1. Gas Regional Initiative – North West Region London 14 November 2008 Chair: Joachim Gewehr Capacity Project C1 Short-Term Capacity (STC) Initial findings of the questionnaire on short-term firm capacity

2. 2 Capacity Project – C1 Short-Term Capacity (STC) Stakeholders group, London, 14 November 2008 Target GRI North West Roadmap sets out to maximise the use of existing capacity including reserve capacity* through  examination of how unused capacity could be released day- ahead  investigating into whether renomination rules have to be reformed *Spare/reserve capacity refers to that part of the capacity which can not be offered on a long-term basis because of the uncertainty of the parameters used for long-term capacity calculation but could be offered day-ahead. This includes capacity for system integrity and operational requirements.

3. 3 Capacity Project – C1 Short-Term Capacity (STC) Stakeholders group, London, 14 November 2008 Approach 1.Questionnaire to TSOs on reserve capacity that could be released day-ahead and on the use of incentives (done) 2.Report on reserve capacity and incentivisation mechanisms (to be finalised by the end of the year) 3.Initiation of a pilot to implement day-ahead release of firm capacity by TSOs at priority interconnection points (OG proposal: Bunde / Oude Statenzijl and Eynatten)

4. 4 Capacity Project – C1 Short-Term Capacity (STC) Stakeholders group, London, 14 November 2008 10 out of the 20 TSOs addressed responded  A majority of the TSOs’ systems allow shippers to book firm day- ahead capacity.  None of the TSOs has rejected firm capacity requests in spite of having spare/reserve capacity available.  Only 2 TSOs have spare/reserve capacity that cannot be offered on a long term firm basis.  Only 2 TSOs state that this capacity could in principle be offered to the market as firm capacity on a day-ahead basis.  Additional comments by TSOs: spare/reserve capacity can only be offered as interruptible capacity difficult and time-consuming to determine for all days and for all interconnection points whether there is spare/reserve capacity Initial findings from the questionnaires General questions on spare/reserve capacity

5. 5 Capacity Project – C1 Short-Term Capacity (STC) Stakeholders group, London, 14 November 2008 Initial findings from the questionnaires Technical questions  Most TSOs apply static capacity simulation.  At a majority of the interconnection points physical flows do not correspond to nominations.  From a technical point of view possibilities to release short-term capacities seem to exist.

6. 6 Capacity Project – C1 Short-Term Capacity (STC) Stakeholders group, London, 14 November 2008 Initial findings from the questionnaires Incentive related questions  Only one TSO states that the regulatory regime provides incentives for releasing firm day-ahead capacity in the form of a rebate for interruptible capacity.  According to the TSOs none of the regulatory regimes obstruct the release of firm day-ahead capacity.  Considerations for a suitable (incentive) system: Additional revenues, adjusting revenue cap Revenues and respective costs to be exempted from regulation Network codes Sound economical environment created by stable regulatory regime

7. 7 Capacity Project – C1 Short-Term Capacity (STC) Stakeholders group, London, 14 November 2008 Questions on short-term firm capacities  Do shippers desire day ahead firm primary daily capacities and will they make use of it?  What benefits do shippers see with respect to  Efficient use of networks?  Liquidity at hubs?  Competition?  …?  Are there possible disadvantages to the envisaged project?  What incentives could be offered to TSOs (and other market parties) to achieve the best results?