CAM PROPOSAL FOR HARMONISATION 16 th IG meeting

1. CAM PROPOSAL FOR HARMONISATION 16th IG meeting Madrid 6th May 2011

2. Index Introduction Proposal

3. 1 Introduction

4. Introduction • In the 15th IG meeting of the S-GRI that took place last 19th October 2010, REN and Enagás were asked to start working in the harmonisation of the Capacity Allocation Mechanisms (CAM) between Portugal and Spain according to what is being discussed in Europe. • The mandate includes two parts: • Detailed description of current CAM in Portugal and Spain. • Proposals for harmonisation. • It should be borne in mind that the FG on CAM only applies to cross-border IPs.

5. 2 Proposal

6. Main principles • PRODUCT • Service duration of a calendar month or a combination of several months up to a maximum of 12 months. • Bundled firm capacity to be sold. This means that: • The corresponding entry and exit firm available capacity at both sides of an IP will be offered and allocated through a single procedure. • Different contracts will be subscribed with each TSO. • The same shipper entity will need to be registered in both countries. • UNITS AND GAS DAY • Capacity will be offered and contracted in kWh/day. • The final goal is to standardise the gas day from 5:00 to 5:00 UTC. However, during an interim period other harmonised gas day, if approved by NRAs, could be implemented. • BOOKING TOOL • The final goal is to develop a common tool in order to organize the allocation procedure. However, during an interim period TSOs might make available other means to ensure coordination.

7. Capacities to be offered • PERIOD • The intention is to hold the initial auction in 2012 in order to allocate capacity from 1st October 2012 to 30th September 2013 (12 months). • CAPACITIES TO BE OFFERED • The capacity figure for this product shall be defined according to the available capacity above existing ToP contracts and or Long Term capacity contracts on both sides of the IP. • The final decision will be made once the Operating Manual currently under revision by REN and Enagás is approved.

8. Allocation methodology (I) • Capacity will be allocated through cleared price auctions. • The reserved price shall incorporate the regulated tariff agreed by the NRAs • Capacity will be available for bidding on multiple months ahead within one bidding window. • Depending on the various capacity needs shippers will be able to place bids either for each month auctioned or only for some of them. However, each month will be allocated independently. Source: ENTSOG

9. Allocation methodology (II) • The bidding window will last 10 working days. During this period shippers will be allowed to submit bids and to withdraw or modify bids previously submitted. • At the end of each day, TSOs will publish the aggregated results of the bidding information. No provisional interim allocation will be performed at the end of each bidding day. • Capacity will be allocated only after the final bidding window closes. Source: ENTSOG

10. Allocation methodology (III) • Each bidder in the auction, bids a price and a quantity. • All bids will be ranked according to the bid-price. Following such ranking, bids are successfully allocated until the cumulated quantity of successful bids reach the available quantity. • The allocation of capacities that are last accepted but exceed the available capacity will be made on pro rata basis.

11. Thank you for your attention!