
34th IG Meeting
South Gas Regional Initiative
24th November 2015
Videoconference
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
Agenda
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CMP: Common methodology of OSBB for the Region.
 II.Evaluation
of responses from the public consultation
(for information by NRAs)
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
II. CMP: Common methodology of OSBB for the Region.
OSBB SUMMARY:

OVERSUSCRIPTION (OS):



Methodology applied the D-1 for the following day D.
After last nomination TSOs compute & publish the additional
capacity.
Calculation of Additional Capacity:






Additional Capacity = function (nominal capacity, risk index, operating
margin).
Trigger value
Capacity to offer = Technical Capacity – Capacity sold + Additional
Capacity
Additional Capacity offered after last nomination (D-1) for day D.
Firm Capacity.
Bundled Capacity.
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
II. CMP: Common methodology of OSBB for the Region.
OSBB SUMMARY:

BUY BACK (BB):


Applied if S net nominations in the VIP > technical capacity.
Merit Order (Before applying BB):
1.
2.
Management of the OBA.
Interruption of interruptible capacities:
1.
2.
3.
4.
5.

Within Day interruptible capacities
Daily interruptible capacities
Monthly interruptible capacities
Quarterly interruptible capacities
Yearly interruptible capacities
BB Market Based Procedure:
1.
2.
3.
4.
5.
Restrict renomination rights (upwards & downwards)
TSOs will submit a proposal to buy (bundled, max. price & users)
Users will submit proposals to sell (bundled, amount, price<max. price)
Clearing price = lowest successful offer to sell.
If offers are not sufficient: pro-rata rule (bundled and unbundled
capacities). Price = Regulated tariff.
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
II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation
The Proposal was submitted to public consultation until 30 October 2015.
8 responses have been received from: 2 associations, 4 shippers, 1 LSO, 1
TSO.
General comments:


All participants welcome the opportunity to comment the proposal.
Participants support explicitly the target to maximise capacity at the IPs:

To review physical capacities at the IPs would have more impact than
OSBB.
•
•



Need to perform hydraulic analysis, transparent criteria and coherent with
ENTSOG’s. Also impacts in new infrastructures
More involvement of operators potentially affected by decisions taken by TSOs of
the IPs.
Transparency of the process must be ensured: notifications to the shippers
Increase of TSOs coordination. Offer a unique contact point, a common contract
model and a unique nomination linked to the use of the bundled capacities.
NRAs must supervise the maximisation of the offered capacity by the TSOs
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

II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation
Methodology for offering additional capacity (I)
 Generous security margin to cover the TSO’s risks (5 comments):
•
•

NRAs should supervise the applied margin and its effects.
Probability of occurrence could have been taken into account to
calculate those margins (according to the EC).
Ask for amendments (3 comments):
•
(page 7) “Additional capacity will be offered at VIP Ibérico and/or VIP
•
Pirineos jointly with through auctions after the available capacity has
been allocated through auctions. Both additional capacity and available
capacity will be treated as firm capacity and there will not be any
distinction between them”.
(page 9) More detailed description and definition of the cases when the
additional capacity will not be offered.
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
II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation

Methodology for offering additional capacity (II)
 The bundle of capacity is questioned. It leaves the unbundled
capacity without use:



Pag. 7: “The methodology proposed for calculating the additional capacity ensures
that the amount of additional capacity to be offered at both sides of the VIP Ibérico
and/or VIP Pirineos will be the same.
In order to maximize the offer of bundled capacity, all the additional capacity will be
offered always as bundled capacity in a first stage.”
Pag. 8: “Each TSO will upload the capacity to be offered in the rolling day ahead
capacity auction (one value each TSO); then, PRISMA will apply the lesser value to
determine bundled capacities. If after the rolling day ahead capacity auction there
is still OS capacity left, it would be offered to the market in a second stage as
unbundled OS capacity.”
Ask for assessment of the probability of curtailment at the VIP
Pirineos as consequence of restrictions within France market areas
(association).
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

II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation
Buy back methodology (I)

The list of exceptional events in which the BB process is not
triggered must be closed.
•
(page 10) “(…)situations where the actual capacity (i.e. operational capacity) is
below the technical capacity caused by exceptional events such as, failures,
breakdowns, etc. If this is the case, no buy back procedure shall be triggered”

Technical and commercial measures. Three proposals related to
the order to apply the measures.
•
•
(page 11): the OBA would be managed after the interruption of
interruptible capacities.
They propose a voluntary BB process where all capacity holders can
participate offering capacity (firm and OS).
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
II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation

Buy back methodology (II)

Technical and commercial measures.
•
Proposal:
1. Management of OBA.
2. Interruption of interruptible capacity: daily; monthly; quarterly;
yearly.
3. Voluntary BB process: all capacity holders (firm/OS) could
participate in this process.
4. If the problem is solved the process will end
5. If the problem is not solved (there is not sufficient capacity), two
default rules are proposed:
A.
B.
TSO would BB firm capacity at regulated price from each shipper
holding “daily firm capacity” meaning available capacity plus additional
capacity (OS) offered in the daily auction on the IP, in proportion to the
daily firm capacity it holds.
TSO would mandatory BB capacity from shipper holding OS capacity
on the IP in proportion to the OS capacity it holds. The step will not be
necessary if cap of maximum price TSO can pay is avoided.
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
II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation

Buy back methodology (III)
 Market based procedure: the renomination limitation for shippers is
considered contradictory to market competition / it is the most
relevant difference between firm day ahead UIOLI and OSBB
•
(page 12) “As soon as the TSOs have identified the need to trigger the market
based mechanism, they will restrict network users renomination rights upwards and
downwards in both flow directions until the end of the gas day. (…)”

The pro-rata mechanism is not supported by 4 respondents.
•
It should not undermine the firmness of annual, quarterly or
monthly capacity rights for shippers.
(page 13) “If users do not offer enough capacity in the buy back procedure (…)
TSOs will reduce all firm bundled and unbundled capacities the daily firm capacity
(the available capacity plus the additional or “oversubscription” capacity allocated)
according to pro-rata rule up to the amount of capacity that needs to be bought
back. TSO shall pay network users the regulated tariff for this capacity”.
•
The amount of capacity that will be reduced should be clarified:
Is it the difference between the capacity offered by users and the capacity needed
for the BB procedure or the total capacity needed for the BB procedure?
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
II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation

Buy back methodology (IV)
 Call For Orders:
•
The functionality is not dynamic in PRISMA. The OTC method is
more used to inform TSOs, market and register the trade.
•
The functionality of Reverse Auction on the primary market in
PRISMA could be a solution.

A shipper proposes an amendment in page 13 in relation to
offers to sell:
“TSOs shall only consider valid “offers to sell” that fulfill both conditions
below: [...] and The amount of capacity included in the “offers to sell”
submitted is equal to or lower than the nominated capacity.
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
II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation

Pricing
 Definition of the clearing price
•
It should be the highest successful “offer to sell” or the price of
the last successful bid “offer to sell” needed to fulfill the TSOs
request.

•
defined as the price of the lowest highest successful “offer to sell”.
(page 16) “The clearing price shall be defined as the price of the lowest
highest successful “offer to sell”.
The default rule should be described in the section of the maximum price
that TIGF is allowed to pay (page 15).
Split of costs
•

(page 13) “When two or more “offers to sell” (…) The clearing price shall be
Maximum price TSOs are allowed to pay
•

•
The criteria used to split the cost related to VIP Pirineos should be
explained (as established for VIP Iberico, page 16).
Timeline
 Adding the reference to the product “day
points 4 to 7 in the section 5 (page 18).
ahead capacity”
to clarify the
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
II. CMP: Common methodology of OSBB for the Region.
Evaluation of responses from the public consultation
Next steps
 TSOs will review the Proposal taken into account the
comments received from the public consultation
 TSOs will submit the final version to the NRAs by mid
December
 NRAs will discuss the proposal, impacts and
development in the Region in a RCC meeting on the 19th
January 2016
 Follow up the IT systems and developments to implement
the OSBB in the Region
 NRAs will decide next steps and deadlines.
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Interoperability NC. Latest developments and next
 III.
steps in the Region
(for information by TSOs)
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 IV. Infrastructures
IV.1 Update of the second list of PCIs in the Region
(for information by NRAs and TSOs)
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 IV. Infrastructures
IV.1 Update of the second list of PCIs in the Region

The second list of PCIs has been published on 18 November.
PCIs in the Region:
Priority Corridor North-South Gas Interconnections in Western Europe ('NSI West Gas')
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 IV. Infrastructures
IV.2 Update of the infrastructure status of the OS 2013-2015
(for information by TSOs)
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 V. AOB and next meetings
2016
Next meetings:
16th RCC meeting: 19 January 2016
35th IG meeting: 16 February 2016
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