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1 Madrid, 30 th January 2013 18 th SG Meeting South Gas Regional Initiative

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18 th S G Meeting South Gas Regional Initiative. Madrid, 30 th January 2013. Agenda. II. Capacity Allocation Mechanisms. II.1. Draft Roadmap for Capacity Allocation Mechanisms (CAM Roadmap) II.2. NW Capacity Allocation Platform II.3. Improvements in the SP-PT CAM - PowerPoint PPT Presentation

TRANSCRIPT

Page 1: Madrid, 30 th  January 2013

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Madrid, 30th January 2013

18th SG Meeting

South Gas Regional Initiative

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Agenda10:30-10:40 I. Opening

I.1 Welcome

I.2 Agenda and minutes from the last meeting (for approval)

10:40 – 11:45 II. Capacity Allocation Mechanism

II.1 CAM Roadmap (for information by Regulators)

II.2 North West Capacity Allocation platform (for information by TSOs)

II.3 Improvements in the Sp-Pt Allocation of capacity (for information by

TSOs)

II.4 2012 OSP Short-Term Capacity between Spain and France (for

information by TSOs)

II.5 Next steps and calendar (for discussion)

11:45-12:45 III. Congestion Management Procedures

III.1 CMP Roadmap (for information by TSOs)

III.2 Next steps and calendar (for discussion)

12:45-13:00 IV. Ten-Year Network Development Plan and Project of Common Interest

(PCI)

IV.1 Update on PCI Identification (for information by Regulators)

13:00-13:30 V. Proposal of models for the integration of the Spanish and Portuguese gas

markets in an Iberian natural gas hub (for information by Regulators)

13:30-13:45 VI. Review of actions considered in the Work Plan 2011-2014 (for discussion)

13:45-14:00 VII. AOB and next meetings

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II. Capacity Allocation Mechanisms

Area of work Responsible Starting Deadline

OSP France-Spain: annual allocation of short-term capacities

TSOs Nov. (yearly)

Dec. (yearly)

CAM harmonisation proposal (CAM pilot testing Sp‐Pt borders)

NRAs-TSOs Jan. 2011 Jun. 2012

CAM harmonisation proposal in the whole region NRAs-TSOs Jan.2012 Dec.2013

Set up a common TSO Allocation Platform TSOs Jan.2014 Dec.2014

II.1. Draft Roadmap for Capacity Allocation Mechanisms (CAM Roadmap)

II.2. NW Capacity Allocation Platform

II.3. Improvements in the SP-PT CAM

II.4. 2012 OSP between SP-FR

II.5. Next steps and calendar

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II. Capacity Allocation Mechanisms

II.1. Draft Roadmap for Capacity Allocation Mechanisms

(CAM Roadmap)

• ACER/ENTSOG CAM Roadmap for Europe (for information

by ACER)

• CAM Roadmap for SGRI (for information by NRAs)

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for South Gas Regional Initiative

GOAL: early implementation of the provisions from the CAM NC

In line with the Roadmap for the early implementation of the CAM NC,

developing by ACER and ENTSOG.

Coordinated CAM in the Region FRANCE-PORTUGAL-SPAIN in 2014

PRODUCTSCALENDAR

REGULATORY NEEDS IT SYSTEMs

1 2 3

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

Capacity product definition and calendar (I)

Main issues to be decided:

• Bundled/Virtual products to be offered

• Standard capacity products to be prioritised

• Capacity reserved for each product

• Allocation calendar for 2014 and onwards

• IP where the products will be allocated (physical or virtual points)

• Coordination CMP-CAM

1

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

Capacity product definition and calendar (II)

• Definition of available bundled capacity for the next 15 years (Oct

2014...), agreement on the split of capacity (Q, yearly, 15 years

• VIP or two IP ?

• Common criteria on: unbundled / interruptible / backhaul

• Monthly capacity products have been allocated by OSP until 31st

March 2014

• Capacity products to be offered before March 2014 for the period April

2014-September 2014. Proposal: Maintain prorate or new CAM NC?

1

SPAIN-FRANCE (I)

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

Capacity product definition and calendar (III)

Proposal of Auctions:

• Annual quarterly capacity auction in June 2014: first Q capacity

products from Oct 2014 to Sept 2015 (Q1-Q4) ---- common platform

• Rolling monthly auction in Sept 2014 ?

• Daily auctions from October 2014 ?

• Annual yearly capacity auction in March 2014/2015: first yearly

capacity products from Oct 2014/2015 (Y1-Y15)

1

SPAIN-FRANCE (II)

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

1 Capacity product definition and calendar (IV)

• Definition of available bundled capacity for the next years (Oct

2014...), agreement on the split of capacity (Q, yearly, 15 years), Longest

allocation period = 1 year ?

• VIP

• Common criteria on: unbundled / interruptible / backhaul

• Yearly and Monthly capacity products have been offered by auction in

June 2012, from Oct 2012 to Sept 2013

• To be decided: Quarterly capacity product could be offered in June 2013

(Oct 2013-Sept 2014) the same methodology than last year? Yearly capacity

product in March 2013?

SPAIN-PORTUGA L (I)

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

1 Capacity product definition and calendar (V)

Proposal of Auctions:

• Annual quarterly capacity auction in June 2014: Q capacity

products from Oct 2014 to Sept 2015 ----- common platform for

the first time

• Rolling monthly capacity auction Sept 2014 ?

• Daily auctions from October 2014 ?

• Annual yearly capacity auction in March 2014/2015: first yearly

capacity products from Oct 2014/2015, for one year?

SPAIN-PORTUGA L (II)

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II. Capacity Allocation MechanismsII.1. CAM Roadmap for SGRI

1

Annual yearly auctions: 1st Monday of March / Y1: 1st Oct-31st SeptAnnual quarterly auctions: 1st Monday of June / Q1: 1st Oct-1st Jan.Monthly capacity auctions: 3rd Monday of each monthDaily auctions: 16.30 CET D-1

… 2013 2014 2015 2016 2029 …

Se Oc No De Ja Fe Ma Ap Ma Ju Ju Au Se Oc No De Ja Fe Ma Ap Ma Ju Ju Ag Se Oc

Prorata allocation

SP -FR

Annual yearly capacity auctions

Annual quarterly capacity auctions

Rolling monthly capacity auctions

Rolling day ahead capacity auctions

Within -day capacity auctions

AuctionSP -PT

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

Regulatory needs (I)Auction mechanism as a default CAM in the interconnections

Moving towards bundled and virtual capacity

Harmonizing the capacity products and timeframes

New regulation need to be consistent with European NC:• CMP NC

• Balancing NCo Agreement on nomination and renomination schemes

• Interoperability and Data Exchange NCo Harmonization of gas day / gas year- 2014

o Temperature to measure gas- 2014

o Units used to allocate capacity and sign contracts- 2014

• Tariffs NC:o Reserve price

o Price to be paid by subscribers during all the contract life

2

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

Regulatory needs (II)To be discussed:

• Shipper license to participate in auctions process, allowing the same shipper to book unbundled capacity. Qualification steps.

• Price steps definition and allocation of revenues arising from the auction among TSOs

• Release of information to the market. Calendar

• Capacity contracts: obligation to subscribe the capacity allocated in the auction, timing, financial deposit...

• Responsibilities of TSOs (implementation) and NRAs (supervision)

• Secondary capacity market: bundled virtual capacity to remain as allocated in the auction

• Coexistence of old and new contracts

2

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

IT System

To develop a single platform to allocate capacity: Best available technologies, functionalities, secure, smooth exchange of information

Calendar to join European Capacity Platform by TSOs in the SGRI

TSOs to develop its own IT system to integrate the information from the capacity auctions

TSOs to collaborate bilaterally to develop IT systems for nomination and renomination of bundled capacity, CMP implementation, exchange information for balancing process.

3

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II. Capacity Allocation Mechanisms

II.1. CAM Roadmap for SGRI

Way forward

Further discussion on this draft Roadmap with TSOs - ASAP

Public consultation of this document with Stakeholders- February 2013

Final CAM Roadmap of the SGRI – March 2013

Discussions and definition of the capacity products, available capacity and IT systems– April/May 2013

Start of the implementation of IT systems –Summer 2013

Start of proposing national regulation modification – Summer 2013.

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II.2. North West Capacity Allocation Platform

(to be presented by

Platform member)

II. Capacity Allocation Mechanisms

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II. Capacity Allocation Mechanisms

II.3. Improvements in the Spain-Portugal allocation of capacity

(to be presented by TSOs)

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• Enagás and REN will develop a similar procedure than the previous year.

• The intention is to carry out the auction process during the 2Q, earlier than the previous year.

• Enagás and REN suggest to open a short period for comments on top of the consultation already held in October.

• Enagás and REN will jointly study the possibility to adapt the products to the NC on CAM subject to the approval of NRAs.

II. Capacity Allocation MechanismsII.3. Improvements in the Spain-Portugal allocation of capacity

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II.3. Improvements in the SP-PT CAM (I)

Capacity Products to be offered for the gas year 1st Oct 2013 to 30th Sept 2014:

• Firm yearly products

• Firm quarterly products

• Interruptible products if less than 95% of firm capacity has been allocated at the

previous firm products auctions.

IT system to allocated capacity to shippers

II. CAM

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II.3. Improvements in the SP-PT CAM (II)

Annual Transmission Capacity Auction will take place in June 2013.

National regulations to be aproved in advance in order stakeholders

will be timely informed:

• Resolución CNE on methodology for the coordinated capacity allocation at

the IP between Spain and Portugal.

• Mecanismo de atribuição de capacidade da RNTGN - ERSE

• Information Memorandum and Standard Contracts: to be elaborated by

TSOs describing the procedures for the annual auction (following the Draft

CAM NC): rules, price steps, reserve price, capacity offered, application

form, contract information, calendar…. To be approved by NRAs.

II. CAM

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II. Capacity Allocation Mechanisms

II.4. 2012 OSP ST Capacity between Spain and France

(to be presented by TSOs)

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II. Capacity Allocation Mechanisms

II.5. Next steps and calendar

(for discussion)

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III. Congestion Management Procedures

Area of work Responsible Starting Deadline

CMP harmonization proposal between SP-FR

NRAs-TSOs Jan. 2011 Dec. 2012

CMP harmonization proposal between SP-PT

NRAs-TSOs Jan. 2012 Jan. 2013

III.1. CMP Roadmap (for information by TSOs)

III.2. Next steps and calendar (for discussion)

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III. Congestion Management Procedures

III.1. Draft Roadmap for Congestion Management Procedures

(CMP Roadmap)

(for information by TSOs)

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III.2. Next steps and calendar

(for discussion)

III. Congestion Management Procedures

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IV. Ten-Year Network Development Plan and Project of Common Interest (PCI)

Area of work Responsible

Starting

Deadline

Regular update and publication in CEER website of project status of OS 2013 and 2015

TSOs - NRAs Dec. (yearly)

Jun. (yearly)

Creation of a working group in the region in order to test the process of PCI identification

NRAs-TSOs Apr. 2012 Dec. 2012

IV.1. Update on PCI Identification (for information by regulators)

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6th meeting held on 18 January: Previous meeting organized by EC with

NRAs with the aim to know NRAs’ opinion. Summary on NRAS’ opinion on

impact areas

• Main rule: a project must impact on at least two Member States to be eligible

• Clusters: projects considered in a cluster represent just one PCI.

• Presentation of analysis of qualitative and quantitative assessment carried

out by consultants, as well as a preliminary PCIs list

• Main comments from attendants: impact areas, quantitative assessment

(formulas application, parameters used, inputs, etc.). As a result, new

calculations are being considered and a new list will be elaborated

• Participants were given time to send their opinion on impact areas and clusters

Next meeting to be held in late February-early March

IV. TYNDP and PCIs IV.2 Update on PCIs identification (I)

North-South Gas Interconnections in Western Europe

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IV. TYNDP and PCIs IV.2 Update on PCIs identification (II)

North-South interconnections in Western Europe

1º G82 TWINNING OF SOUTHWEST SCOTLAND ONSHORE SYSTEM Interconnection2º G58 REVERSE FLOW SWITZERLAND-FRANCE SECTION Interconnection3º G56 REVERSE CAPACITY FROM FRANCE TO BELGIUM Interconnection4º G48 MERGING OF GRTGAZ NORTH AND SOUTH ZONES Internal project5º G103 CONNECTION OF MALTA TO THE EUROPEAN GAS NETWORK Interconnection6º G61 NEW IP TO LUXEMBOURG Interconnection7º G136 PHYSICAL REVERSE FLOW AT MOFFAT INTERCONNECTION POINT Interconnection

8º G133+135Physical reverse flow from Northern Ireland to Great Britain and Republic of Ireland via Scotland to Northern Ireland pipeline

Interconnection

9º G114 3RD INTERCONNECTION POINT PORTUGAL-SPAIN Interconnection10º G45 ARC DE DIERREY Internal project11º G6 BRETELLA (GERMANY

‐BELGIUM) Interconnection

12º G5 RERVERSE FLOW (SOUTH

‐NORTH) FROM SWITZERLAND TO GERMANY Interconnection

13º G44 NEW LINE BETWEEN CHEMERY AND DIERREY Internal project14º G7&8 LNG TERMINAL ZEEBRUGGE

‐ CAPACITY EXTENSION & 2ND JETTY LNG

15º G60 IBERIAN-FRENCH CORRIDOR: EASTERN AXIS-MIDCAT PROJECT Interconnection

Order according to total score

Project Code Project Name Type

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IV. TYNDP and PCIs IV.2 Update on PCIs identification (III)

North-South interconnections in Western Europe

16º G10 BELGIUM/ LUXEMBOURG Interconnection17º G91 CROSS BORDER BI-DIRECTIONAL FLOWS (ITALY - SWITZERLAND) Interconnection18º G96 BAGNOLO MELLA GAS STORAGE Storage19º G104 GAS COMPRESSOR OPTIMISATION PROGRAM IN NETHERLANDS Interconnection20º G47 DEVELOPMENT OF ENTRY CAPACITIES IN THE SOUTH ZONE OF FRANCE Internal project21º G93 GALSI PROJECT(Gazoduc Algérie – Italie) Interconnection22º G59 REVERSE FLOW FR-DE Interconnection23º G28 Monaco Pipeline Interconnection24º G85 OLT OFFSHORE LNG TOSCANA SPA LNG25º G94 BORDOLANO Storage26º G57 NORTH-SOUTH FRANCE TO SWITZERLAND CAPACITY INCREASE Interconnection27º G88 PORTO EMPEDOCLE LNG TERMINAL LNG28º G79 SOUTHWEST KINSALE GAS STORAGE EXPANSION PROJECT Storage29º G144 CARRIÇO UGS DEVELOPMENT (REN-C8 E REN-C10) Storage30º G53 LNG MONTOIR TERMINAL EXPANSION LNG

Order according to total score

Project Code Project Name Type

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IV. TYNDP and PCIs IV.2 Update on PCIs identification (IV)

North-South interconnections in Western Europe

31º G87 LNG Medgas Terminal LNG32º G52 LNG Fos Faster LNG33º G92 CORNEGLIANO UGS Storage34º G51 LNG FOS CAVAOU TERMINAL EXPANSION LNG35º G81 PHYSICAL REVERSE FLOW ON SOUTH NORTH PIPELINE (UK - IRELAND) Interconnection36º G78 KING STREET GAS STORAGE Storage37º G50 SALINS DES LANDES Storage38º G140 LES PINASSES UNDERGROUND GAS STORAGE Storage39º G80 Shannon LNG terminal LNG40º G54 Stublach storage Storage41º G113 UNDERGROUND STORAGE (UGS) CARRIÇO Storage42º G138 IBERIAN CORRIDOR: CROSS-BORDER OPTIMIZATION: EBRO VALLEY PROJECT Interconnection43º G46 ERIDAN Internal project44º G49 CONNECTING CORSICA TO GALSI (CYRENEE) Interconnection

Order according to total score

Project Code Project Name Type

G55 Peckensen storage Storage

G139PROJECT STUDY ON THE INTEGRATION OF POWER TO GAS (PTG) FACILITIES INTO THE GAS TRANSMISSION SYSTEM

Storage

Main projects affecting the Region

Non eligible projects

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V. Developing hub-to-hub trading in the South region

Area of work Responsible

Starting

Deadline

Hub development NRAs-TSOs-stakeholders

Jan.2013 Dec. 2013

Hub-to-hub gas trading in the region NRAs-TSOs-stakeholders

Jan.2014 Dec.2014

V. 1. Proposal of models for the integration of the Spanish and Portuguese gas markets in an Iberian natural gas hub

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V. Developing hub-to-hub trading in the South region

V. 1. Proposal of models for the integration of the Spanish and Portuguese gas markets in an Iberian natural gas hub

(for information by NRAs)

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MIBGAS

Models for the integration of the Spanish and

Portuguese gas markets in a common Iberian

Natural Gas HUB

Area of work Responsible

Starting

Deadline

Analysis of the possible models for the integration of the Spanish and Portuguese gas markets in a common Iberian Natural Gas HUB

NRAs 2013 Dec. 2013

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Analysis of the possible models for the integration of the Spanish and Portuguese gas markets in a

common Iberian Natural Gas HUB (National Market Areas, Regional Market Zones or Supra National Market),

analyzing the advantages and drawbacks, the regulatory harmonization requisites for its implementation and a

proposal roadmap for its entry into force

General Objetive

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Context: European Gas Target Model

.The 3rd package sets a new regulatory framework for a single European Market with:

» Decoupled entry-exit tariff system & not based on transport routes

» Capacity allocation and balancing, both market-based

» Competitive & liquid markets for gas trading, with wholesale price transparency

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Context: European Gas Target Model

. The European Regulators have established, as an objective at a medium term, a model of European Market based in balancing zones with organized markets interconnected through systems of entrance and exit tariffs with independent trading.

. In the Madrid Forum, ACER and the EC encouraged regional initiatives to develop pilot projects in the framework of the objectives of the GTM, to ensure the implementation of the common market under this model gas 2014.

. The European Gas Target Model has two objectives:

» To promote the creation of series of harmonized liquid and functional regional gas markets within the EU.

» To facilitate trading between these regional market.

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Enabling functioning wholesale markets in Spain and Portugal

Spain complies with most of the liquidity parameters to develop a liquid Hub, which would even become higher if considered at regional level with Portugal

has no structural conditions to create a stand-alone wholesale gas market

1. HHI < 2000

2. > 3 supply sources

3. Demand ≥ 20 bcm

4. Churn rate ≥ 8

5. RSI > 110% > 95 days per year

FR ES PT

?

IberiaFR ES PT

2000

FR PTES

20 bcm

Demand

33

6

47

4.000

1.900

5.200

1.600

37

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IBERIAN GAS HUB

IBERIA has some conditions that favor the development of a Gas Hub:

.High regasification capacity.

.Available transport capacity.

.Potential bridge of gas from North-Africa to Europe

.High volume of LNG

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Current OTC gas market in Spain has a lack of price transparency

• In Spain, the OTC market (based on bilateral transactions) is used mainly as a tool used by traders to manage/optimize the stock of LNG in terminals after unloading shippers

• In Spain, in terms of energy, the volume of operations associated to the OTC market is very high, particularly in regasification terminals

• Transactions already closed are notified to system operator through the system MS-ATR

• The CNE is in charge of publishing the traded volumes and purchasing quotas in the OTC market

• OTC market has a lack of price transparency

There are 8 balance and trading gas points in the Spanish system: the virtual point, the 6 LNG terminals and the UGS

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Current OTC market in Spain

Most of the OTC trade is done at the LNG terminals.

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

Trading volume of natural gas (GWh/month)

LNG BBG LNG Barcelona LNG Cartagena LNG Huelva

LNG Sagunto LNG Reganosa CDG U.S.

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In 2010, CNE proposed a roadmap for the development of a gas exchange in Spain

Accelerate the creation of a gas hub in the Spanish Gas System in order to promote competitiveness, transparency, and reduce the lack of transparency of the current OTC market

General objective

Regulatory instrument

Creation of an gas exchange market in Spain

1. Guarantee of access to every potential party (traders and consumers) under objective, transparent and non-discriminatory conditions

2. Trading hub

3. Development of standard contracts (OTC and organized market)

4. Free and transparent settlement of prices (at least for pre-defined segments of the hub)

5. Offer of gas transparency services, settlement and clearing

6. Potential offer of additional services, based on what demanded by agents

1. Participation of traders and consumers not mandatory

2. Implementation along with the introduction of gradual changes in regulation

3. Creation of transparent price signals

4. Search of minimum level of liquidity

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In 2013, CNE will create a working group for the development of a gas exchange in Spain

. In 14th December 2012, The CNE has approved a proposal of actions in order to speed up the development of the organized market of natural gas in Spain and Portugal (Iberian Hub).

. The CNE has approved a working plan with the next targets: 

» Decoupled entry – exit TPA contract models for the Spanish system

» Regulatory reforms needed in the logistic model to facilitate gas trading, and the development of a market based balancing model.

» Report about the current situation of the gas hubs in Europe and Monitoring the development of the different market platforms in Spain.

» Analysis of the model for the Iberian gas market (for Spain and Portugal), to be realized in the framework of the South-European Regional Initiative from the European Regulators Group.  

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Current initiatives to develop a gas exchange in Spain/Iberia

STAKEHOLDERS:ENAGAS (main gas TSO), Kutxabank , La Caixa, EVE, Generalitat de Cataluña, and other suppliers in process

MIBGAS, S.A.Sociedad Promotora Bilbao Gas Hub, S.A.

TRADE MARK:MIBGAS is within the group of the Iberian Power Market Operator (OMI).

STAKEHOLDERS:OMIP (Portugal) and OMEL (Spain)

. Two existing initiatives to develop a gas trading platform

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How to enable functioning wholesale markets according with the Gas Target Model?

. Different pictures all over Europe call for different approaches which are not mutually exclusive

» If a country is capable of establishing a functioning market itself the establishment of one (or two, based on C/B analysis) zone within this country is important (e.g. GB, Germany, France, Spain);

» If a country is not capable of establishing a functioning market itself (e.g. due to lack of liquidity or size)

• Cross-border market areas (full merger) is one solution; or • Access to a larger, already functioning market; or• Trading Regions – a single cross-border zone for

wholesale markets with congestion-free interconnection to national end-user zones.

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Possible models to study for the Iberian Market

. 1. The Market Area Model (full integration)

. 2. The Trading Region Model (full integration, except national balancing)

. 3. The Implicit Allocation Model (One single Iberian wholesale platform, with implicit allocation of capacity)

. 4. Two National wholesale markets (no Iberian market integration)

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1 The Market Area Model (full integration)

Features (open to discussion):

. One virtual point for wholesale trading

. Fully integrated wholesale market

. One balancing zone from import points to final customers

. Full integration of DSO networks

. Single set of balancing rules

. Single balancing entity

Market Area A

Country A

Country A Country B

Market Area AB

Cross-border market

area

National market

area

VP

Final customers (A) Final customers (B)

VP

Final customers (A)

VP

46

Symbols

Virtual point of the market area serving as the sole marketplace of the market area

Entry or exit contract

Exit contract

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2 The Trading Region Model (full integration, except

balancing)

Country A Country B

Trading Region AB

End userzone A

End userzone B

Final customers (A) Final customers (B)

VP

VP

. Features (open to discussion):

. One virtual point for wholesale trading

. Fully integrated wholesale market

. Trading region is basically kept free of imbalances

. Final customers are balanced in national end user zones that may reflect national specifics

. End-user balancing may be done by national balancing entity

. Congestion-free interconnection between trading region and end user zones through the common virtual point ( virtual exit to end user zone)

Legend and Symbols

Entry or exit contract

Exit contract

Virtual point of the trading region serving as the sole marketplace of the trading region and all attached end user zones. Shifting of gas between trading region and end user zone is done by nominating a virtual exit on the VP.

End user zone = National balancing zone for national final customers, no matter the system (distribution or transmission) they are connected to

Trading Region AB = Cross-border entry/exit system including all nominated points on the transmission systems of countries A and B

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3. The Implicit Allocation Model. Features (open to discussion):

. One single Iberian Wholesale Gas Trading platform

. A certain amount of daily firm cross-border capacity is reserved to allow implicit allocation of capacity

. Cross-border capacity is allocated through the trading activity.

. Combining order books (buy / sell orders) of the exchanges on either side of the border

. Cross border capacity would be allocated by the Market Operator at the same time of the matching of buy and sell orders.

. The Market Operator will inform the TSO about the cross border nomination of gas, and will pay the capacity price (if any)

. The price of the cross border capacity is added to the orders matched among the two countries. Price arbitrage happens automatically.

Market participants make “bids” and “offers” for

buying or selling of gas

Interconnection capacity is being reserved for

implicit allocation

The implicit mechanism matches those bids and

offer with the highest price differences

Capacity is automatically assigned

once a trade is made until cross-border

capacity is sold out or prices have converged

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IBERIAN GAS HUB Proposal of Schedule

1. Draft document analyzing the advantages and drawbacks of the possible models, the regulatory harmonization requisites for its implementation by CNE – ERSE (2013 Q-2)

2. Public hearing (2013 Q-3)

3. Analysis of stakeholders responses to the public hearing (2013 Q-4)

4. Final document to be approved by CNE- ERSE (2014-Q1)

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VI. Review of actions in the WP 2011-2014 (I) Areas of work Responsible Starting Deadline

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VI. Review of actions in the WP 2011-2014 (II) Areas of work Responsible Starting Deadline

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Calendar 1st semester 2013 - SGRI

Next meetings:• 27 February: 21th  IG • 24 April: 20th SG• 12 June: 22th IG