The European Regulatory Regime for Balancing 3rd package

Transcription

1 Balancing and imbalance regimes gas international experiences and national perspectives Conference BNetzA/WIK The European Regulatory Regime for Balancing 3rd package Nina Grall European Commission DG Energy and Transport

2 Content Overview European regime for balancing Does it exist? Shortcomings results DG COMP Sector Inquiry and EC Progress Report What is needed? Market requirements Market size 3rd package Outlook on balancing

3 Content Overview A European regulatory regime for balancing Does it exist? Shortcomings results DG COMP Sector Inquiry and EC Progress Report What is needed? Market requirements Market size 3rd package Outlook on balancing

4 Legal Framework 1 Directive (EC) 2003/55 Art 25 (2c) regulatory authorities responsible for fixing or approving prior to their entry into force: at least the methodologies used to calculate or establish the terms and conditions for the provision of balancing services Regulation (EC) 1775/2005 Art 7 - requirements General: Fair non-discriminatory transparent based on objective criteria reflect genuine system needs taking into account the resources available to the transmission system operator If not non-market based: tolerance levels shall either reflect seasonality (or higher), reflecting genuine system needs Imbalance charges: cost-reflective to the extent possible providing appropriate incentives on network users to balance their input and off take of gas avoid cross-subsidisation not hamper the entry of new market entrants

5 Legal Framework 2 Regulation (EC) 1775/2005 Art 7 requirements (ff) Penalty charges possible: on network users whose input into and off take from the transmission system is not in balance according to the balancing rules not reduce the interest in balancing to be approved by the competent authorities Transparency: final tariffs calculation methodology for imbalance charges well-timed and reliable on-line based information on the balancing status of network users Harmonisation: MS shall ensure that TSOs endeavour to harmonise balancing regimes and streamline structures and levels of balancing charges in order to facilitate gas trade

6 European Balancing Regime /Shortcomings Sector Inquiry 1/ 1. Too small balancing zones Barrier to competition: small zones smaller portfolios higher risk of imbalances and onerous penalties 2. Too numerous balancing zones Fragmentation increases complexity of shipping gas higher cost Barriers resulting from the need to reserve capacity at each border point entering/leaving a balancing zone LINKED: constraints of capacity allocation mechanisms Partial remedies: eg possibility of cross-zonal capacities (GRTgaz, Fluxys, E.ON Ruhrgas) 3. Unequal costs for newcomers and incumbants 4. Differences in gas quality 5. Unharmonised balancing rules accross borders

7 European Balancing Regime /too small balancing zones/ Source: Energy Sector Inquiry 2006, Full Report part 3, Table 37

8 European Balancing Regime /too numerous balancing zones/ Ration between smallest and biggest zone 1:278 1:40 if corrected for the smallest zones (specific LL gas situation) and the largest (major cross border relevance) Source: Energy Sector Inquiry 2006, Full Report part 3, figure 76

9 European Balancing Regime /Shortcomings Sector Inquiry 2/ 6. Entry barrier hourly balancing Especially for new suppliers as requiring very accurate follow up of flows 7. Unharmonised nomination rules 8. Balancing charges are non-transparent and favour incumbents 8.1 Clearing cost are not cost reflective TSOs first use linepack and usually are able to balance the system between from short/long users Beyond that TSOs enter in a trading role: 1 spot market 2 longer gas term procurement (usually signed with the incumbant in a non transparent way) 3 storage Clearing costs have to reflect the costs occured with the TSO

10 European Balancing Regime /Shortcomings 3/ 7.2 Penalties Used to reflect costs but also deter shippers from positions that jeopardise network operation difficult to differentiate between deterring imbalance and deterring market entry Need to reflect the level of pentalties against the alternative cost of reserving network capacity Differences in ratio <total penalties compared to total network charges> Preferential treatment of incumbants monitored Source: Energy Sector Inquiry 2006, Full Report part 3, figure 79

11 European Balancing Regime /penalties/ While penalty levels are to deter shippers from taking positions that jeopardize the network operation, imbalance charges should not in general increase the TSOs profits Source: Energy Sector Inquiry 2006, Full Report part 3, figure 79

12 European Balancing Regime /daily vs hourly balancing/ Source: Energy Sector Inquiry 2006, Full Report part 3, table 38

13 European Balancing Regime /nomination rules/ Source: Energy Sector Inquiry 2006, Full Report part 3, table 41

14 Content Overview A European regulatory regime for balancing Does it exist? Shortcomings results DG COMP Sector Inquiry and EC Progress Report What is needed? Market requirements Market size 3rd package Outlook on balancing

15 What is needed? Relevance of flexibility Impact on the wholesale market: where the balancing system is not market based, shippers have to buy gas from or sell gas to the TSO Shortcomings result in higer barriers for newcomers and for small entrants Lack of portfolio effect Higher uncertainties in forecast Remedies priorities More favourable, market based and cost-effective envionment Improve predictability for shippers transparency Harmonisation of nomination rules Reduction of the number of balancing zones

16 Content Overview A European regulatory regime for balancing Does it exist? Shortcomings results DG COMP Sector Inquiry and EC Progress Report What is needed? Market requirements Market size 3rd package Outlook on balancing

17 3rd Package Measures on Balancing 1. Market based balancing rules obligatory (Art 7 Gas Regulation) Spot market or tendered gas term procurement 2. Improved transparency in order to allow TSOs timely corrective actions (Art 7 Gas Regulation) TSOs shall provide information on the balancing status of users sufficient, well-timed and reliable and online based Information shall reflect the level of information available to the TSO and the settlement period for which imbalance charges are calculated Without charge TSOs shall make public ex-ante and ex-post supply and demand information, based on nominations, forecasts and realised flows in and out of the system TSOs shall make public measures taken as well as costs incurred and revenues generated to balance the system

18 3rd Package Measures on Balancing 3. Possibility for annexed guidelines (Art 9 Gas Regulation) 4. TSO cooperation with a view to harmonise across border (GTEplus) Develop technical codes and standards inter alia on balancing

19 Thank you for your attention! Contact: Nina Grall European Commission DG Transport and Energy C2 E nina.grall@ec.europa.eu