Image courtesy of Infrastrutture Trasporto Gas
ENTSOG’s Market Team is responsible for providing expertise, monitoring and development of the market-related network codes that promote the internal European gas market. The Market Area has also been involved with the Energy Community, providing support in their Network Code development and implementation.
In addition to work on the Network Codes, the Market Area is also responsible for the jointly managed ACER and ENTSOG Functionality Process, which addresses not only potential adjustments to the implementation of Network Codes but also to include possible issues which might require future Network Code adaptations.
The work within the Market Area is organised into three main areas, split to align with the relevant Network Codes. The work within these areas is managed via their corresponding Work Groups and supplemented by a number of Kernel Groups with more specialised tasks. The work areas are as follows:
The Capacity Working Group (CAP WG) is responsible for ENTSOG’s activities related to the allocation of existing and incremental capacity (CAM NC – REG (EU) No 2017 / 459) and congestion management (Guidelines on CMP – Commission Decision of 24 August 2012 on amending Annex I to Regulation (EC) No 715 / 2009).
CAP WG consists of the following three Kernel Groups for detailed tasks:
- Implementation & Effect Monitoring Kernel Group
- Functionality Kernel Group
- General Terms & Conditions Kernel Group
( GT & C KG )
Implementation & Effect Monitoring Kernel Group
The Implementation & Effect Monitoring Kernel Group (I & E KG) is responsible for the monitoring on Capacity Allocation Mechanisms (CAM NC) and the Guidelines for Congestion Management Procedures (CMP guidelines). The IEM KG develops monitoring reports to all implementation deadlines in the CAM NC and CMP guidelines as well as analysis, reports and responses to ACER’s implementation monitoring, where appropriate.
Functionality Kernel Group
The Functionality Kernel Group focus on how to facilitate the Regulation (EU) No 2017 / 459 on Capacity Allocation Mechanisms (CAM NC), and the CMP guidelines to be working properly in practice across borders.
General Terms & Conditions Kernel Group
The GT & C KG is responsible for ENTSOG’s activities related to the Regulation (EU) No 459 / 2017 Article 20 CAM NC – the review and creation of a catalogue of the main terms and conditions of the transport contract(s) for bundled capacity products, identifying and categorising differences across Member States in relation to the main terms and conditions and the reasons for such differences. These findings were published in early 2018, for the development of a final template for main terms and conditions. Based on these findings ENTSOG will develop a final Template of main terms and conditions.
The Balancing Working Group (BAL WG) is responsible for the Balancing Network Code (BAL NC). In 2017, the BAL WG focused on the implementation and the effect monitoring of BAL NC.
The BAL WG has set up two internal sharing sessions on how to take balancing actions on the market and on TSOs’ incentives from the regulators. The group has also organised two joint ACER / ENTSOG workshops on Within-Day Obligations and the information provision and trading platform.
The Tariff Working Group (TAR WG) is responsible for the Network Code on Harmonised Transmission Tariff Structures for Gas (TAR NC). In 2017, the TAR WG was primarily focused on delivering the TAR NC post comitology and the implementation of the code after its entry into force on 6 April 2017.
The TAR WG contains one joint Task Force – the TAR Data Publication Task Force (TAR DP TF) – hosted together with the Transparency Work Group (TRA WG).
Tariff Data Publication Task Force
The TAR DP TF was established in November 2016 comprising both TAR WG and TRA WG members and is responsible for providing expertise, support and proposals for the activities related to the implementation of the transparency (data publication) requirements of the TAR NC.
This included the development of the standardised table for publishing tariff information directly on ENTSOGs Transparency Platform and in addition assisting the TSOs with the ‘early compliance’¹ publication requirements.
‘Early compliance’ is the decision made in favour of publishing certain requirements before 31 December, which is earlier than was originally envisaged. This will ensure additional transparency for stakeholders and easy accessibility for the applicable tariffs.
Since its introduction in 2016, the Functionality Platform has been open to stakeholder issues to be handled by the FUNC process. In discussions with stakeholders, the limited scope – only NC implementation, functional or operational issues – was outlined as a potential barrier to submission of network code related issues. Therefore, in the summer of 2017, in conjunction with ACER, the functionality process underwent scope broadening allowing any issue related to the network codes to be included. In addition, the number of potential codes and guidelines was also expanded to include the Transparency Guidelines and the Tariff NC.
At the end of 2017, the first stakeholder issue was raised on the Functionality platform, related to data exchange protocol and encryption.
ENTSOG and ACER will process this and other issues and will discuss potential solutions with the stakeholders in early 2018 with the aim of publishing a solution in mid-2018.
Image courtesy of Ontras
Activities in the Market Area in 2017
Capacity Working Group
Capacity Allocation Mechanisms
ENTSOG prepared auction calendars in 2017 to be published in January 2018 for the gas year 2018 / 2019.
In June 2017, the Monitoring Report for 2016 for CAM NC and CMP Guidelines was published.
In Q4 of 2017 ENTSOG launched a monitoring process for CAM NC and CMP Guidelines for 2017. This monitoring is required by Article 8 (8) of the Regulation (EC) No 715 / 2009.
On 6 April 2017, the amendment of the CAM NC came into force. ENTSOG according to Article 21 (3) has to develop a non-discriminating, free-of-charge conversion Capacity conversion model – a model which was published 1 October 2017. The model functioned as a basis for TSOs to offer capacity conversion services from 1 January 2018. This ENTSOG conversion model builds upon previous work done by ENTSOG in 2015 to prevent the “capacity mismatch issue”. The revised CAM NC oblige TSOs to offer capacity conversion service based on the ENTSOG model.
To fulfil ENTSOG’s legal requirements as stated in Article 20 CAM NC (EU 459 / 2017) – alignment of main terms and conditions for bundled capacity products – ENTSOG commenced work at the end of 2016 on the review and creation of a catalogue of the main terms and conditions of the transport contract(s) for bundled capacity products.
ENTSOG supported activities of the Energy Community (EnC) Secretariat related to implementation of CAM NC and CMP Guidelines in the Energy Community Contracting Party countries. ENTSOG experts participated at physical meetings and workshops of EnC to provide know-how and best practices transfer from EU TSOs to EnC members, TSOs, and NRAs.
Congestion Management Procedures
In June 2017, the monitoring report 2016 for CMP Guidelines was published. ENTSOG launched the monitoring process for 2017 at the end of 2017.
Incremental Capacity work
The first demand assessment for incremental capacity, which constituted the start of the incremental capacity process, was conducted in 2017.
It was required that by 8 weeks after the start of the incremental capacity process, non-binding demand indications for incremental capacity were submitted by network users to the affected TSOs. ENTSOG developed a Demand Indication template to express non-binding demand indications to TSOs. Based on the demand expressed by the network users, TSOs created demand assessment reports evaluating the prospective need for incremental capacity and stated whether an incremental capacity project would be initiated.
The market demand assessment report (DAR) was published on the websites of the TSOs concerned in July 2017.
In nine Member States the Incremental Capacity process was initiated.
General Terms and Conditions exercise
Article 20 of the Commission Regulation (EU) 2017 / 459, CAM NC required ENTSOG to draft and publish a template for the “main” terms and conditions “covering contractual provisions which are not affected by fundamental differences in principles of national law or jurisprudence, for the offer of bundled capacity products”.
As a first step in the process, ENTSOG published a catalogue of main terms and conditions, which was provided to stakeholders in May 2017 during a consultation process. As a next step, ENTSOG developed the report on the differences between the main terms and conditions of bundled capacity products of existing transport contracts, and the reasons for such differences. The process is continuing in 2018.
Balancing Working Group
The Network Code on Gas Balancing in Transmission Networks (Commission Regulation (EU) No 312 / 2014) was published in the Official Journal of the EU in March 2014 with a first implementation deadline as of 1 October 2015 and a second implementation deadline for countries which applied transitory option on 1 October 2016.
During 2017, the BAL WG focussed on the implementation requirements set out in the BAL NC.
Following its monitoring obligation set out in Article 8 (8) of the Regulation (EC) No 715 / 2009 and to assess the implementation plans of the individual TSOs, ENTSOG elaborated its second BAL NC monitoring report, in which the implementation status of the BAL NC by 1 October 2016 was identified and its first effect monitoring report.
The ENTSOG Report on BAL Monitoring was published in June 2017.
In conjunction with ACER, ENTSOG held two workshops where specific issues were discussed on Balancing such as information provision and within day obligations.
Tariff Working Group
The TAR NC entered into force on 6 April 2017. The TAR WG primary focus and workload throughout 2017 was to support ENTSOG members with the implementation of the TAR NC.
The TAR WG completed the TAR NC Implementation Document (TAR IDoc) before the TAR NC entry into force on 6 April 2017. The TAR IDoc is a non-binding document, prepared for information and illustrative purposes, and offers a set of examples and possible solutions for the implementation of the TAR NC throughout the EU. The TAR IDoc was updated and the second edition published in October 2017. The update to the TAR IDoc was based on a TAR WG review, dedicated sessions held with stakeholders such as the European Federation of Energy Traders (EFET) and Storage System Operators, and the responses received from a public consultation.
Two TAR NC implementation workshops were organised by ENTSOG in 2017 to coincide with the entry into force and application dates of the TAR NC. The dates of the two workshops also aligned with the publication of both versions of the TAR IDoc During the workshops ENTSOG presented their views and possible solutions for the implementation of the TAR NC. ACER and stakeholders were also invited to present their views. The videos from the workshops have been made publicly available for future use and reference and are available on the ENTSOG website.
In 2017, the TAR WG started work on the TAR NC Implementation and Baseline Effect Monitoring report 2017, which will provide the status of the implementation of the TAR NC by the TSOs and will constitute a baseline study of the effects of the TAR NC on the European gas market. The TAR WG worked on the report throughout 2017, establishing the scope of the implementation monitoring part of the report and developing the relevant indicators for the effect monitoring part of the report. The required data were collected and work on the report commenced in the last quarter of 2017. As per Article 36 (1)(a) of the TAR NC, the report was submitted by 31 March 2018 to ACER.
The TAR WG cooperated with other WGs, for example with the CAP WG on tariff issues related to incremental capacity, and with the TRA WG, through the TAR DP TF, on the implementation of the transparency (data publication) requirements of the TAR NC. In 2017, the Task Force provided ongoing assistance to ENTSOG members who successfully implemented the publication requirements of the TAR NC, before the deadline of December 2017. This included developing the standardised table for publishing tariff information directly on ENTSOGs Transparency Platform, and in addition, assisting the TSOs with the ‘early compliance’ publication requirements.
A number of TAR NC implementation Knowledge Sharing Sessions were organised by the TAR WG in 2017, both internally between TSOs and externally between TSOs and NRAs. The TAR WG supported the further development of the Functionality process and on any tariff related issue. In addition, the TAR WG have been working on the implementation of the TAR NC with the Energy Community and their Contracting Parties, including contributions to the Gas Working Group meetings, Transparency Workshop and providing advice on training for their NRAs. Throughout 2017, the TAR WG also responded to consultations and queries from stakeholders and developed ENTSOG positions on tariff related issues to ensure ENTSOG’s work and views are appropriately presented externally.