Scribd
Upload
54 views6 pages

EconGas Response - 22022016 PDF

The document discusses potential capacity allocation methods for a proposed open season procedure for booking new or incremental gas transmission capacity on the Romanian-Hungarian border and the Hungarian-Austrian border. It presents three potential methods: 1) Regular yearly capacity auctions using an ascending clock algorithm, 2) Capacity auctions using various algorithms in a sequential design allowing conditional bids across years and interconnection points, and 3) Yearly auctions as in Method 1 but with preliminary non-binding results and the option for bidders to withdraw bids by a predefined date. A questionnaire is provided to gather market feedback on preferences regarding these allocation methods and concepts like conditional bidding and auction algorithms.

Uploaded by

mayalasan1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
54 views6 pages

EconGas Response - 22022016 PDF

The document discusses potential capacity allocation methods for a proposed open season procedure for booking new or incremental gas transmission capacity on the Romanian-Hungarian border and the Hungarian-Austrian border. It presents three potential methods: 1) Regular yearly capacity auctions using an ascending clock algorithm, 2) Capacity auctions using various algorithms in a sequential design allowing conditional bids across years and interconnection points, and 3) Yearly auctions as in Method 1 but with preliminary non-binding results and the option for bidders to withdraw bids by a predefined date. A questionnaire is provided to gather market feedback on preferences regarding these allocation methods and concepts like conditional bidding and auction algorithms.

Uploaded by

mayalasan1
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 6

Capacity Allocation Concepts

in the RO-HU-AT Open Season Procedure


for Public Market Consultation
Dated February 3, 2016

EconGas GmbH

Donau-City-Straße 11

Christoph Rejlek

+43 (0)50205 8410

+43 (0)66488456909

Christoph.rejlek@econgas.com

1. Introduction
Natural gas transmission system operator companies SNTGN Transgaz SA, FGSZ Zrt. and
Gas Connect Austria GmbH consider to jointly conduct a binding open season for the book-
ing of new or incremental cross-border transmission capacity at the Romanian-Hungarian
border and the Hungarian-Austrian border, in both flow directions. The preparatory process is
supported by the respective national regulatory authorities, i.e. ANRE (Romania), HEA (Hun-
gary) and E-Control (Austria). All involved TSOs published the same survey electronically
either via an electronic form or as a downloadable document.

The deadline for the submission of answers is 22 February 2016, 16:00.

2. Scope of the Public Market Consultation


The preparations for the open season procedure have already begun and the above men-
tioned parties wish to survey the market in a non-binding way about the possible ca-
pacity allocation Methods to be applied in the procedure.

Any other details of the possible open season procedure (e.g. exact timing, quantity of
offered capacity, tariffs, legal terms applicable to capacity contracts, financial securities etc.)
are out of the scope of the present Public Market Consultation.

SNTGN Transgaz SA ● FGSZ Ltd ● Gas Connect Austria GmbH Page 1


Capacity Allocation Concepts in the RO-HU-AT Open Season Procedure
for Public Market Consultation
Dated 3 February 2016

3. Potential Capacity Allocation Methods


The parties consider three possible ways (Methods) of capacity allocation, which, in their
assessment, fit into the current European legislative framework.

Participants of the survey are kindly asked to fill in the questionnaire, where general ques-
tions are asked and to evaluate the proposed Methods according to their perceived merits.

For the new capacity, an amount at least equal to 10 % of the technical capacity will be set
aside and offered no earlier than the annual quarterly capacity auction according to Article 8
(8) CAM NC.

For the sake of the example, a 15-years booking period is assumed when describing the
Methods.

3.1. Method No.1


Method No.1. denotes regular yearly capacity auctions using ascending clock auction algo-
rithm as per Regulation 984/2013/EU.

• Offered contractual capacity product: yearly bundled capacity product at each IP in both
directions (1 October-1 October) at Csanápalota (RO>HU) / (HU>RO) and at Mo-
sonmagyaróvár (HU>AT) / (AT>HU).
• Conditional bids: no. Capacity products are offered in independent, single-year products,
where no conditional bids can be made between certain years or across the offered inter-
connection points.
• In total, 60 capacity auctions (1 auction per IP per flow direction per year) are envisaged
to be organised.

3.2. Method No.2


Method No.2. denotes capacity auctions using e.g. ascending clock, uniform price or pay-as-
you bid auction algorithm but a matrix of ex ante conditions are built in, resulting in a se-
quential auction design.

• Offered contractual capacity product: yearly bundled capacity product for 2 IPs, in both
flow directions (1 October-1 October) at Csanápalota (RO>HU) / (HU>RO) and at Mo-
sonmagyaróvár (HU>AT) / (AT>HU).
• Conditional bids: yes. Capacity products are offered in three, subsequent capacity alloca-
tion rounds.
• Allocation round I:
o A single batch made of 15 single-year product is allocated simultaneously for the two
interconnection points. It means that within 1 allocation procedure, all 15 yearly bun-
dled capacity products per flow direction on both interconnection points are allocated.
o In total, 1 capacity auction per flow direction is organised.

SNTGN Transgaz SA ● FGSZ Ltd ● Gas Connect Austria GmbH Page 2


Capacity Allocation Concepts in the RO-HU-AT Open Season Procedure
for Public Market Consultation
Dated 3 February 2016

• Allocation round II:


o Subject to capacity available after allocation round I. In case all of the capacities are
allocated in round I., no more allocation rounds shall be organised.
o Only single-year products are allocated, but simultaneously for the two interconnec-
tion points. It means that within 15 separate allocation procedures, individual yearly
bundled capacity products are allocated within the same procedure on both intercon-
nection points.
o In total, up to 15 capacity auctions per flow direction are organised.
• Allocation round III:
o Subject to capacity available after allocation round II. In case all of the capacities are
allocated in round II, this allocation round shall not take place.
o In total, up to 30 capacity auctions per flow direction are organised.

3.3. Method No.3


• Yearly capacity auctions as described in Method 1 above; i.e.:
• Offered contractual capacity product: yearly bundled capacity product at each IP in both
directions (1 October-1 October) at Csanápalota (RO>HU) / (HU>RO) and at Mo-
sonmagyaróvár (HU>AT) / (AT>HU);
• In total, 60 capacity auctions (1 auction per IP per flow direction per year) are envisaged
to be organised;
• If aggregate demand in one auction is greater than the capacity on offer in this auction;
capacities shall be allocated on the basis of the highest individual bidder commitment in
all auctions conducted throughout the period of 15 years at IP Csanápalota and IP Mo-
sonmagyaróvár;
• All auction results submitted to the system user shall be regarded as preliminary and
non-binding;
• In case that the minimum amount of capacity for the economic viability of project has not
been reached via the application of the allocation mechanism the preliminary and non-
binding bookings shall be cancelled by the TSO;
• Bidders shall receive preliminary results and shall be entitled to step back from their in-
terest documented until a predefined date (final allocation) without the obligation to give
reasons for this decision.

SNTGN Transgaz SA ● FGSZ Ltd ● Gas Connect Austria GmbH Page 3


Capacity Allocation Concepts in the RO-HU-AT Open Season Procedure
for Public Market Consultation
Dated 3 February 2016

4. Questionnaire

4.1. Would you support a possible capacity allocation design other than those de-
scribed in Regulation 984/2013/EU, i.e. ascending clock algorithm or uniform
price algorithm?

NO

If yes, which?

For the allocation of long term capacity products, we support the ascending clock
algorithm. A market-based allocation can however only be guaranteed, if shippers
have a guarantee that the auction round steps are set as low as possible and need to
be consulted upon with shippers. Excessively high round premia would undermine
the nature of the ascending clock algorithm.

4.2. Do you have any preference between auction algorithms, e.g. ascending clock,
uniform price or pay-as-you bid?

☒ Ascending clock algorithm ☐ Uniform price algorithm

☐ Pay-as-bid ☐ I have no preferred auction algorithm

If you have any preference, please state your reason.

Please consider our additional comments under 4.1

4.3. In case of Method No. 2, which batch of single-year products would you prefer,
e.g. 5, and/or 10 and/or 15 years?

☒ 5-year batch ☐ 10-year batch

☐ 15-year batch

4.4. Would you allow conditional bidding during the open season procedure?

YES

SNTGN Transgaz SA ● FGSZ Ltd ● Gas Connect Austria GmbH Page 4


Capacity Allocation Concepts in the RO-HU-AT Open Season Procedure
for Public Market Consultation
Dated 3 February 2016

4.5. If conditional bidding during the open season procedure is allowed, which type
of conditionality would you deem necessary?

Other

If you choose “Other”, please specify:

1) We support the conditionality that shippers who are interested ONLY in both bor-
der points (in one or both directions) must have the chance to be allocated both bun-
dles to the same extent (duration and hourly flow rate), if they request so (“superbun-
dled capacity”). But if requested, shippers should also have the possibility to bid for
single bundled capacity products as well (AT/HU and HU/RO in both directions).
2) We also support a step back clause as suggested in method 3 which allows ship-
pers to revoke their bids. The deadline for shippers to step back should be as late as
possible and has to be consulted before.
3) Shippers need a price guarantee which allows them to terminate the bundled con-
tracts if the regulated tariff at any of the TSOs goes up excessively. Such a provision
is seen in Germany and prevents shippers from being exposed to arbitrary tariff
changes in the upwards direction. The maximum annual tariff increase needs to be
agreed upon by shippers. Shippers having bought the entire route (=both IPs) also
need the right to step out of the entire route if TSO capacity on only one IP tariff goes
up excessively.
4) Shippers with already existing contracts along the envisaged project route must be
given the opportunity to include their exisitng contracts in the bidding process (i.e.
“conditional surrendering”). No interested shipper must be forced to pay twice for
capacity because the allocation mechanism does not allow for flexibility to avoid this.
5) The planned project covers three European countries and thus a plethora of differ-
ent regulations per country applies. Shippers, especially those having purchased the
entire route in one direction or both directions, must have the right to cancel single or
even ALL contracts if conditions (GTCs, market rules, legislation) deteriote signifi-
cantly in one of the three countries involved.

4.6. Would you prefer ex ante or ex post conditionality in the open season’s capacity
allocation design? Please state your reasons.

Ex ante conditionality. Conditionalities must be set up up in advance of the auctioning


process.

4.7. Do you have any comment on the above mentioned Methods?

SNTGN Transgaz SA ● FGSZ Ltd ● Gas Connect Austria GmbH Page 5


Capacity Allocation Concepts in the RO-HU-AT Open Season Procedure
for Public Market Consultation
Dated 3 February 2016

Before any method is decided to be chosen, it has to be consulted with interested


shippers and determined in detail. There is also a need for clear specification which
rights and obligations will fall to the shippers after having purchased the capacity.
Currently, varying and sometimes entirely different degrees of implementation of NC
CAM on across European countries are disincentivizing to book long term capacity
on a binding basis. Shippers could be incentivized in booking superbundled capaci-
ties by applying lower tariffs compared to bundled products on only one cross-border
point. This might be justified and technically reasonable by e.g. applying Dynamically
Allocable Capacities (“DZK”) in addition to Freely Allocable Capacities (“FZK”).
(DZK=balanced in entry and exit nominations but restrictions in use of the VTP)

4.8. Would you have a preference for any of the above mentioned Methods?

Method 2

If you have any preference, please state your reason.

We support method 2, but only under the provisions we already mentioned under 4.5

SNTGN Transgaz SA ● FGSZ Ltd ● Gas Connect Austria GmbH Page 6

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy