1. Gas balancing – where next
Gas balancing – where next? ERGEG input to Framework Guidelines on gas balancing
Pamela TAYLOR
Ofgem
17th Madrid Forum
Madrid, 15 January 2010

2. Outline ERGEG previous work on gas balancing
The Third Package and gas balancing
Barriers to market based and cross-border balancing
Issues to be considered
Framework Guidelines: Next steps

3. ERGEG previous work on gas balancing – key principles
Residual role of the TSO
TSO procurement using market mechanisms
Cost-reflective imbalance charges with incentives to balance
Non-discriminatory application of rules
Timely information to shippers
Preference for daily balancing periods
Proxies for flexibility: trading of imbalances, tolerances
TSOs to seek greater harmonisation through action plans
GGPGB implementation report in 2008 showed
low level of compliance

4. Third Energy Package: gas balancing
Balancing rules shall be market-based
TSOs to provide information to users free of charge
Imbalance charges shall be cost-reflective whilst providing appropriate incentives to balance
ENTSO-G will develop a network code for balancing rules based on Framework Guidelines prepared by ACER
Regional Cooperation (including cross-border) of TSOs for integrating their national markets
The Third Package reflects closely the GGPGB principles
What needs to be done now?

5. Barriers to market based and cross-border balancing
Imbalance charges decoupled from costs
Limited size of balancing zones / market areas
TSO procurement of gas through long term contracts
Incompatibility of products for residual balancing
Use of different balancing periods
Lack of access to storage and flexible gas
Lack of access to cross border capacity
ERGEG agrees with many issues identified by KEMA

6. Issues to be considered
How TSOs procure gas?
Auctions, via markets or longer term reserves
Is the TSO procurement non-discriminatory?
How flexibility (storage) is released to the market?
Different amounts of national flexibility
Common approach storage access?
Calculation of imbalance charges?
Based on costs of balancing, common ‘incentives’
Nomination procedures?
Including balancing periods and gas days
Integration of balancing in neighbouring balancing-zones?
What needs to be done to create liquid pan-European short-term markets and to promote cross-border trading?

7. Framework Guidelines: Next steps
Review our policy approach in the light of the Third Package
Informal discussions held with stakeholders in 2009
Policy options and Initial Impact Assessment (IIA)
Consultation document and stakeholder workshop during 2010
Draft Framework Guidelines on Gas Balancing
Expected Autumn 2010

8. Thank you for your attention