Implementation of Network Codes: ACER Monitoring and SSE GRI State of Play

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Implementation of Network Codes by ACER involves monitoring activities related to Congestion Management Procedures, Capacity Allocation Mechanisms, and Balancing. The process includes drafting guidelines, incorporating codes into national provisions, data collection, analysis, and reporting. Legal background and work streams for monitoring are defined based on Gas Regulation requirements.

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Implementation of the Network Codes: ACER monitoring and SSE GRI state of play Dennis Hesseling, Riccardo Galletta, ACER 21stStakeholder Group meeting, SSE GRI Bucuresti, 13 December 2016

Outline Agenda ACER s monitoring activity Congestion Management Procedures Capacity Allocation Mechanisms Balancing Conclusion DISCLAIMER: The opinions expressed in this presentation do not necessarily represent the official views of the Agency. 2 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Moving to next phase in Network Code process Monitoring Implementation Development Drafting Framework Guideline Drafting Network Code Voting Network Code Incorporating NC into national provisions Applying national provisions Data collection Implementation analysis Effects analysis Drafting implementation monitoring report Activities ACER ENTSOG EC, Member States NRAs TSOs ACER ENTSOG Actors 3 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Legal background The legal basis of NCs implementation monitoring Art. 9.1 of Gas Regulation: ACER to monitor & analyse NCs/GL implementation + effect on harmonisation of applicable rules to facilitate market integration, non- discrimination, effective competition and effective functioning of the market and report to the EC Art. 8.8 of Gas Regulation: ENTSOG to analyse & monitor NCs/GL implementation and their effect on the harmonisation of applicable rules aimed at facilitating market integration Art. 8.9: make information available to ACER 4 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Work-stream of implementation monitoring An inclusive, articulated process Shared exercise between ACER and ENTSOG Questionnaires, on all topics (CMP, CAM, BAL) agreed Respondents: NRAs and/or TSOs Data analysis and calculation of indicators Data provided by ENTSOG Transparency team and downloaded from booking platforms Indicators calculated by ACER Agency s reports published on: CMP: 21 September 2016 CAM: 27 October 2016 BAL: 7 November 2016 The Agency is preparing the 2017 editions 5 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

CMP implementation in SSE EU MSs CMP Implementation Monitoring (Update 2016 status as of 6/2016): MS CMP IMPLEMENTATION CZ EL SI SK PL HR AT HU IT RO BG FDA FDA FDA OS&BB/FDA SURRENDER LT UIOLI Key: Abbreviations: timely implementation by 1.10.2013 CMP: Congestion Mangement Procedures Late implementers OS&BB: Oversubscription & Buy-back Not yet implemented FDA: Firm day-ahead Use-it-or-Lose-it LT UIOLI: Long-term Use-it-or-Lose-it FDA FDA in the design phase MS: Member State Data sources: ACER survey (2014,2016), ENTSOG survey (2016) 6 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

CMP capacity made available in 2015 7 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Analysis of contractual congestion Capacity made available and contractual congestion Beyond incomplete implementation and scarce application of CMPs the Agency s analysis showed contractual congestion at certain IPs in the SSE region SSE EU MSs GRI COUNTRIES The Agency, after the results of a call for evidence on congestion indicators, is considering to propose providing more flexibility to NRAs regarding FDA UIOLI application - Of which MSs with contractually congested IPs 3 8 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Implementation of CAM NC, SSE GRI CAM: implementation monitoring map CAM implementation monitoring highlight Average overall implementation reaches 75% in SSE EU MSs rest of EU: 90% Only BG scores below 60% High Low 2 9 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

CAM: implementation monitoring summary MS NC CAM chapters I. General II. Princinples of Cooperation Average chapter per HU RO BG HR AT CZ SK PL EL IT SI no scorable provisions monitored 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% III. Allocation of Firm Capacity IV. Bundling of Cross- Border Capacity V. Interruptible Capacity 90% 100% 70% 80% 80% 90% 100% 89% 100% 88% 100% 90% 66% 66% 0% 100% 66% 33% 66% 100% 66% 100% 33% 100% 80% 92% 22% 91% 92% 58% 50% 100% 92% 92% 100% 92% VI. Tariffs & Capacity Booking Platforms 88% 100% 0% 100% 100% 100% 100% 100% 100% 66% 100% 100% Total average score 82% 28% 84% 78% 66% 73% 88% 82% 79% 77% 86% 75% 10 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

CAM: implementation monitoring highlights SSE EU MSs Bundled Day-ahead capacity offered and sold at PRISMA in 2013-2015 SSE EU MSs: Bundled Day-ahead capacity offered and sold at PRISMA in 2013-2015 GWh/h GWh/h 5,000 30,000 4,000 3,000 20,000 2,000 10,000 1,000 2.3% 1.6% 2.2% 2.7% 1.4% 0.2% 0 0 2013 2014 2015 2013 2014 2015 Offered capacity Allocated capacity Offered capacity Allocated capacity Bundled Month-ahead capacity offered and sold at PRISMA in 2013-2015 SSE EU MSs Bundled Month-ahead capacity offered and sold at PRISMA in 2013-2015 No allocation on MA bundled capacity GWh/h GWh/h 100 1,000 80 800 600 60 400 40 200 20 3.9% 2.1% 2.8% 0% 0% 0 0 2013 2014 2015 2013 2014 2015 Offered capacity Allocated capacity Offered capacity Allocated capacity 11 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Balancing: implementation monitoring summary Implementation clusters: three different timings By 1 October 2015 By 1 October 2016 By 1 October 2019 (Interim Measures) 1 12 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Balancing: implementation monitoring summary Average implementation rate by countries Implementation rate 70-80% 50-70% below 50% SSE GRI EU MSs SI AT EL HU IT RO CZ HR BG PL SK At EU level, UK, FR, BELUX and DK reached implementation level of 85-100% 13 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

BAL NC market enablers BAL NC: implementation of market enablers All three market enabling features Two market enabling features Implementing of fundamentals requirements is not yet complete No market enabling features All three market enabling features Two market enabling features No market enabling features : information to support market development : access to flexible gas : access to network flexibility 2 14 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Conclusion [1/2] Summary of findings and conclusions on IMRs in SSE EU CMP Mechanisms implemented, except in a few MSs Limited CMP application not much capacity made available via CMPs Contractual congestion is still present in the region CAM Overall high implementation level (except BG) Improvement needed on dynamic recalculation and bundling Some MSs need to complete the implementation of provisions on interruptible capacity 15 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016

Conclusion [2/2] Summary of findings and conclusions on IMRs in SSE EU BAL Concentrate implementation efforts on market enablers Implementation levels can improve considerably in some MSs Balancing/Trading Platforms shall be created, where missing Interim measures have time limits, as follows: Only Balancing Platforms can go beyond 2019 April; Tolerances, interim prices cannot apply beyond 2019. These tools can support market development now and not later. If balancing regimes miss several design elements, these supporting tools would contribute less to the development of the short term markets, as intended. OVERALL The NC implementation in SSE GRI MSs is weaker than in other EU MSs (with important delays in BG, EL and RO) Knowledge sharing and increasing dialogue in the EU may facilitate effective implementation 16 21st Stakeholder Group meeting, SSE GRI Bucharest, 13 December 2016