erik sleutjes (ofgem) gri nw government meeting the hague, 6 may 2010 pilot framework guideline on...
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Erik Sleutjes (Ofgem)
GRI NW Government Meeting
The Hague, 6 May 2010
Pilot framework guideline on gas balancing – ERGEG initial steps
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2GRI NW Government Meeting, The Hague, 6 May 2010
Overview
• What is gas balancing?
• What are the requirements of the Gas Regulation for gas balancing?
• What are the key issues?
• What has been the process to date?
• What are the next steps?
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3GRI NW Government Meeting, The Hague, 6 May 2010
What is gas balancing?
• Each shipper balances its portfolio (inputs and off-takes)
• TSOs address the “residual” imbalances
• TSOs also take actions for system reasons which are unrelated to shippers’ imbalances
The overall amount of gas put onto a transportation system needs to match the amount of gas taken off the system
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4GRI NW Government Meeting, The Hague, 6 May 2010
Requirements of Gas Regulation (715/2009)
Article 21: Balancing rules & imbalances charges
• Balancing rules shall be fair, non-discriminatory, transparent, market-based and reflect genuine system needs
• TSOs shall provide information on balancing status of users • Imbalance charges shall be cost-reflective & provide incentives on users to balance
their inputs and off-takes• Member States to ensure that TSOs endeavour to harmonise balancing regimes to
facilitate gas trade
Article 8.6(j): Network codes shall cover the following areas• balancing rules (including nomination procedures)• rules for imbalance charges• rules for operational balancing between systems
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5GRI NW Government Meeting, The Hague, 6 May 2010
Key issues (for consultation)
• Shippers have limited access to flexibility (required to balance their portfolios)
• TSOs’ limited use of market based procurement of residual balancing gas/products
• High imbalance charges hamper new entry vs. low imbalance charges do not incentivise shipper balancing
• Shippers have insufficient information to balance their portfolios
• Fragmentation of balancing zones; different balancing periods and gas days
Questions for consultation include: What should be the scope and objectives of the gas balancing framework guidelines? To what degree do balancing regimes need to be harmonised to achieve these objectives?
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6GRI NW Government Meeting, The Hague, 6 May 2010
Process to date & next steps
• January 2010 Madrid Forum: ERGEG to start process of preparing a pilot framework guideline for gas balancing
• ERGEG is preparing for public consultation (‘Pilot Framework Guideline & Initial Impact Assessment’) – planned for summer 2010:• problem identification• policy objectives for balancing framework guidelines• policy options for balancing rules & imbalance charges
• ERGEG discussions of pilot framework guideline with:• ad-hoc expert group on gas balancing (Chatham House rules)• ENTSOG (in preparation for pilot network code)
• ERGEG presentation at September 2010 Madrid Forum
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7GRI NW Government Meeting, The Hague, 6 May 2010
Thank you!