New tariffs system in France Jacques Laurelut GTE

New tariffs system in France Jacques Laurelut GTE 23 rd October 2003

The French network Gaz de France CFM GSO GTE 22 nd October 2003 2

A multi-zonal Entry-Exit system §System in place in 2003 and 2004 §Eight Entry-Exit zones: • one for GSO • two for CFM • five for GDF (one for L-Gas, one for H-gas) § Average area covered by each zone: 70 000 km 2 (Belgium: 30 000 km 2 ; Netherlands: 35 000 km 2 ; Ireland: 70 000 km 2) GTE 22 nd October 2003 3

How does it work ? Interconnection point Underground storage Regasification plant Taisnières Dunkerque Obergailbach GDF Montoir Oltingue CFM GSO Fos GTE 22 nd October 2003 4

Advantages of this system (1/2) v No inter-TSO payment although there are 3 TSO’s v Favouring competition: ü no capacity constraint within each zone ü each GDF’s zone has a storage capacity ü daily balancing in each zone v Transparency: physical capacity constraints are reflected by the inter-zone links ü appropriate information is given to the network users by the TSOs regarding available capacities for the supply of their customers ü appropriate information is given by the network users to the TSOs (capacity booking reflects the actual need for capacity) ü minimisation of the risk of supply shortages for customers GTE 22 nd October 2003 5

Advantages of this system (2/2) v Cost reflectivity: minimisation of cross-subsidiation ü the cost of the inter-zone links is borne by the users of the corresponding capacity only ü the price for the inter-zone links is very low for backhaul capacity ü consistency with existing transit contracts v Consistency with physical balancing requirements: ü the commercial balancing obligation on each zone for the shippers is consistent with the physical balancing requirements of the TSO GTE 22 nd October 2003 6

New Transmission tariff (from January 1 st 2004) q Regulator proposal dated July 24 th, subject to French government approval q Same tariff structure ü Zonal Entry / Exit ü Five balancing zones for Gaz de France : NORD H, EST, OUEST, SUD, NORD B q But a lot of changes have been introduced ü ü GTE Inter-zone links prices have been reduced by 20% short-duration contracts (1 month) long-duration contracts (more than a year) have been introduced title transfer facility is proposed within each balancing zone (from November 2003) 22 nd October 2003 7

Price Comparison (1000 MWh/d - 300 GWh/yr - NTAR=2) GTE 22 nd October 2003 8

Transparency : publication on the web site q Detailed TPA conditions q Entry, exit and link points ü Capacities ü Flows q Total firm capacity Subscribed interruptible capacity Available firm capacity Daily flow Maintenance schedule ü Maintenance programme and impact on available capacities GTE 22 nd October 2003 9

Third Party Access 2001 2002 2003 (estimated) Gas delivered (TWh) 6, 1 19, 2 31 (on 180 TWh eligible) Number of Sites concerned 6 11 23 Number of shippers (including Gaz de France) 4 7 8 GTE 22 nd October 2003 10

v Multi-zonal Entry-Exit tariff system § A model for Europe ? v Process of opening the French gas market § On the way of success … GTE 22 nd October 2003 11