaches must be minimised in order to comply with the Interoperability Code  An option in relation to breaches in steering tolerance is reversion to allocate as measured

12 12 National Grid NTS’ proposed approach (1)  An allocate as nominate regime appears to remove the need for an agent to administer allocations on shippers’ behalf  …therefore, NG’s proposed approach is to perform matching / allocation process directly with adjacent TSO, as envisaged by the Code (No Agents)  Shippers could continue to be able to nominate agents for other communications under UNC TPD V

13 13 National Grid NTS’ proposed approach (2)  ‘ De-designate’ IP allocation agents in order to enable direct TSO-TSO arrangements under ‘allocate as nominate with OBA’  National Grid NTS to liaise with Ofgem before issuing Notice to Users of intent to de-designate, with briefing note - via Joint Office  National Grid NTS to ensure Notice period is sufficient (issued by Sept 2014) to enable changes by Users and Agents to their own agreements

14 14 Indicative timeline TaskTimeline Negotiate terms with adjacent TSOs to facilitate OBAs Qtr 2 – Qtr EU Workgroup discussionsMay – June 2014 UNC Mod raisedQtr UNC Mod developmentQtr – early Qtr (subject to revised comitology dates) Liaison with Ofgem re IP allocation agents Qtr Notification of de-designation of allocation agents and briefing note sent to Users via Joint Office Qtr

15 15 Summary and next steps  National Grid NTS considers that an OBA allocation regime will be required at all three IPs  Changes will be required both to the Interconnection Agreements and UNC  We propose to engage in parallel with our adjacent TSOs and GB shippers to agree the OBA design  Interactions with other aspects of the GB regime will also be explored (e.g. constraint management, meter reconciliation)  Progress update to be shared at the June European Workgroup meeting

16 Tariff Code & Incremental Capacity Amendment

17 17 European Network Code Development Process Work programme ENTSOAgency Framework guidelines Commission Preparation of draft Network Code Commission Agency Comitology Legally binding Network Code Commission Stakeholder workshops Consultation Stakeholder Consultation & workshops DECC GB Code Change process ENTSOEU CommissionACER (ERGEG/CEER) Stakeholder Consultation We are here

18 EU Tariff Code update  ENTSOG Stakeholder Joints Working Sessions now complete  ENTSOG now developing draft Code based on ACER FG and taking account of stakeholder feedback received during SJWS process  Code based on published Business Rules  WORKSHOPS WORKSHOPS  Draft TAR NC due for approval within ENTSOG’s internal governance process by mid-May  Draft Code and supporting document published end May  Public Consultation on the draft TAR NC will take place from the end of May to the end of July  Next Stakeholder Workshop – 25 th June

19 19 Structure of the Draft TAR NC Recitals General Provisions Chapter 1 Subject matter Scope Definitions Cost Allocation Methodologies Chapter 2 Link to transmission revenue Inputs Entry/exit split Selection and approval process/criteria Cost allocation methodologies Secondary Adjustments Cost allocation test Storage

20 20 Publication Requirements Chapter 3 Aims of information publication What to publish How to publish Publication of information for multiple TSOs Tariff setting year Publication notice period Reserve Prices Chapter 4 Firm standard capacity product pricing (multipliers and seasonal factors) Interruptible capacity pricing (uni- and bi-directional interruptible capacity) Revenue Reconciliation Chapter 5 Aims of revenue reconciliation Under/over revenue recovery Regulatory account Reconciliation of the regulatory account Structure of the Draft TAR NC

21 21 CAM Related Topics Chapter 6 VIP pricing Bundles capacity pricing Payable Price Incremental and New Capacity Chapter 7 Publication requirements Economic test Determination of the price Final and Transitional Provisions Chapter 8 Mitigating Measures Entry into force Structure of the Draft TAR NC

22 EU Tariff Code update - issues  Fixed Price vs Floating price at IPs  ACER clearly states only Floating is allowed (i.e. the price paid at time of use will not be the same as price allocated in auction)  Strong shipper feedback to retain option of allowing fixed price – especially for incremental capacity.  Initial Draft Code from ENTSOG likely to allow both Fixed & Floating  Shorthaul at IPs at risk due to loss of commodity charge at IPs  NG working with ENTSOG to preserve this product  Mitigation measures: shippers pushing for one-off reset of long-term capacity contracts when Code comes into effect (i.e. right to cancel contracts due to application of different pricing methodology)  NG has requested ENTSOG legal team to see if Tariff Code can legally include provisions to allow this option.  Standardisation of Gas Tariff Year (1 Jan vs 1 Oct)  problems for GB if 1 Jan chosen (would create price volatility) For further information, please contact Colin Hamilton

23 EU Incremental Amendment update  Incremental Amendment to CAM Code will deliver:  A standardised way for market participants to flag appetite for incremental /new capacity  A standardised process to ensure a minimal level of cross border TSO/NRA coordination  A standardised process to establish economic viability of an incremental/new capacity project with local input parameters  An integrated offer of incremental and existing capacity via CAM NC auction process  Principles for Open Season Procedures in case auctions cannot be used  Possibilities to adjust tariff or depreciation rate in case economic viability cannot be established in existing framework

24 EU Incremental Amendment update  Incremental Amendment being develop together with Tariff Code, thus:  ENTSOG Stakeholder Joints Working Sessions now complete  ENTSOG now developing draft Amendment based on ACER Guidance Document and taking account of stakeholder feedback received during SJWS process  Code based on published Business Rules  RULES RULES  Draft INC Amendment due for approval within ENTSOG’s internal governance process by mid-May  Public Consultation on the draft INC amendment will take place from the end of May to the end of July  Next Stakeholder Workshop – 24 th June For further information, please contact Colin Hamilton

25 3. UNC Modification Plans

26 Phase 2 UNC Modifications Potential Timescales EU Network CodeArea of changePanel SubmissionWorkgroup Development UNC Consultation Gas Balancing (BAL)Information ProvisionMarch MonthsQ SMP Buy & SellApril MonthsQ Nomination Process at IP’sApril MonthsQ Capacity Allocation (CAM) CAM / CMP Compliant Capacity Auctions Q MonthsQ Interoperability & Data Exchange (INT) OBAs / allocationsQ MonthsQ Interconnection Agreements/Contract Changes (facilitating Modification ) Q MonthsQ Data ExchangeQ MonthsQ

27 4. Draft Modifications

28 CAM & Bacton Modifications

29 Initial Estimated Timescales CAM & Bacton UNC Modifications 29 Jun14Jul14Aug14 Modification WG development UNC Panel Vote on FMR and submission to Ofgem Modification WG development Nov14 Oct14 Sep14 Ofgem Decision Dec14 EU Workgroup Modification WG Development Modification WG development EU Workgroup Consultation Nov15 Implementation Date May14 Draft CAM Mod shared with EU WG Modification raised at UNC Panel Modification WG Development Finalise WG Report and submit to Panel UNC Panel to review WG report and issue to consultation Feb15Jan15 1 May 15 May 5 Jun 3 Jul 7 Aug 4 Sep 2 Oct Feb 1 st Nov* 20 NOV 18 DEC CAM & Bacton Modifications 6 NOV *W.E.F 1st November 2015

30 CAM UNC Modification Outline  Key features of proposal:  Applicable to European Interconnection points - Bacton (IUK and BBL) and Moffat  An EU set of standard capacity products for both entry and exit (yearly, quarterly, monthly, daily and within day) and cessation of Enduring Annual NTS Exit (Flat) Capacity at IPs  An EU standard capacity auction calendar  EU standard capacity auction designs (Ascending Clock and Uniform Price)  Priority given to cross-border bundling of unsold capacity products  Set aside capacity from longer term auctions for shorter term auctions at IPs  Capacity originally allocated as cross-border bundled capacity can only be resold as bundled capacity on the secondary market

31 CAM UNC Modification Outline  A joint booking platform for the offer and purchase of capacity at interconnection points  Charging arrangements  Transitional arrangements  Adapting pre-existing CMP solutions to apply to CAM products and auction processes where appropriate.

32 32 Bacton UNC Modification Outline  Create new points in Gemini:  Bacton UKCS ASEP  Bacton IP ASEP  Write out to individual Shippers  Ask them to decide where they want their existing Bacton rights post split to be  Principle is to allocate only up to new obligated levels  If aggregate requirements less than obligated, allocate in full  Else second invitation – again allocate in full if below obligated level  Else need to pro-rate back to obligated level (and allocate surplus to ‘other’ point)  Reallocation process to run after March 2015 QSEC is allocated  To be completed by September 2015

33 Initial Draft Timeline for Bacton Reallocation Process Feb 2015 AMSEC auction held FebMarAprMayJunJul AugSepNovOct 2015 Mar 2015 QSEC auction held Mar 2015 QSEC auction allocated Existing UNC processes New processes 10 days after QSEC auction is allocated Invite Users RMT&TSEC and Daily auctions continue for each month Need to suspend RMT&TSEC and Daily auction for Nov at Bacton ASEP First Capacity Reallocation Second Capacity Reallocation if necessary Write out with final reallocations, hold second process if necessary Write out with proposed reallocations, hold second process if necessary CAM implemented Need to stop Capacity Transfers at Bacton once new process begins 33 Inform Shippers of any new charge types or changes to invoices Inform Shippers of new ASEPs by May 2014 (if 12 months’ notice given)

34 CAM & Bacton UNC Modifications - Next Steps  Request referral to a Workgroup for development  Solution detail to be developed as part of workgroup  Legal text will be developed and provided during the development process  Better facilitates objective (g) compliance with EC Regulation  Any questions? 34


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