Ellund capacity. - Creating new capacity at Ellund (DE) Maja Klejs Pedersen and Poul Johannes Jacobsen. 11 December 2014 User Group 1

Transcription

1 Ellund capacity - Creating new capacity at Ellund (DE) Maja Klejs Pedersen and Poul Johannes Jacobsen 11 December 2014 User Group 1

2 Capacity maximisation CAM Article 6 Energinet.dk sees two options We request your input Timeline: 11 Dec. 14: User group Input is welcome until 15 Jan. 15: sent to DERA 1 Oct. 15: effective 11 December 2014 User Group 2

3 Capacity situation at Ellund Firm, 1 Jan Ellund Border GUD: 1,191,000 OGE: 171,616 GUD: 1,191,000 OGE: 171,616 kwh/h Denmark Germany Energinet.dk GUD and OGE Numbers are in million kwh/h The problem! How to solve it? GUD: 0 OGE: 0 GUD: 4,215,200 OGE: 0 kwh/h Available capacity = Blue Technical capacity = Black Future new capacity has already been allocated to Open Season contracts - GUD 11 December 2014 User Group 3

4 Keep in mind - Ellund flow lasts 3 months Mainly southbound from September to December 11 December 2014 User Group 4

5 Capacity situation at Ellund Firm - Two potential solutions 1. Flow commitment 2. Counter-Flow Nomination Right with a twist Two ways to reach the same goal Let us know which you prefer 11 December 2014 User Group 5

6 Capacity situation at Ellund Firm - Two potential solutions 1. Flow commitment 2. Counter-Flow Nomination Right with a twist Two ways to reach the same goal Let us know which you prefer 11 December 2014 User Group 6

7 Flow Commitment Size of FC Ellund Border Denmark Germany Germany from 2016: Long products are expected to be less costly than short products Energinet.dk GUD and OGE 11 December 2014 User Group Numbers are in million kwh/h Available capacity = Blue Technical capacity = Black Question 1 What capacity do you prefer? Yearly Quarterly Monthly Daily New firm capacity Fact: Daily capacity is available via the German shortterm UIOLI

8 Flow Commitment Shipper requirements Denmark Germany Size of FC Energinet.dk GUD and OGE Numbers are in million kwh/h Available capacity = Blue Technical capacity = Black Energinet.dk requirements in relation to shippers: 1. Holding Ellund Capacity: Firm (DK) and Firm (DE) GUD or OGE (e.g. must be booked as year or quarter products, in order to create a month product) (only available as bundled cap.) New firm capacity 2. Nomination restrictions See next slide 11 December 2014 User Group 8

9 Flow Commitment Nomination restriction Denmark Germany Size of FC Energinet.dk GUD and OGE Numbers are in million kwh/h Two options: 1. Shipper controls capacity, except when he is requested to flow gas Lead time: 4 hours 2. Nominations are locked in due New time in firm view of marketing of capacity the product on PRISMA E.g. the 1 st Monday prior to the month, if a month product No renomination right Available capacity = Blue Technical capacity = Black Question 2 Which option do you prefer? 11 December 2014 User Group 9

10 The new firm capacity Denmark Energinet.dk Question 3 If flow-commitment supply is higher than maximum demand, should we use: Pro rata? Auctions? New capacity will be equal to the flow commitment Germany Size of FC GUD and OGE Numbers are in million kwh/h Available capacity = Blue Technical capacity = Black Maximum new capacity is equal to technical entry capacity in Germany Will be sold on PRISMA e.g. Monthly, rolling to daily and within-day 11 December 2014 User Group 10

11 Payment of flow commitment Question 4 Views on the payment? Denmark Germany Size of FC Energinet.dk GUD and OGE Numbers are in million kwh/h Available capacity = Blue Technical capacity = Black Gas flow has lately been southbound Energinet.dk therefore proposes to pay a sum equivalent to the capacity charge Ellund DK This means that only volume tariff will be paid in DK In Germany, normal tariffs will be paid (Interruptible will have a 10% price discount) 11 December 2014 User Group 11

12 Capacity situation at Ellund Firm - Two potential solutions 1. Flow commitment 2. Counter-Flow Nomination Right with a twist Two ways to reach the same goal Let us know which you prefer 11 December 2014 User Group 12

13 Counter-Flow Nomination Right with a twist Counter-Flow Nomination Right (CFNR) an option at GUD today Here with a twist to release firm e.g. monthly capacity on the Germany side Denmark Today Energinet.dk Ellund Border New CFNR-WT product Nomination: 1st Monday month-1 (final) Reduced Tariff 3 2 Germany GUD New firm e.g. monthly capacity offered on PRISMA 11 December 2014 User Group 13

14 CFNR-WT: Linking contracts Links between contract 3 and 2 in the Danish system, and info on contract 1 and 4 in DE Flow on contract 3 <= 2 Same flow in contract 2 and 1, and in 3 and 4 as they have the same nomination due to lesser off rule The new capacity offered (5) will be = to the capacity (3) All contracts must be firm Question 1 (again) What capacity do you prefer? Yearly Quarterly Monthly Daily Denmark Germany Energinet.dk Ellund Border GUD New CFNR-WT product Nomination: 1st Monday month-1 (final) Reduced Tariff 11 December 2014 User Group New firm e.g. monthly capacity offered on PRISMA 5

15 CFNR-WT: Nomination limitations Example with a month product: Nominations are locked on the 1st Monday prior to the month. PRISMA Calendar for Monthly products: Example November Cap 3 rd Monday - Start of AUCTION 20 October nd Monday Publication of amount of capacity 13 October st Monday Nominations are locked 06 October 2014 This is the final nomination no renomination right For all four contracts, listed no. 1 to 4 on the previous slide. 11 December 2014 User Group 15

16 CFNR-WT: Tariff recommendation Tariff recommendation (Denmark): A. Volume tariff at exit: full payment B. Capacity tariff at exit: no capacity tariff Question 4 (again) Views on the payment? The shipper buys firm capacity The shipper has the capacity part refunded after the period, when it has been verified that the Shipper has lived up to his obligation. In Germany, normal tariffs are paid (Interruptible will have a 10% price discount) 11 December 2014 User Group 16

17 Comparison Question 5 Which of the two products do you prefer? Flow Commitment CFNR-WT Not linked to other capacities Linked to import capacity An option in GUD and OGE Only available in GUD Max cap. 1,362,616 kwh/h Max. cap. 4,215,200 kwh/h 11 December 2014 User Group 17

18 Final question Question 6 Should any of these new products be applied on other locations? Nybro Dragør? 11 December 2014 User Group 18

19 Test year 1. This product and the tariff are intended for a 1-year test period 1. After 1 year, there will be an evaluation e.g.: Is there a need for the product? Is the tariff at the right level? Does the product function as intended? Would other products be better? 11 December 2014 User Group 19

20 Thank You! We request your input Timeline: 11 Dec. 14: User group Input is welcome until 15 Jan. 15: sent to DERA 1 Oct. 15: effective 11 December 2014 User Group 20

21 New Capacity in Ellund - Questions Question 1 What capacity do you prefer? Yearly Quarterly Monthly Daily Question 6 Should new products be applied on other locations? Nybro Dragør Question 2 (nominations) What is the preferred option? 1. TSO option to change nomination Lead time: 4 hours 2. Nominations are locked e.g. 1 month before and no renomination Question 3 If flow-commitment supply is higher than maximum demand, should we use: Pro rata? Auctions? Question 5 Question 4 Views on the payment? Which of the two products do you prefer? 11 December 2014 User Group 21

22 New Capacity in Ellund - Answers 1/2 1. What capacity do you prefer: Main conclusion Daily products - are enough for trading Monthly products - good for supply obligations Discussion included: Shipper: Cannot see that there is a need for this product Energinet.dk: How can a new shipper come into the Danish market, if no firm capacity is available? Shipper: Not a problem, possible to buy interruptible capacity it is not likely to be interrupted. Energinet.dk: Referring to the work of the EU commission: Although the individual shippers' preferences differ, during the Public Consultation the stakeholders generally agreed that in order to be able to compete for customers, they need firm long term capacity rights. [Commission staff working document (on CMP), Brussels , p. 5] 2. What is the preferred option (TSOs to control nomination)? No real feedback 3. If there is a need to restrict the volume of the product, which method should be used? Main conclusion Auctions the lowest bids win Discussion included: Shipper: Preference for simulations auctions, where the size of the flow commitment acquired (southbound flow) is determined by the size of the Ellund (DE) demand (capacity for northbound flow). Energinet.dk: This is a good suggestion, but not possible to implement in practice. A TSO cannot sell firm capacity which it does not have. It therefore needs to acquire the firm capacity prior to selling it. 11 December 2014 User Group 22

23 New Capacity in Ellund - Answers 2/2 4. Views on proposed payment? Main conclusion CFNR does not move gas, therefore should no volume tariff be applied Concerns on who shall pay, if this does not lead to new Ellund revenue ( DK) Discussion included: Shipper: There are two different products, therefore should there be two different prices. Shipper: The CFNR product is designed to cancel a Northbound gas flow already nominated by the shipper. Danish entry capacity has already been paid for and CFNR sees to that no gas is moved, therefore no further costs should apply - neither capacity, nor volume tariff. 5. Which of the two products do you prefer? Main conclusion Some say YES to both products want a choice Some say NO to both products Discussion included: Shipper: Why not offer both products? This gives a choice for the shipper to select the product which best suits this situation. Creates more opportunities in the market. Shipper: Another way to create available firm capacity on the German side is to have Open Season contract holders to sell some of there capacity. 6. Should new products be applied on other locations? Main conclusion No direct reply, probably most relevant in Ellund Comments are welcome planed to be sent to DERA on the 15 th of January December 2014 User Group 23