Lessons from open seasons between France and Spain Regulator’s perspective Benoît Esnault Commission de Régulation de l’Energie (CRE) North West region - IG meeting Den Haag, September 21, 2010

2 Economic test and capacity allocation in open seasons Capacity offer –Estimation of shippers’ needs (non binding phase) –Different steps Allocation –Below X%, No investment –Between X and 100%: capacity requests allocated –Above 100%: pro-rata until X% of next step

3 OS between France and Spain A complex design OS 2013 –2 steps of development (Larrau and Biriatou) –5 IPs with allocations in 2 directions –Economic test: only at the border between France and Spain, focus on the level of allocation OS 2015 –2 steps of development at the border (Perthus and Biriatou) –Investment decisions in France (artère du Midi, artère du Rhône) –6 IPs with allocations in 2 directions –3 possible physical development scenarios for MidCat (MC0, MC1 and MC2), –2 possible physical development scenarios for Biriatou (B0 and B1), –4 feasible combinations between them (MC2+B1, MC2+B0, MC1+B0, and MC0+B0).

4 Issues related to capacity allocation Defining investment triggers leads to complex decisions –2013: Biriatou not realised in spite of high capacity requests from ES to FR –2015: Decision to invest if all the capacity is allocated in 1 direction only ("worst case") –2015: several steps of development and 6 possible levels of tariffs Towards a kind of long term auctions 2013 Biriatou not built

5 Lessons from the past procedures (1/2) Efforts to comply with GGPOS –Information memorandum –Non binding phase (2015) –Information on tariffs Difficulties –Providing full visibility on tariffs and market organization was impossible –Design of the “economic test” to decide on the investment –Synchronized allocation along “corridors” requested by Spanish shippers Addressing the political dimension (security of supply) is necessary from the beginning

6 Lessons from the past procedures (2/2) Uncertainty of the outcome –In spite of imperfection of procedures, high binding capacity requests in 2013 from Spain to France, but application of the economic test  Biriatou not agreed –But economic crisis led to insufficient requests in the 2015 OS  Midcat rejected and Biriatou agreed Key role of GRI South in coordination –Many meetings and information of the market –Good cooperation among 4 TSOs, NRAs and support from governments Experience = key for properly designing procedures Complexity grows rapidly with the number of IPs at stake

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