Transcript III.1. CAM harmonisation proposal

CAM PROPOSAL FOR
HARMONISATION
14th SG meeting
Madrid
11th July 2011
Index
1. Introduction
2. Proposal
2
Introduction
3
Introduction

In the 15th IG meeting of the S-GRI that took place last 19th October 2010,
REN and Enagás were asked to start working in the harmonisation of the
Capacity Allocation Mechanisms (CAM) between Portugal and Spain
according to what is being discussed in Europe.

The mandate includes two parts:
1. Detailed description of current CAM in Portugal and Spain.
2. Proposals for harmonisation.

It should be borne in mind that the FG on CAM only applies to cross-border
IPs.
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Proposal
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Main principles
PRODUCT

Service duration of a calendar month or a combination of several months up to a
maximum of 12 months.

Bundled firm capacity to be sold. This means that:

The corresponding entry and exit firm available capacity at both sides of an IP will
be offered and allocated through a single procedure.

Different contracts will be subscribed with each TSO.

The same shipper entity will need to be registered in both countries.
UNITS AND GAS DAY

Capacity will be offered and contracted in kWh/day.

The final goal is to standardise the gas day from 5:00 to 5:00 UTC. However, during
an interim period other harmonised gas day, if approved by NRAs, could be
implemented.
BOOKING TOOL

The final goal is to develop a common tool in order to organize the allocation
procedure. However, during an interim period TSOs might make available other
means to ensure coordination.
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Capacities to be offered
PERIOD

The intention is to hold the initial auction in 2012 in order to allocate capacity
from 1st October 2012 to 30th September 2013 (12 months).
CAPACITIES TO BE OFFERED

The capacity figure for this product shall be defined according to the
available capacity above existing ToP contracts and or Long Term capacity
contracts (more than one year) on both sides of the IP.

The final decision will be made once the Operating Manual currently under
revision by REN and Enagás is approved.
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Allocation methodology

Capacity will be allocated through volume-based cleared price auctions.

The reserved price shall incorporate the regulated tariff agreed by the NRAs

Capacity will be available for bidding on multiple months ahead within one
bidding window.

Depending on the various capacity needs shippers will be able to place bids
either for each month auctioned or only for some of them. However, each
month will be allocated independently.
Source: ENTSOG
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Bidding window

The bidding window will last 5 working days. During this period shippers will
be allowed to submit bids and to withdraw or modify bids previously
submitted.

At the end of each day, TSOs will publish the aggregated results of the
bidding information. No provisional interim allocation will be performed at the
end of each bidding day.

Capacity will be allocated only after the final bidding window closes.

No clock auction, no rounds (as proposed by ENTSOG in the draft NC).
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Bid information

Each bid shall specify:
 the identity of the network user applying;
 the concerned Interconnection Point and direction of the flow;
 the month for which the capacity is applied for;
 per price-step, the amount of capacity for the respective month applied
for; and
 per price-step, the minimum amount of capacity for the respective month
which the network user is willing to be allocated.
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Volume-Based Cleared-Price Auction

TSOs shall provide a price range of 30 price steps, starting at the reserved
price P0.

Network users shall only be allowed to submit one bid per price step.

All bidders shall submit a bid at price step P0.

Each bid quantity at P1 and subsequent steps shall be equal to or less than
the bid quantity at the previous price step.

TSOs shall aggregate the demand per price step

The clearing price is defined as price of the lowest successful bid. All
successful bids shall be deemed payable by the network users at the
clearing price.

If the total demand exceeds available capacity at the maximum price step, at
that price step the demand shall be pro-rated proportionally to the individual
bid quantity.
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Volume-Based Cleared-Price Auction

All bids at the highest price (Px) for which total demand is higher than or
equal to the available capacity offered shall be allocated.

For the final allocation the following steps shall be taken into account:
1. If network users have bid at the subsequent price-step (Px+1)

all capacity requested at Px+1 shall be allocated,

capacity requested at Px minus capacity already allocated at Px+1
shall be allocated by pro-rata proportionally to the individual bid
quantity at Px
2. If network users have not bid at the subsequent price-step (Px+1) 
capacity requested at Px shall be allocated by pro-rate proportionally to
the individual bid quantity at Px
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Thank you for your attention!