Locational Spread: a market mechanism

Locational Spread: a market mechanism

Context The locational spread arises from the works with shippers during the construction of the Single Marketplace, within the Concertation Gaz working group. This mechanism was successfully used to solve the Southeast congestion, from this winter 2017/2018. On next November 1 st, the modalities of the locational spread will be fitted out to manage the residual limits of the single zone. 2

Locational Spread : the main mechanism selected for management of the residual limits Merit order of mechanisms selected for management of the residual limits (délibération de la CRE du 26/10/2017) : 1. Agreements with adjacent operators 2. Interruption of interruptible capacities on D-1 and D-Day 3. Non- trading of unsubscribed capacities on D-1 and D-Day 4. Locational Spread : call to the market 5. Mutualised restriction of nominations : last resort 3

The main principles Main + mechanism for management of the residual limits Optimised cost : activate only when a proven limit is reached and only for the quantity necessary to resolve the limit Market product, relying on the gas stock exchange with a twofold within-day locational product: + Purchase by GRTgaz downstream of the limit And simultaneous sale of the same quantity by GRTgaz upstream of the limit > This amounts for the TSOs to buying a spread Extension to CCGTs being studied GRTgaz Vers la création de la zone unique 4

A flexible mechanism for shippers + + A flexible mechanism for shippers : answers by the shippers, via a call for tenders, for the purchase, sale, or both, for the quantities that they choose Neutral impact of the locational spread on the balancing of the selected shipper (the PEG nomination balances the physical nomination) Locational Spread is non-discriminatory and transparent 5

Notification Functioning on November 1 st 2018 Call for tenders continuity Information by GRTgaz (email) at least 30 min before offers selection Direction and Powernext Products Requested volume (MWh/d at 25 C) Contractual point(s) requested by GRTgaz Offers submission Before H+30 Possibility for the supplier to submit offers (no obligation) on the Plateform Any offer of the supplier displayed on the Powernext Locational Plateform is firm and final (but can be modified until selection is done) Offers selection 1 2 3 Example of a consultation for NS2 limit: The offers are ranked by ascending price order Offers are selected by GRTgaz based on price criteria upon selection Then, on selected shipper s side Nominations of the locational quantity Max Full Hour after the transaction on Powernext Nomination on PEG against ECC (counterparty GFBRSP): in opposite direction of the nomination on the chosen point Nominations on the chosen point (pair of usual shippers code) No re-nomination on the chosen point in opposite direction After the notification email sent by GRTgaz about locational need Obligation regarding nominations on the opposite direction of locational quantity Notification of the locational point to GRTgaz By email according to the template before the end of the day Selected shipper must possess adequate available capacity, corresponding to its offer, at least on one of the contractual points requested by GRTgaz Selected shipper: SHIPPER (contract s code: GFSHIP) Initial nomination at PITS Nord-Est = +5 550 MWh/d 4 6 5 7 1 Email notification by GRTgaz to the market of a locational need (H+5 to H+10) - Buying of 15 000 MWh/d 3 Offers selection by GRTgaz between H+30 and H+40 Shipper: +3 000 MWh at 20 /MWh 2 Until H+30: Shippers submit offers on the Powernext screen Shipper: +4 000 MWh at 20 /MWh 4 5 No later than Full Hour +1 : - Shipper nominates: 1/ - 3000MWh on PEG Nord against GFBRSP 2/ + 3000MWh on PITS Nord Est (code GFSHIP) nomination increases to +8 500MWh/d - Shipper can t decrease its nomination on PITS Nord-Est after GRTgaz needs notification email. However, Shipper can still increase its nomination 6 7 No later than Full Hour +2 : - Shippers Nominations are programmated Before the end of the day: Shipper sends an email to notify the delivery point to GRTgaz: +3 000 MWh at 20 /MWh on PITS Nord-Est

Locational Spread s evolutions on November 1 st 2018 For a locational spread started at the hour H : changes in green Consultation As a reminder : winter 2017/2018 On November 1 st 2018 Type of notification Mail Mail Time H+5 to 10min H+ 5 to 10 min Window of intervention 9am, 1pm and 4pm Every cycles in WD Preference between 8am and 8pm (hour of consultation sendding) Maturity of offers Only WD WD Offer / Intervention Reference for the physical movement Maturity of Intervention Only WD WD Unity MWh/d MWh/d Term of submission of tenders > 30 min 20 min : before H+30 Type of intervention Manual Automatic (robot) Time of renomination > 1h 20 min Notification time of the locational point Reference value 30 mn Before the end of the gas day Nomination (H) et Programmation (H+2) Programmation (H) Control value Programmation from H+4 Programmation from H+3 Control typology By Point By point 7