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Capacity Allocation and Congestion Management Rules for Storage Mr. Walter Boltz ERGEG’s Gas Focus Group (GFG) XV Madrid Forum, 6 and 7 November 2008 Background Improvement of storage access conditions Most European storages fully booked Poor transparency Entry barrier for new entrants Capacity hoarding What happened? ERGEG GGPSSO since March 2005 After Monitoring the GGPSSO twice incomplete implementation identified Development of specific Guidelines for storage on CAM and CMP ERGEG Work Programme 2008: enhancement of these guidelines ERGEG GST TF 2008 Survey on CAM/CMP and Secondary Markets Questioning of NRAs, SSOs and storage users Current way of development, design, acutal use and effects of the system regarding CAM/CMP and Secondary Markets XV Madrid Forum, 6 and 7 November 2008 2 Response Rate to Questionnaires Response rate NRAs: 67% 12 NRAs out of 18 ERGEG member states with storage capacity Response rate SSOs: 56% 29 SSOs (18 GSE and 11 non GSE members) out of 52 SSOs addresses most answers lacking from German SSOs (but 65% of the wgv in Germany covered) 64% of the wgv of EU member states covered Response rate storage users: 17% 30 responses (Wholesaler, Trader, regional companies) out of 186 company addresses Little response from Industrial costumers and Distribution companies XV Madrid Forum, 6 and 7 November 2008 3 Applied CAM - Answers SSOs Developing CAM For 80% of SSOs the main customers are affiliated companies SSOs report to consult with customers (but mainly affiliates) For 27% of countries (NRA answers) no legal requirements for CAM No specific legal requirements on the design of CAM XV Madrid Forum, 6 and 7 November 2008 4 Preferred CAM - Answers Storage Users (to 75% integrated with SSOs) XV Madrid Forum, 6 and 7 November 2008 5 First come first served On average 49% of the capacity is booked by affiliates with FCFS 80% of capacity is booked out by affiliates On average the refusal rate was 24% Applying FCFS the refusal rate was 34% compared to 0% regarding CGWC On average 20% of the capacity is locked in contracts longer than 5 years Applying FCFS 68% is locked in contracts longer than 5 years Preliminary conclusions FCFS applied by an integrated SSO prefers the affiliate Does FCFS treat new entrants and incumbents equal? XV Madrid Forum, 6 and 7 November 2008 6 Capacity goes with the costumer (CGWC) Effective, because no refusals of capacity requests On average 38% of the SSOs have available capacity in 2009 With CGWC 100% of SSOs have available capacity in 2009 Preliminary conclusions The capacity allocation has to take into account the flexibility already available in the portfolio of a shipper Does CGWC treat new entrants and incumbents equal? Enough capacity for other storage purposes has to be assured On average 62% of the SSOs also offer unbundled firm products With CGWC 33% of the SSOs offer unbundled firm products XV Madrid Forum, 6 and 7 November 2008 7 Applied CMP (contractual congestion) - Answers SSOs As CMPs are applied in different combinations, it is not possible to give the corresponding wgv Developing CMP in case of 67% there are no special legal requirements for CMP therefore in most cases no regulatory intervention in case of discriminatory behaviour possible XV Madrid Forum, 6 and 7 November 2008 8 Preferred CMP by storage users XV Madrid Forum, 6 and 7 November 2008 9 Secondary Markets 36% of NRAs – requirements on a legal basis for a common trading platform (only a small number has to place ALL trades) in 64% development of a common platform voluntarily BUT users trade among themselves, SSOs do not get any information have to be facilitated to optimize the use of capacity - incentives for storage users to use bulletin boards appropriate legal measures obligation for SSOs to improve and enhance the platform according to consumers/market needs XV Madrid Forum, 6 and 7 November 2008 10 CMP – Key questions Definition of a congestion management procedure: (1) First step: making capacity available (2) Second step: reallocation How effective are the CMP regarding capacity release as some CMP still lacking the practical test? How capacity, traded on “secondary market”, is really made available and transparent ? Are “interruptibles” equal to other CMP? How can a practicable UIOLI be designed in the storage market? XV Madrid Forum, 6 and 7 November 2008 11 Preliminary conclusions CAM/CMP applied by integrated SSOs shall be designed in a non-discriminatory way and shall facilitate competition FCFS applied by integrated SSOs prefers the affiliate Obligation for storage users to facilitate trades on secondary markets are needed How can “unused capacity” in case of UIOLI be defined? In some countries a preferential CAM to affiliates takes place XV Madrid Forum, 6 and 7 November 2008 12 Next steps Assessment of different CAM and CMP in a discussion paper for public consultation planned by defining preconditions under which market situations the various mechanisms are appropriate regarding the requirements for CAM and CMP stated in the GGPSSO Based on assessment and the outcomes of the public consultation GGP on CAM & CMP to storage will be drafted XV Madrid Forum, 6 and 7 November 2008 13 Thank You ! Further information is available at www.energy-regulators.eu XV Madrid Forum, 6 and 7 November 2008 14