The Dutch Balancing Regime

Transcription

1 1 The Dutch Balancing Regime Bonn, 1 October 2007 Robert Spencer Head of Wholesale Markets Office for Energy Regulation DTe / Dutch Competition Authority

2 Historical perspective 2 Dutch gas infrastructure dimensioning traditionally determined by the Groningen field Jan 1999 Start liberalisation Dutch gas market CDS system Asymmetrical entry-exit regime 2006-present Hybrid entry-exit regime 200? Daily balancing? Growing market participation

3 TSO provides sufficient capacity Amount of tolerance determined by: Entry Line-pack Time-shift: T = T + 2 Exit Entry- Exit System (Black Box) Σ Entry Σ Exit Amount of back-up flexibility required determined by: Tolerance Historical shipper behavior Shipper behavior influenced by: Charges (stimulate middle of the road balancing) Commercial opportunities

4 Shipper balances entry with exit 4 Dutch Balancing Regime T=T+2 Three balancing bandwidths depending on portfolio size (Shippers with Large portfolios get relatively less tolerance bandwidth compared to smaller shippers) Tolerance Hourly, cumulative margin (according to portfolio size) and daily margin; Imbalance Charges Extra charge based upon day-ahead spot price (on top of commodity) Tools to manage your position Steering information and line-pack monitor (not yet available) Flexibility products Bought from GTS (As long as GasTerra is pronounced dominant)

5 Illustration: GTS Balancing Regime 5 Example for a large portfolio 36% Cumulative imbalance Daily imbalance Equals zero 22,8% Balance position 5,7% 0 5,7% Hourly tolerance Realised hourly flows 22,8% 36% Cumulative tolerance Daily tolerance Hourly imbalance

6 NL Balancing: The Regulators Perspective 6 The balancing regime is subject to all regulatory aspects, but the following aspects are especially of interest for the balancing regime: System integrity Transparent Efficient use of network Easy to use Cost efficiency Involves shippers & TSO Facilitates free market Cost reflective Efficient use network user

7 Comparison of the Balancing Regimes 7 CSS Asymmetrical entry-exit regime Hybrid entry-exit regime ? Efficient use network System integrity Cost efficiency Free market User friendly

8 Current Developments 8 The new balancing regime should help market participants to trade while helping to maintain system integrity. Timely Information Improve timely metering information; Improve information on the line-pack status. User friendliness and EU integration? Evaluate shift from hourly balancing system to day balancing system in order to enable shippers to seize trading opportunities; Commercial measures to optimise network usage? Create possibility to (partially) interrupt end users; Create special contracts with shippers to prevent overdraw quality conversion, in order to maintain one integrated H- and L-cal network.

9 Near-term Ambition 9 A market-facilitating balancing regime should have at least the following components The tools to manage your imbalance Flexibility products (incl. intraday) Timely and accurate Information (metering and line-pack data) As much tolerance as the system can safely deliver (at reasonable cost) A positive incentive and the means for network users to help ensure system-balance at a market price Should not hamper cross-boarder trade Penalties less relevant Shippers trade their imbalance

10 10 Back-up Slides

11 Imbalance tolerance 1/2 11 Tolerance levels of the Dutch balancing regime are annually evaluated by GTS. GTS determines technical available and virtual buffer and divides it among shippers depending on portfolio size. 50% extra virtual buffer through netting and asynchrony 3 categories with different tolerance values for shippers with small, medium and large portfolios.

12 Imbalance tolerance 2/2 12 Portfolio size Hourly tolerance Linear decrease in Cumulative tolerance Daily tolerance Temperature tolerance from 0 C to Linear decrease in independent 2% at -17 C tolerance from 0 C to 4% at -17 C < m3/h 26% 104% 36% of contracted hourly capacity m3/h 12,8% 51,2% > m3/h 5,7% 22,8%

13 Surcharges 13 If imbalance level exceeds tolerance values GTS will impose an imbalance surcharge. These surcharges differ for nature of imbalance. At the end of the day the difference of realised entry and realised exit will be cashed-out In case of a shortage shippers have to pay the highest price of one the following indices: TTF day-ahead, Zeebrugge day-ahead, or NBP intraday. In case of a surplus shippers receive the lowest price of one the following indices: TTF day-ahead, Zeebrugge day-ahead, or NBP intraday.

14 Overview of surcharges 14 Type of imbalance Hourly surplus Hourly shortage Cumulative imbalance Daily imbalance Surcharge (10% of APX-TTF day-ahead price) x (hourly imbalance volume) (15% of APX-TTF day-ahead price) x (hourly imbalance volume) (100% of APX-TTF day-ahead price) x (largest imbalance volume during the day) (100% of APX-TTF day-ahead price) x (imbalance volume at end of day)