European Transparency Requirements update

1
European Transparency Requirements - update

• Transmission Workstream
• 1st May 2008

2
European Transparency Drivers

• Transparency seen as key to liberalization of
  European gas market
• Drivers
• Compliance with existing EC Regulation 1775/2005
• 3rd Package of amendments to current
  Regulation/Directives on gas market
  liberalization
• Gas Regional Initiative (GRI)
• GRI NW Roadmap

3
Gas Regional Initiative

• European Regulators Group for Electricity and
  Gas (ERGEG), of which Ofgem is member,
  established Gas Regional Initiative in April 2006
• Promote further liberalisation of national
  markets
• Develop regional solutions as stepping stone to
  European gas market
• UK within GRI NW
• Transparency identified as one of the priority
  areas for GRI NW
• Participation in GRI is voluntary, but TSOs are
  expected to deliver agreed outputs

4
GRI NW Transparency Project

• GRI NW Transparency project
• Aim improve publication of capacity and flow
  data
• Demonstrate commitment to respond to market
  requirements
• Established TSO information release principles
• e.g. release will not prejudice any TSO customer,
  TSO or any other stakeholder
• Operators response to EFET wish list/Ofgem
  transparency questionnaire
• Agreed information provision extends beyond
  requirements of EC Regulation 1775/2005

5
UK Points Relevant for GRI NW

• Focus on connections with other TSOs and
  importation points for non-indigenous gas
• Identified points for UK
• Entry Points
• Bacton (IUK BBL)
• Easington (Langeled)
• Isle of Grain
• Milford Haven (Dragon South Hook)
• Exit Points
• Bacton (IUK)
• Moffat

6
UK Way Forward

• UK regime largely compliant and frequently
  exceeds requirements
• Only 2 gaps identified concerning exit capacity
  and day ahead nominations
• Addressing these gaps requires
• provision of day ahead nominations at
  interconnectors and LNG terminals
• publication of technical, contracted and
  available exit capacity at interconnectors

7
UK Way Forward

• Raise Mod for Publication of Day Ahead
  Nominations
• Publish aggregate nomination per point at 1800
  D-1
• Question Should we limit publication to GRI NW
  list or extend to all points to avoid possible
  discrimination issues?
• Option 1 publish data for GRI NW listed points
  only
• Option 2 publish data at all relevant points
  (c.f. EC Regulation 1775/2005) requirement in
  draft 3rd package

N.B. Publication of nomination data is voluntary
at present
8
UK Way Forward

• Exit Capacity - (technical, contracted and
  available)
• Question Do we push ahead with GRI NW
  requirement in light of ongoing Exit Reform?
• Option 1 await Ofgem decision re Exit Reform due
  November 2008
• Current route for Regulation compliance, but have
  used this argument since Regulation came into
  force
• Option 2 proceed and publish technical,
  contracted and available exit capacity at the
  two GRI NW listed points
• Potentially misleading as large proportion of
  exit capacity not booked but allocated after the
  day to interruptible meters
• Option 3 publish current exit capacity data at
  all Relevant Exit Points (EC Regulation
  1775/2005)
• Baselines already published (thus partial
  compliance with current Regulation)

9
Relevant Point Consultation Requirement

• No matter what options decided, there is still a
  need consult on relevant points
• EC Regulation 1775/2005, Article 6.4
• The relevant points of a transmission system on
  which information must be public shall be
  approved by the competent authorities after
  consultation with network users.

10
Relevant Point Consultation Requirement

• EC Regulation 1775/2005, Annex 3.2 - Definition
  of all relevant points for transparency
  requirements
• All entry points
• Most important exit points zones
• Covering at least 50 of total exit capacity in
  aggregate
• Points zones individually covering more than 2
  of total exit capacity of network
• Interconnections to other TSOs
• Points connecting to LNG terminals
• Essential points (e.g. likely to experience
  physical congestion)
• Points of connection to infrastructure providing
  ancillary services