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Exploring the feasibility of implicit allocation in the gas market

The drafting process of the NRAs' position paper on the feasibility of implicit allocation in the gas market is nearing completion. Stakeholder feedback has highlighted timing concerns, but potential benefits like improved liquidity and lower transaction costs are noted. Coordination issues may be resolved once CAM/CMP systems are operational. The paper emphasizes the importance of tailored approaches and gradual implementation steps. Implicit allocation is seen as a valuable optimization tool under specific conditions. The NRAs aim to finalize the paper after revisions and RCC approval, followed by public dissemination of consultation responses, evaluation documents, and the final position paper.

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Exploring the feasibility of implicit allocation in the gas market

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  1. Exploring the feasibility of implicit allocation in the gas market NMa IG meeting TITRE 04/04/2013

  2. The drafting process of the position paper of NRAs within GRI NW on the feasibility of implicit allocation is in its final stages Process so far

  3. The consultation signalled that stakeholders consider the timing not right to determine the feasibility of implicit allocation CAM /CMP will improve allocation and use of capacity and will (likely) raise liquidity, lower transaction costs... .. thus asses added value once CAM/CMP are up and running .. now focus on development/ implementation of new rules • Implicit allocation is useful arbitrage instrument if price difference is sufficient • Implicit allocation can raise liquidity/ lower transaction costs, improve use of capacity • No coordination problem exists or is likely to exist once CAM/CMP are in full swing • Gas fired plant is back up for renewables (no sourcing short term cross-border) • Avoid a “one size fits all” approach

  4. NRAs conclusion at SG meeting: CAM and CMP should be up and running before deciding whether implicit allocation should be default • CAM and CMP can indeed solve issues related to allocation and use of capacity, thus no full scale implementation until effects are fully known • But: implicit allocation can have added value under certain conditions: e.g. sufficient price differences and FAPDs, severe congestion • NRAs will identify these conditions in the final position paper. If met, implicit allocation (via pilot) should ideally be explored on that border • NRAs are not sure that no coordination problem will exist for Within Day once profiled booking is full swing, time should tell • NRAs believe that under the right circumstances (to be identified) implicit allocation can serve as an optimization tool for gas fired plants

  5. Following the RCC meeting ACM will revise the position paper and (following RCC approval) will publish the position paper 9 April 4 April 16 April 18 April 21 April Publication position paper/ EoC Revised position paper RCC meeting Announcement position paper at Madrid Forum Feedback of RCC on position paper/ EoC

  6. NRAs within GRI NW will publish three types of document on the GRI NW part on the ACER website once position paper is finalized Consultation responses • Public consultation responses and minutes of workshop Evaluation of comments • Document explains stakeholder feedback per consultation question and how NRAs within GRI NW treat response Final position paper • Document explains final view of NRAs within GRI NW on feasibility of implicit allocation (based upon EoC)

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