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Madrid, 1st April 2008

5th SG Meeting South Gas Regional Initiative. Madrid, 1st April 2008. 5th SG meeting S-GRI- Agenda. II. High level meeting with EC in February Feedback by regulators. Meeting on the South-West Europe gas and electricity regional markets

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Madrid, 1st April 2008

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  1. 5th SG Meeting South Gas Regional Initiative Madrid, 1st April 2008

  2. 5th SG meeting S-GRI- Agenda

  3. II. High level meeting with EC in February Feedback by regulators • Meeting on the South-West Europe gas and electricity regional markets • It took place on 19 February 2008 in Madrid and was the 2nd such meeting (first one took place in June 2007). It was chaired by EC, attended by governments, national regulators, TSOs, power exchanges • Main focus was on electricity, but gas also got some attention. Main conclusions for gas: • Gas interconnections : “despite revisions to the regional investment plans, welcome progress has been made on the design of coordinated, transparent and non-discriminatory cross-border allocation mechanisms” • Market integration : • “Work is progressing with regard to MIBGAS” • “Implementation of Common Business Practices is being analysed” • “Participants of the MIBGAS and North West regional initiative should ensure that they develop in a compatible way” • “The development of hubs would contribute heplfully to the liquidity of the market” • Meetings of the high level group will continue to be held approximatively every six months.

  4. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps-presentation by regulators • ROAD COVERED: • Last SG (4th meeting) on 29th October 2007 • TSOs’ groups working on elaboration of a proposal of OSP and OS for French-Spanish new interconnection capacities • Work on OSP developed up today: • 5th IG meeting on 30th Nov 2007 • TSOs presented a proposal of OSP for Larrau interconnection • Main comments from participants: capacities reserved for LT/ST, maximum period for the offered capacity, competition safeguards and the need for same treatment for Irún interconnection • TSOs would rewrite the proposal including agreements reached in the meeting. TSOs’ proposal would be reviewed by Regulators

  5. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps-presentation by regulators • ROAD COVERED (cont.): • Work on OSP developed up today (cont.): • Allocation of capacity in France: GRTgaz North-GRTgaz South and GRTgaz South -TIGF through OSP launched in December 2007 • 6th IG meeting on 11th Feb 2008 • TSOs’ OSP proposal, once amended by Regulators, was presented • Some OSP points still to be defined: capacity values and dates, LT contracts duration (4/10 years) and LT allocation rules. • After the meeting • TSOs to send comments on discussion points before 19th Feb 2008 • Regulators reviewed and finished the OSP

  6. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps-presentation by regulators • ROAD COVERED (cont.): • Progress on the Spanish side: • Modification of RD 949/2001 which introduces the possibility of developing different CAMs to “FCFS” at international connections in December 2007 • Development of a Ministerial Order which describes the procedure to allocate available current and future capacity at French-Spanish capacities up to 2013. A proposal has been elaborated by CNE and sent for consultation of the Consultative Council of Hydrocarbons • Next planned step is the Ministerial Order approval by the Ministry • Could be possible nowadays not to contact capacity from April 2009 ahead?

  7. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps-presentation by regulators • REGULATORS OSP PROPOSAL • MAIN CHARACTERISTICS • Procedure to be developed in May-June 2008 to allocate available capacity at French-Spanish interconnections from 1st April 2009 to 31st March 2013 (4 years) • 80% of available capacity for LTC (more than 1 year) and 20% of available capacity for STC (1 year or less) • Short term capacities, corresponding to 20% of the total offered capacity, will be sold yearly, in later OSPs, performed a year before the services’ starting day.The OSP for the LTC will only be organised once

  8. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps-presentation by regulators Provisional conversion factor of: 1 Mm3(n)/day = 11,6264 GWh/day has been considered in the table above. *From December 2012, capacity in the ENAGAS to TIGF direction will move up to 165 GWh/d, which would increase the common value to 110/100 GWh/d. However, because its starting date is so far off, this capacity will be marketed during a subsequent OSP. ** and *** Short term capacities will be sold yearly, in later OSPs, performed a year before their starting day

  9. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps-presentation by regulators • REGULATORS OSP PROPOSAL (cont.) • MAIN CHARACTERISTICS (cont.) • Allocation in 2 phases, with possibility of withdrawing any or all the requests if capacity assigned in the first phase is not convenient • After the OSP, the remaining capacities, if any, will be allocated under the standard procedures in place in each system • Further interruptible or conditional capacities might be offered by each TSO according to their own rules, once the OSP has been completed • The terms and conditions applicable to the capacities sold under the OSP will not differ from the rules prevailing in each system at any particular time, unless otherwise stated

  10. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps-presentation by regulators • REGULATORS OSP PROPOSAL (cont.) • MAIN CHARACTERISTICS (cont.) • Allocation rules: • Priority will be given to requests which are matched on both sides of the border, and according to the period required for the service: • Long term capacities: • first priority for 4 years period requests • second priority for multiannual requests (n consecutive seasons, with n>2) • third priority for multiseasonal requests (n consecutive winters or summers, with n>2) • Sort term capacities: • first priority for 1 year period requests • second priority for 1 season period requests • third priority for less than 1 season period requests • Within the same level of priority, capacity will be allocated on a pro-rata basis, season by season/month by month, taking into account the volumes requested

  11. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps-presentation by TSOs • QUESTIONS ON OPEN SUSCRIPTION PROCEDURE: • Should all the LT capacity be contracted at the same OSP? • Should ST and LT capacities be sold at the same OSP? • Appropriate advance to sell ST capacity? • Should the OSP be extended to cover 4 years for the last starting LT capacity (from Spain to France)?

  12. III. PRIORITY 1. Interconnections III.1.1 OSP developed by IG and future steps • CONCLUSIONS on OSP • Stakeholders have concerns about the persistent lack of capacity in the next future • OSP is the appropriate mechanism to allocate capacity when it is scarce resource • All existing Spanish-French interconnection will be treated in the same way • OSP in France/Spain will be coordinated as much as possible • General agreement to contract capacity at French-Spanish interconnections for the period starting April 2009 ahead in both senses (Spain to France and vice versa) only through the OSP • Current forecasted date of infrastructures will be taken into consideration to define the capacity to be allocated through the OSP. If delays occurs, tariffs will not be invoiced • A final OSP proposal will be elaborated by TSOs and sent to regulators in one week. Regulators will publish the OSP on ERGEG webpage. Once published, Stakeholder will have 10 days to send comments on the proposal to Regulators.

  13. III. PRIORITY 1. Interconnections III.1.2 TSOs’ OS proposal • LAST IG AGREEMENT ON OPEN SEASON(6th IG minutes): • Detailed agendas and procedures for the Western and Eastern corridors would be presented by TSOs in the next meeting • The need to coordinate Open Seasons for Western and Eastern corridors and for North-South GRTGaz capacities would have to be taken into account • The goal was to prepare an information memorandum on OS during 1S 2008 which would be released to the public, after the completion of the OSP for near-term Larrau capacities

  14. III. PRIORITY 1. Interconnections III.1.2 TSOs’ OS proposal • QUESTIONS ON OS MECHANISMS: • Differences between OSP and OS • Grade of shippers’ commitment in a OS • Future OSP and OS foreseen in France and/or Spain: • Capacities and infrastructures affected • TSOs involved • Schedule • Relationship with Spanish-France interconnection capacities or gas transmission from the Peninsula to the North of France and vice versa

  15. III. PRIORITY 1. Interconnections III.1.2 TSOs’ OS proposal • CONCLUSIONS on OS • GRT gas will do its best efforts to coordinate the OS inside France with the rest of the OS in Spain/France, under the supervision of the CRE. • TSOs will present the detailed OS procedure in the next SG meeting, to be held in May 21st. This will include: • Detailed agenda on the process • Preliminary capacities and date of operation proposed • Available capacity on the current infrastructure forecasted • What is the binding compromise the shippers should reach? • When the decision to build and on what grounds will be taken?

  16. III. PRIORITY 1. Interconnections III.2 Portuguese-Spanish interconnection capacity study up to 2015 • CONCLUSIONS • Stakeholders welcome TSOs’ Portugal-Spain study on interconnection capacities up to 2015 • Study performed by TSOs shows no need for further interconnection capacity between Portugal and Spain up to 2015

  17. IV. PRIORITY 2. InteroperabilityCBPs implementation-presentation by regulators • CBPs implementation in Spain • Harmonization of Units • Harmonization of the Nomination and Matching Process • Rest of the CBPs already harmonized • Specific working group has been created in the framework of the Group for Network Code Modification, in order to deal with CBPs implementation into Spanish Network Code. Last meeting hold on 28th February.

  18. IV. PRIORITY 2. InteroperabilityCBPs implementation-presentation by regulators • Harmonization of Units • CURRENTLY GCV with combustion reference temperature of 0ºC • CBPs GCV with combustion reference temperature of 25ºC: • Assessment of the change:energy measured decreases 0,26% • Affected areas: • Energy measured at loading and unloading ships SHIPPERS • Retribution depending on the gas regasificated/distributed • INFRASTRUCTURE OPERATORS • TPA tariffs, since less energy will be consumed • Measures procedures • Energy measurement at interconnection with non European countries • Technical changes not significantly important

  19. IV. PRIORITY 2. InteroperabilityCBPs implementation-presentation by regulators • Harmonization of Units (cont.) • Network code and protocols to be revised: • NGTS-05: measure (Ministerial Order) • PD-01: measure (Resolution) • PD-05: Procedure to calculate energy unloaded from ships (Resolution)

  20. IV. PRIORITY 2. InteroperabilityCBPs implementation-presentation by regulators • Harmonization of the Nomination and Matching Process • CURRENTLY Gas day from 00:00 to 00:00 • CBPs Gas day from 06:00 to 06:00 • Harmonization of process also required • Affected areas: • Software of communication and planning equipments • SL-ATR (logistic IT) • Operation protocols • Measures procedures • Interconnections with non European countries (Tarifa interconnection, Medgaz) • Combine cycles and other clients with regard to maximum consumption, tariffs

  21. IV. PRIORITY 2. InteroperabilityCBPs implementation-presentation by regulators • Harmonization of the Nomination and Matching Process (cont.) • Network code and protocols to be revised: • NGTS-04: Nomination (Ministerial Order) • NGTS-06: Matching (Ministerial Order) • NGTS-07: Balancing (Ministerial Order) • PD-01: Measure (Resolution) • PD-05: Procedure to calculate energy unloaded from ships (Resolution) • PD-07 and PD-08: planning and nomination of transmission and distribution facilities (Resolution) • Future PD-11: Nomination for satellite plants belonging to the consumer (Resolution)

  22. IV. PRIORITY 2. InteroperabilityCBPs implementation • QUESTIONS ON CBPS IMPLEMENTATION: • Status of CBP on harmonization of units in France and Portugal: • Infrastructures where the CBP has been implemented • Grade of implementation • Agents affected • Advantages and inconveniences • Status of CBP on harmonization of nomination and matching process in France and Portugal: • Grade of development • Relationship with electricity pool • Advantages and inconveniences

  23. IV. PRIORITY 2. InteroperabilityCBPs implementation • CONCLUSIONS • The SG welcome the information provided for EASSE-gas • In the next SG the most important CBPs will be presented • In order to evaluate the CBPs possibilities of implementation, TSOs will coordinate in advance to the SG meeting, together with EASEE-gas

  24. V. Stakeholders point of viewMain concerns/priorities for the future • CONCLUSIONS • Cooperation among TSO has been very good even if the outcomes are not yet enough • Interconnection capacity is needed, as soon as possible and in a coordinated way • The Open Season process should be developed as soon as possible • SoS is important for the Region • Third package implementation is crucial for the development of the competition in the Region • Coordination among stakeholders in the initiative is also important • In the last two years of the Initiative progress is very limited regarding the interconnection improvement, but the harmonization of rules is progressing, specially the transparency

  25. VI. Next meetings • Next IG meeting: to be defined • Next SG meeting: 21st May 2008

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