H Cattoor

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Implementation of EASEE-gas rules Or Working
towards a functioning European gas
network European Association for the
Streamlining of Energy Exchange Maribor October
9, 2007
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European Association for the Streamlining of
Energy Exchange- gas

• Created in March 2002 with the support of the
  European Gas Regulatory Forum (Madrid Forum)
• Mission To develop and promote common
  practices to simplify and streamline business
  processes between the stakeholders that will lead
  to an efficient and effective European Gas
  Market
• Registered office in Paris, France

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Organisation

• Basic principles
• Open, independent and fully transparent
• Structured and balanced voting
• Represents the entire gas chain, open to all
  stakeholders
• Provides a working platform for the gas industry
• Voluntary guidelines unless adopted by a
  governmental agency

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EASEE-gas Segments
Ownership of gas
Physical flow of gas
Associate
Associate
Associate
Associate
Members
Members
Members
Members
Traders
Traders
Traders
Traders
Shippers
Shippers
Shippers
Shippers
Transporters
Transporters
Suppliers
Suppliers
Suppliers
Suppliers
Distribution
Distribution
Distribution
Distribution
Network
Network
Network
Network
Retail
Retail
Retail
Retail
Operators
Operators
Operators
Operators
Suppliers
Suppliers
Suppliers
Suppliers
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Gas market rules network access at EU level

• Commissions Scope 10 generic areas
  Impacting
• Security and reliability rules All
• Grid connection and access rules, Most
• Data exchange rules, All
• Interoperability rules, All
• Operational procedures in cases of emergencies,
  Many
• Capacity allocation / congestion management
  rules, Some
• Rules for trading, Some
• Transparency rules, All
• Balancing rules including
• rules on nominations procedures, Many
• rules for imbalance charges Some
• rules for operational balancing between TSOs
  systems TSOs
• Rules for harmonised transport tariff structures
  Most

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Gas market rules network access at EU level
Market rules design Impact on segments Network
access Data exchange rules Interoperability
rules Congestion management Capacity trading
Commodity trading Transparency Balancing
rules Cap. incr. planning, tariff meth. Master
trading agreements Other bi-lateral
agreements
Producers Traders TSOs Service
DSOs Suppliers End Users
Shippers Providers
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Gas market rules network access at EU level
Network operation physical design Impact on
segments Security-reliability Maintenance
System losses Quality commingling (op.) Residual
balancing Inter TSO compensation Inter TSO grid
operation Ten-year statement Tariff method.
(existg infrastr) Op. emergency procedures
Producers Traders TSOs Service
DSOs Suppliers End Users
Shippers Providers
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Gas market design market operation at EU level
Market Design
Market Operation
Time
Network Operating Rules
Market Rules
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Development and implementation of codes,
standards, and procedures across the EU 27
Developing rules standards impacting all
stakeholders Market Design
Implementation and optimal management of EU
grid supporting Market Operation

• Open, transparent
• Binding agreements
• Involvement of all stakeholders

TSO
TSO
TSO
TSO
Consultation Role
Producers
TSOs
End Users
TSO
TSO
TSO
TSO
Suppliers
DSOs
Retail suppliers
TSO
TSO
TSO
TSO
Shippers Traders
...
Service Providers
TSO
TSO
TSO
TSO
Optimal Management
EASEE-gas
GTE
Guidance/ Regulations
Enforcement
ERGEG
Develop CBPs
Advice
Commission
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CBP Implementation Survey 2007
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Approved CBPs included in survey

• 2003 Harmonisation of Units
• Implementation deadline 2005
• 2003 Nomination Matching
• Implementation deadline 2005
• 2004 Edig_at_s
• No implementation deadline
• 2005 Gas Quality Harmonisation
• Implementation deadlines 2006 and 2010
• 2005 Interconnection Agreement
• Implementation deadline 2007
• 2005 Constraints Handling
• Implementation deadline 2006

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2007 CBPs
Approved Sep 2007

• Common Data Communications Network
• Message transmission protocol
• Companys Identifier encoding
• Connection point identifier encoding
• Harmonisation of the allocation information
  exchange
• Edig_at_s revision and version rules
• Secondary trading of capacity

Out for consultation expected to be approved
Nov 2007
Under development
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Responses cover 18 markets/ systems

• Survey carried out in Aug/Sep 2007
• Additional responses from Finland, Sweden and
  Switzerland
• Fewer responses from some other countries

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CBP1 Harmonisation of Units Pressure bar

• All respondents indicated that all
  markets/systems in the survey are using bar to
  measure pressure

CBP element implemented
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CBP2 Nomination Matching Process Use of
Coordinated Universal Time

• Most markets appear to use Coordinated Universal
  Time
• UK IRL require Network Code changes
• SWI indicates systems and financial issues
• AUT indicates legislative and regulatory changes
  required
• ESP and ITA have not stated barriers

CBP element implemented
CBP element not implemented
CBP element not implemented due to
regulatory/legislative issues
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CBP2 Nomination Matching Process Lesser Rule
applies to matchingMessages to contain matching
shipper

• Most markets appear to use Lesser Rule for
  matching
• FIN only has single source, so no need for
  matching
• The GBR regime does not include matching and
  agents act for the shippers at interfaces. There
  are no requests from shippers to change existing
  arrangements
• IRL, NIR, IUK and POR use matching but not with
  Lesser Rule in all cases
• All would require Network Code and/or
  Interconnection Agreement changes

CBP element implemented
CBP element not implemented
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CBP2 Nomination Matching Process Deadlines for
initial nominations

• Some markets are not complying with nomination
  deadlines
• FIN only has single source, so deadlines agreed
  bilaterally
• DEN and SWE working to implement CBP in near
  future
• Most others have quoted Interconnection
  Agreements and Network Code changes as barriers
  to implementation
• No specific barriers mentioned in ITA

CBP element implemented
CBP element in process of being implemented
CBP element not implemented
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CBP 3 Use of Edig_at_s

• Generally well adopted through central area of
  Europe
• FIN only has single source so communications
  agreed
• Some systems in GER use it and others do not
• All others indicate IT issues, internal resource
  and/or financial issues as barriers
• GBR SWE also indicate Network Code changes are
  required
• No specific barriers mentioned in ITA or ESP

CBP element implemented
CBP element implemented in some systems
CBP element not implemented
CBP element not implemented due to
regulatory/legislative issues
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CBP4 Gas qualityHarmonisation of S, CO2, WDP,
HCDP

• In most systems the CBP has been implemented,
  partly implemented or is in the process of being
  implemented
• FIN single source
• SWE old limits are close need agreement with
  DEN
• BEL, DEN, NOR in process of implementing all
  limits
• GER some systems adopted ahead of new DVGW spec.
• NED implemented at some points but legacy
  problems slowing down others
• GBR POR require legislative changes to
  technical specs
• IRL NIR linked to GB spec.
• AUT requires changes to OVGW

CBP element implemented
CBP element implemented in some systems
CBP element close to being implemented
CBP element not implemented
CBP element not implemented due to
regulatory/legislative issues
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CBP4 Gas qualityHarmonisation of Wobbe, RI,
Oxygen

• Most systems are either making progress towards
  the 01/10/2010 deadline or are waiting for the
  results of the CEN study before implementing
  changes
• GB also has a Government review to conclude
• IRL NIR are linked directly to the GB spec.
• Changes required to interconnection agreements in
  POR
• SWE gave no indication of progress

CBP element implemented
CBP element in process of being implemented
CBP element not implemented
CBP element not implemented due to
regulatory/legislative issues
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Survey conclusions

• Quite good progress is being made particularly in
  markets with largest interconnection
• Non-implementation does not always mean an issue
  of interoperability (e.g. Finland, Sweden,
  Ireland)
• Some legislative and regulatory barriers to
  implementation in some countries (Units
  Quality)
• National regulation needs to provide the proper
  framework/support to allow implementation
• Can take time to modify national network codes
  and needs support from all market participants
• Countries further east have issue of compliance
  with single supplier

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Implementation of EASEE-Gas CBP in the SSE region
relies on a number of factors to be effective

• More feedback and active membership needed, along
  the whole natural gas value chain in SSE
• Better feedback from EASEE-Gas members
• Czech Republic
• Slovenia
• Poland
• Feedback from non-EASEE-Gas members
• Producers, shippers, TSOs, DSOs,
  suppliers/service providers
• Especially in the South East Region
• BOTH in ERGEG/EU member states
• AND in neighbouring countries, e.g. countries of
  the Energy Community

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Participation in EASEE-Gas CBPOn a voluntary
basis

• GreenRespondent already
• YellowGRI REM SSE, non respondent
• Light blueEnC members
• Dark blueEnC observer countries
• Involvement sought from GRI REM SSE and EnC
  countries
• EASEE-Gas now to approach market participants in
  these countries

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Benefits of participating in EASEE-Gas andFuture
role of EASEE-GAS

• EASEE-Gas A broad platform for structured CBP
  development and implementation monitoring (?)
• EASEE-Gas ideally suited to play the role of a
  multi-stakeholder platform involving all
  stakeholder within the natural gas value chain
• EASEE-GAS hence as the ideal vehicle for
  consultation Strengths of the EASEE-gas
  consultation process

3rd PackageInteraction needed
Success of the development of codes and
standardswill crucially rely on the involvement
of all stakeholdersnot just transmission system
operators
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www.EASEE-gas.org
EASEE-gas
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A structured consultation process
Prioritised in line with Annual Plan approved
by the Board
Work Group announced to members by Executive
Committee (ExCom)
Common Business Practice Request from stakeholder
Each Segment has 2 votes irrespective of number
of participants in attendance or by
phone.Majority is over 50
Working Group develops Common Business Practice
Balanced Voting
Executive Committee approves CBP for release to
all members
Each ExCom Member votesMajority is over 50
Majority Voting
Members comments received and Working Group
modifies CBP accordingly
Each ExCom Member votesMajority is over 50 AND
max of 1 vote against in each segment
Executive Committee approve CBP
Balanced Voting
3 or more Full Members may appeal within 60 days
General MeetingMajority is over 50
Full membership ratification
CBP is approved
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Gas Quality HarmonisationThe Approach
Extensive industry consultation has taken place
Technical advice received from Marcogaz
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The Gas Quality Harmonisation Common Business
Practice