Allocation of capacities Allocation of Capacities Determination of

Allocation of capacities

Allocation of Capacities • Determination of capacities Calculation of pipeline capacities is based on the physical laws governing transmission - Mathematical function of pipeline design parameters: distance, diameter, roughness of steel, pressure differentials etc - Pressure differentials themselves are determined by offtakes from and deliveries into the system: Offtakes mainly driven by temperature Deliveries mainly driven by commercial decisions of shippers Conclusion: Capacity is subject to system dynamics and has restricted information value 2

Allocation of Capacities • Different capacity models - - Notional path model - Guarantee of capacity on notional path (A B) - No operational congestion management - Importance of transits through the system - Applied in most countries in Continental Europe Entry/exit model - Capacity at specific entry/exit points - Disconnection of entry and exit - Applied in the UK (pool based, i. e. nationwide hub) and with restrictions in Italy - Need for operational congestion management - Limited transits - Large number of end users supplied by one TSO (UK) 3

Allocation of Capacities = commercial flows = physical flows 4

Allocation of Capacity • Allocation of capacities - Principle Non-discrimination and transparency Notional path model First come - first served Priorities e. g. for public service subject to national legislation Allocation process often standardised and subject to defined internal rules and procedures Entry/exit model Auction or first come first served In UK auctioning of entry capacity subject to rules approved by Ofgem 5

Capacity Allocation auctions first come-first served Mix or not decided 6

Allocation of Capacity • Procedures for the allocation of capacities Non-discrimination - - Notional path model First come first served In some systems priorities e. g. for public service Allocation process often standardised and subject to defined internal rules and procedures Entry/exit model Auction or first come first served In UK auctioning of entry capacity subject to rules to be approved by Ofgem 7

Allocation of Capacity (Italy) Initial capacity allocation 1 2 3 4 Allocation to existing Long Term Contracts Pro Rata Allocation to new contracts Shipper’s Confirmation and re-allocation Final contractual quantities “First Come-First Served” for residual capacities 8

Allocation of Capacity (Italy) Allocation of residual capacities (1) - - Publication of residual capacity for the booking in the current Thermal Year in the first ten days of every month. shippers send demand by registered mail within the first day of the previous month of the starting service for annual and or seasonal interruptible capacities including useful information classification list on the basis of sending date of the registered letters 9

Allocation of Capacity (Italy) Allocation of residual capacities (2) - - assignment of such capacities within the first 10 days of the month and information of shippers by fax Thermal Year in the first ten days of every month. shippers send demand by registered mail within the first day of the previous month of the starting service for annual and or seasonal interruptible capacities including useful information classification list on the basis of sending date of the registered letters assignment of such capacities within the first 10 days of the month and information of shippers by fax 10

Allocation of Capacity (UK) • Auctioning Process for Entry Capacity Monthly firm capacity is allocated by pay-as-bid auctions Additional firm and interruptible capacity is allocated on a daily basis using pay-as-bid-auctions Congestion Management if Transco has oversold capacity or for other reasons, i. e. cancel interruptible capacity or buy back firm capacity 11

NTS Entry Capacity Allocation actual flow atd. expected flow for d 1 at d-1 interrupted interruptible interrupted and buy back interruptible add. firm monthly firm d 1 d 2 add. firm monthly firm d 3 12

Allocation of Capacity (UK) • Allocation of Exit Capacity NTS Exit Capacity is primarily allocated to shippers by reference to the levels of registered supply point capacity Shipper’s capacity levels are adjusted automatically if shippers gain or lose customers in the LDZ 13

Allocation of Capacity (Netherlands) Transport protocol (1) Step 1: Step 2: Step 3: Step 4: Shipper makes an application for transport conditions at Transport Services ask for information about the availability of the transport capacity requested from the Asset Management unit The Asset Management unit determines whether the transport capacity requested is available The Asset Management unit answers Transport Services concerning the availability of the transport capacity 14

Allocation of Capacity (Netherlands) Transport protocol (2) Step 5: Step 6: Step 7: Step 8: Step 9: Transport Services draws up the transport conditions for the shipper The shipper orders the transport capacity Transport Services the order of the transport capacity to the Asset Management unit The Asset Management unit determines whether the transport capacity requested is available The Asset Management unit answers Transport Services concerning the availability of the transport capacity 15

Allocation of Capacity (Netherlands) Transport protocol (3) Step 10: Step 11: Transport Services confirms the order of the transport capacity to the shipper and informs about the allocation rules Shippers at the relevant entry- and exit-points are informed about the change in the allocation process 16

Capacity Allocation in Germany /Ruhrgas Gas Transport Management max. 12 working days receipt Dispatching examination capacity check reply implementation possible negotiations contract signed Invoicing implementation

Allocation of Capacity (Germany / Ruhrgas 1) General principle: First come –first served If more than one application at the same time and capacity is scarce: information of all applicants about capacity available capacity requested number of applicants and invitation to applicants to give a binding offer about the capacity to be committed up to a certain date 18

Allocation of Capacity (Germany / Ruhrgas 2) If available capacity after binding offers is sufficient capacity is allocated to the applicants according to their binding offers If available capacity after binding offers is insufficient capacity is allocated on a pro rata basis to the applicants to avoid systematic overbooking. 19