balancing workstream

Bonn Workshops8 and 9 Feb. 2007

Balancing workstream

2 GRI – NWBonn Workshops, 8 and 9 Feb. 2007

General remarks & conclusions

• The was general discussion about the problems experienced within gas balancing mechanisms

• Importance of transparency within & between gas balancing regimes was highlighted

• Some issues of interaction between regimes were identified but it was pointed out that more work is needed to better understand what the problems are


Way forward / actions

• Development of information templates for gas balancing in consultation with stakeholders to improve transparency and therefore ability to manage risk within/across balancing mechanisms (3 “pilots” – with wider roll out if successful)

• Development of 2 case studies on gas balancing interactions – to explore in more detail the interactions between balancing mechanisms (one could be Dutch/German to link with day ahead auction work)

• Workstream on “blue-sky thinking” on balancing to look at issues not captured elsewhere to try and improve gas balancing mechanisms – some possible e.g’s:

• Use OBAs

• Use of TSO storage

• Impact of unmetered sites


Who & when

1 week for all to respond to way forward & volunteer for Enabler Group

Initial outline information templates for 3 pilots: Who: Market operators. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise.

Initial report on case studies: Who: Enabler Group. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise with recommendations.

Initial terms of reference on „blue-sky thinking“: Who: Enabler Group. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise.


Transparency workstream


General remarks & conclusions

• The workstream discussed the issues raised in the facilitation paper and data appendix

• There was a recognition that transparency needs to be improved across all areas

• There was a recognition that the less than 3 rule needs to be looked at (application, data aggregation and role of regulators)

• There was a recognition that there are areas of best practice that we could learn from and potentially apply on a wider basis

• There was recognition that there is potentially inconsistency in capacity data but that ERGEG should take this forward as part of their existing Task Force

• Need to focus on regional issues and ensure coordination/consistency with EU level initiatives



• Development of Action Plans to help meet the issues raised by respondents to the questionnaires to improve the level of transparency

• What/scope/frequency of information

• Timeline for making changes etc

• Assessment of any reasonable costs

• Potential quick wins

• Consultation with stakeholders

• Identify implementation and monitoring process

• Rule of 3:• Possibility publishing aggregated data

• Development of code of practice/guidelines for better application of rule of 3

• Best practice• An inventory of best practice that could be “rolled out” on a wider basis


Who & when

1 week for all to respond to way forward & volunteer for Enabler Group

Action Plan: Who: Market operators. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise.

Less than 3: Who: Enabler Group. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise.

Best practice: Who: Enabler Group. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise.


Regulatory co-ordination


Conclusions (1)

A code of practice for regulators in the NW region should be developed

The code should include General principles (timely, transparent, etc)

Checklist/issue list of market arrangements on which co-ordination should take place

Goal of the co-ordination is the allignment of processes (e.g. timing of open seasons)


General remarks

Cross-border user forum of all participants should be consulted on cross-border issues

Align regulatory co-ordination with national processes and responsibilities, where necessary include governments, users, operators

Process of developing regulatory co-ordination should be broadened to include governments as they often have regulatory powers - RGI is the right forum to do this


Way forward

Conclusion paper in March, Highlight where issues are being dealt with

Highlight practical difficulties (regulatory powers, role of government)

Code of Practice draft in March (including how co-ordination between regulators can take place in practice)

Documents for discussion at April workshop


Hub Liquidity


Hub liquidity and efficient transmission and trade of gas between hubs

Remarks:

• capacity release,

• main focus on framework (access, rules),

• large zones with volume based tariffs with no need for capacity booking inside the zone

• With possible merger of e.g. Danish and German hubs by further harmonisation of rules (balancing and access to capacity)

• only benefical with large markets if enough capacity and few balacing zones,

• Gas quality at specific hubs (Zeebrügge)

• standardize balancing (daily vs. hourly) and products, reasonable imbalances cost if not market based, grid company and TSO should work together to make trading of imbalances possible

• all liquidity need to be centered at the hubs


Conclusions

• The barriers mentioned in answers of questionnaires are found to be the central barriers

• Balancing and gas quality also seems to be main barriers

• All hubs are inflicted with problems

Timing:

• Deadline for comments 28 February.

• Conclusion paper in March


Interconnections and primary capacity market


Conclusions

• Way forward should focus on the details at specific interconnection points

• Assessment of the situation at specific IP requires an improved data basis (Solution: publishing of (aggregated) data, provide data to NRAs)

• Investment important issue where contractual (?) and physical congestions occur; efficient CMP for contractually congested IP.

• Better coordination of capacity products and booking procedures

• Inter-TSO and inter-NRA coordination

• Interconnection points: all the IP proposed in the slides plus Ellund, Zelzate; shippers are encouraged to give their priorities

• No objections on the time schedule proposed



•

•

•

•

•

•

•

responsibility deadline deliverable

Comments by stakeholders on selection of IPs to be worked on primarily

CRE / BNetzA February 23 List of IPs

Comments by stakeholder on priorities for each of the selected points

CRE / BNetzA February 23 List of IPs and related priorities

Comments from stakeholders on the report CRE February 28 ReportSubmit missing data to CRE / BNetzA (esp. utillisation rates)

TSOs / NRAs February 28 Data

Draft implementation plan containing issues to be solved at each selected IP

CRE / BNetzA March 1 Implementation plan

Final report March 9(Workshops on the implementation plan) CRE (April 16 / 17)(Approval on implementation plan (RCC) (May 2)Implementation phase

Meetings by adjacents TSOs (NRAs and further stakeholders if necessary)

TSOs


Interconnections and secondary capacity market


Directionof flow

0%

<10

%

Overall Indication for the

IPs considered

Availability

Contractual congestion is shown at primary capacity workshop

Availability of firm capacity in 2005:


Conclusions

• Contractual congestion is shown, now how we can re-allocate (if available) underutilised capacity?

• Secondary market is not a means to its end but it helps• Design variables: pro, con identified

• Hot issues shown: e.g. Facilitation party, need for long term commitment, need for long and short term products

• Tomorrow we go on that at Day Ahead Auction WS

• Other congestion management ideas need to be assessed as solution in parallel:• Positive incentives

• E.g. Clarity on investments in future (no point for hoarding), more transparency

• Negative• E.g. Study on improving FIRM UIOLI and ideas like releasable capacity

• Follow-up needs to allow for more comments



•

•

•

•

•

•

•

responsibility deadline deliverable

Additional comments by stakeholders on conclusions and report

EG February 28 Input for Implementation Plan

Draft implementation plan containing issues to be solved

EG March 1 Implementation plan

(RCC discussion) RCC March 7(Workshops on the implementation plan) EG (April 23 / 24)(Approval on implementation plan) (RCC) (May 2)Implementation phase

Meetings by (adjacents) TSOs (NRAs and further stakeholders if necessary)

Operators, other?


Day ahead capacity auctions


General remarks

• EFET and operator proposals were discussed

• Compliance with existing legal, regulatory and contractual requirements

• Highly actual information on contractual data, nominated data and flow data and other information to be further defined are necessary to assess e.g. level of interruption risk

• Wish to have firm (priority !) and interruptible capacity auctioned; process needs to be clear; recycling of capacities is needed

• Offer of APX to organise auction on product to be defined by the market (“design variables”)

• Pilot project

• Review of pilot required; may lead to re-design

• DTe offers monthly meeting in Den Haag to discuss

• GRTgaz offers to work on additional cross border points

• If not TSO platform, tender should be conducted

• Commitment on start date and duration of pilot


Conclusions

• Appreciation of the urgent need to act

• Various views on type of product but majority supports combination of secondary and interruptible primary

• Clear message by Operators that trading could start at latest on 1 April 2008

• Clear message that market wants to start as soon as possible

• Commitment to contribute to work plan by

• EFET and

• Operators and

• Key stakeholders



• Meetings/telephone conferences

• Monthly Jour Fixe:• Operators at IPs

• EFET

• Platform operators

• DTe and possibly BNetzA and DERA

• Updates on process by DTe to Stakeholders and opportunity to comment

• Presentation of renewed proposal on workshops in April