Gas target model and cross border...
Transcript of Gas target model and cross border...
Gas target model
and cross border products
2nd Annual Gas Forum
Vienna, November 8th 2011
Thomas Kleefuß
CEO
The „Turn Table“ for Gas in Central Europe supports east-west and north-south transits
Významné předávací stanice
Waidhaus
HPS Lanžhot
Brandov
Olbernhau
Hospozín
93 mil m3/d
30 mil m3/d
93 mil m3/d
180 mil m3/d
25 mil m3/d
35 mil m3/d
35 mil m3/d92 mil m3/d Gazelle
70 mil m3/d
30 mil m3/d
0,5 – 2,5 mil m3/d93mil m3/d
Český Těšín
35 mil m3/d 18 mil m3/d
Sayda
2
With Nordstream, OPAL and Gazelle Gazprom will be
able to bypass Ukraine as the major transit country
Current gas flows
Gazelle
White Stream / GUEU
Nabucco / South StreamTauern pipeline
OPAL
Nord Stream
Lanzhot - Baumgarten
Shift of gas flows
expected from 2011
Major Russian gas flows will be shifted from the Southern Russian onshore transit route to Nord Stream / OPAL / NEL.
The first branch of the offshore Russian transit highway will be used earliest in 2011. The second line will be completed not before 2013.
In order to benefit from the new/planned infrastructure in Southern Europe (e.g. LNG, Caspian gas) starting not before 2012, access to Baumgarten is essential.
Pipeline Project Gazelle is necessary for extension of Nord Stream/OPAL and GE contract (shift to entry point Hora Svate Kateriny).
Project “Lanzhot – Baumgarten connection” is necessary in order to capitalize on infrastructural developments in the South East of Europe.
Future gas flows
Nord Stream / OPAL / Gazelle
Nord Stream
OPAL
Gazelle
Gaspool
NCG
VTP
Integration means:
Increase the liquidity of gas markets (virtual trading points / hubs) along the route virtual trading points (hubs) by large volumes
Here:- Gaspool- Czech VTP- NCG- and beyond
Nabucco increases Europe’s Security of Supply
by diversifying Supply Routes and Sources
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1) Source: CERA, 2009 annual consumption figures
2) Potential Russian gas export capacity
3) Potential gas delivery per source country
Nabucco
South Stream
ITGITAP
Iraqi gas ~ 20 bcm/a 3)
Turkey
33.5
Austria
8.8
Bulgaria
3.5
Romania
13.7
Hungary
12.7
Germany
81.9
France
45.2
Poland
14.3
Czech Republic 7.8
Slovakia 5.4
5.4
10.2Gas consumption in bcm/a of non-Nabucco countries 1)
Gas consumption in bcm/a of Nabucco transit countries 1)
8.8
Nabucco transit countries
Other countries
Turkmen gas ~40 bcm/a3)
Azeri gas ~21bcm/a3)
Olbernau/Sayda
Waidhaus
Burghausen
TAG
Nabucco
Baumgarten
Lanzhot
NCG market Area
Gaspoolmarket area
WAG
MEGAL Süd
MEGAL Nord
21-24 bcm/a reaching Baumgarten
Neither the Austrian nor the Czech
Market (nor both markets combined) can
absorb 21-24 bcm/a without serious
market distortions
Since SD2 will not accept the CEGH
price risk, the buyer must be able to
ensure re-imbursable onwards transport
to Germany
1) assuming that they are being run at 70% load compared to current levels of ~40%
Risks of market distortions:
8.8 7.8
81.9
10.8
77.7
14.3
5.4
0
10
20
30
40
50
60
70
80
90
Austria Czech
Republic
Germany Hungary Italy Poland Slovak
Republic
Bcm
0
10
20
30
40
50
60
70
80
90
100
France Germany Italy Netherlands Spain United
Kingdom
Bcm
0
10
20
30
40
50
60
70
80
90
100
France Germany Italy Netherlands Spain United
Kingdom
Bcm
82 bcm/a
9 bcm/a
Potential evacuation routes for residual Nabucco volumes
16-19 bcm/a reaching Germany
8.8 7.8
81.9
10.8
77.7
14.3
5.4
0
10
20
30
40
50
60
70
80
90
Austria Czech
Republic
Germany Hungary Italy Poland Slovak
Republic
Bcm
RepublicCzech
Oberkappel
9 bcm/a
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Gas Target Model
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LNGEU Border
Storage
Endcustomer
Production
VP
28 E/X-Systeme 1)
(national, sub-national)
? E/X-Systeme 2)
As premises for functional markets
One europeanE/X-System
Gasinfrastructure - EU Marktarchitecturetoday: tomorrow:
To difficult and to long for realisation
6 national Systems: 40 bcm < x < 100 bcm4 national Systems: 12 bcm < x < 18 bcm
15 national Systems: 1 bcm < x < 9 bcm(x = annual consumption)
1) after implementation of 3rd package
2)no congestion or restriction in combination of Entry and Exit
Ten to twelve market areas or trading regionsEach of them
designed as congestion-free1 entry-exit-systems that in general do not impose
restrictions to capacity utilization or combination of entry and exit points
containing a virtual trading point acting as hub and a gas exchange operating on this hub
offering additional flexibility services2 beyond balancing of forecast errors
Tightly connected market areas/trading regionsBetween these hubs
bundled capacity products are offered for explicit capacity booking
market coupling procedures are established for implicit allocation of day-ahead capacity
Properly connected gas storages and gas sources3 to market
areas/trading regions
Single and bundled capacities are offered between the gas sources and hubs
Gas storages are connected to the respective hub of the market area/trading region
1 This may be achieved by investments removing bottlenecks, applying control energy and/or some few and well-founded capacity utilization restrictions. However, the restrictions shall be published prior to offering the capacity.
2 It shall allow shippers to create nominated imbalances inside pre-defined limits. 3 EU border interconnection points, LNG terminals, indigenous production sites
Future EU Gas Market Architecture(Assumption)
Trading Region AB = Cross-border entry/exit system including all nominated points on the transmission systems of countries A and B
End-user Zone = National balancing zone for national final customers, no matter the system (distribution or transmission) they are connected to
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.
A trading region allows shipper to bundled their purchase portfolios but not the supply portfolios of the countries inside
Storages and indigenous productions of the countries inside the region are linked to the VP
The trading region model reduces the requirements of legal conditions between participating countries for establishing of cross-border markets as much as possible
Trading Region model at a glance
,
-
E or X contract X contract
Country A Country B
Trading Region AB
End-userZone A
End-userZone B
Final customers (A) Final customers (B)
VPVP
NB: Trading regions can be developed also for more than two
countries and don’t hamper the establishment of full merged
markets later
Functional Markets by Trading Regions
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Future EU Gas Market Architecture
(Assumtion)
EU Border PointEU Entry CapacityHub-to-Hub CapacityLink Chain ALink Chain BHub
Market Area / Trading Region
N4G enables a functioning market in
Central Europe by forming a trading region
with Austria, Slovakia and Hungary
One investment to Austria just required (Vodňany <> Oberkappel would (probably) be necessary in order to establish a trading region (one wholesale market) together with A, SK, HUN and maybe SLO
One common VP and gas exchange
Hub-to-Hub capacity products to all neighbouring markets and maybe beyond
National distribution zones remain substantially unaffected
Expected benefits are (a) shift of unused transit capacities to required intra market capacities, (b) reduction of pipe-to-pipe competition and (c) continuing eye-level TSO cooperation/ avoiding RSO
Trading Region in Central Europe
PL-Hub
ROM-Hub
PSV
(CEGH+)
NCG
Gaspool
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12
EU TSO Cooperation
Train-ticket achieved by inter-TSO capacity booking per shipper request (i.e. case-specifically)
One-stop-shop achieved by unlimited inter-TSO capacity booking
Effective and efficient development, implementation and operation of the platform achieved by:
Jointly elaborating and structuring of working programs and
implementation schedules
Common TSO working groups equipped with TSO experts
Accompanied by experienced consultants
Discussion and agreement of working programs and associated cost
with national regulators
Establishing and applying of common standards for bundled products
(one-time development, multiple application by different TSOs)
Continuous collaboration on eye level
Flexible and fast decision making
…
Regulatory Requirements
• ACER Framework Guidelines “Capacity Allocation Management”, FG CAM, requesting– Online platforms for bundled cross-border capacities, as well as measures and a schedule
for reducing the number of platforms towards one– Single allocation procedure for entry and exit capacities at an interconnection– Single nomination procedure for bundled capacities
• Transformation of FG CAM into an ENTSO-G Network Code until March 2012
Currently Two Competing Models for Online Platforms
A. Organizing TSO, oTSO = GATRAC– Realizing “one-stop-shop”: just one contractual TSO for shippers in order to transport gas
through Europe– Realizing “train-ticket”: just one contract for hub-to-hub transports, etc.– Limited liability for TSOs to be implemented (in comparison to today)
B. Capacity Agent = Trac-x (GER), Link4Hubs (GUD, GTS, Energinet.dk), Capsquare (GRTgaz, Fluxys), Eucabo (GUD, GTS)
– Realizing “single allocation procedure”– Realizing “single nomination procedure”, but no one-stop-shop or train-ticket– Important issue: agent could be the nucleus for a single EU system operator
European Online Platform for Capacities
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All capacity products required by the
wholesale market
Hub-to-hub
EUBP1-to-hub
Storages-to-hub, hub-to-storages
LNG terminal-to-hub
Indigenous production-to-hub
All tenures required by the NetCode
Intra-day
Day-ahead
Short-term (more days, week, month)
Mid-term (more months, quarter, half-a-year,
year)
Long-term (more years)
Firm and interruptible capacities
All explicit allocation procedures
required by the NetCode
OSW, auctions
FCFS
Open season procedures
Train-tickets
Single contracts for capacities on
interconnection points (bundled products)
One contact partner for initiation, conclusion,
nomination, settlement, …
One-stop-shop
Shippers can choose one contracting party
(oTSO) for all capacity products required for
operation within the EU gas wholesale markets
(thereby harmonizing applied law, language,
currency, etc.).
However, each shipper is free to choose
different oTSOs for different contracts.
One single gas capacity platform for
the EU
However, the platform can be extended easily
also across the EU borders.
Well inter-linked
With the retail market platform of each market
area/trading region
With trader-system interfaces for easy and fast
integration of trade and transport business1 EUBP = EU Border Point2 According to the Network Code
European Capacity Platformfor the Wholesale Markets
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European Capacity Platforms
for Wholesale & Retail
TSO A TSO B TSO C TSO D TSO ……
… … …
…Retail Platforms
(10-12)
Suppliers, Final Customers
Suppliers, Final Customers
Suppliers, Final Customers
Wholesale Platform
(1)
S h i p p e r s
GATRAC Platform
TradingApplication
GATRAC =
Bundled Day-ahead Capacity
Direct connection between respective VPs
Bundled products with one single contract (similar “train tickets”)
Bookable with each participating TSO on FCFS-principle
First two products:
Firm daily capacity (VTP <> Gaspool)
Interruptible daily cap. (VTP <> NCG)
Bookable one to more day(s) ahead*
Bookable since
25.11.2010 (firm cap.)
09.05.2011 (interr. cap.)
No renominations
VP
VTP
* More days ahead will be used to allow bookings over the weekend and holidays and to align capacity booking periods with trading times on the EEX Gas Spot Market
NCG
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GATRAC already achieved
Story or vision, how the European capacity market should be organized in the future
Entry into the EU markets, intra-market, cross-market Primary and secondary capacities Allocation procedures
Detailed Co-operation Concept Way of co-operation, accession, resignation, expulsion Decision making Development (annual work programme, …) …
First draft of the corresponding Co-operation Contract
First hub-to-hub products implemented
Rough IT Concept for further extension (capacity products and allocation mechanism)
Many interested parties (TSOs, regulators, shippers)
North-South Corridor(s)
Establishing of North-South Corridor(s) and – at the same time –connecting neighboring markets just with two (smaller) projects:
a) Poland connection (using the SK-HUN connection or existing lines)
b) Oberkappelconnection (in cooperation with TGL)
NB: a new corridor more East would just create an additional route for Russian Gas what isn‘t needed
a)
b)
TGLSK-HUN
Gaspool
NCG
VTP
CEGH
VTPPoland
VTP
MGP
Nabucco extension by app. 60 km creates the most economic access to one of the largest existing transmission systems in Europe and direct connections to - Germany, North
and South- Poland- and beyond
Nabucco
N4G provides for Nabucco the most
economic access to 4 markets: CR, PL,
Gaspool and NCG
Nabucco Extension
Most efficient investment
compared to WAG
extension
N4G North-South-corridor
to Poland is already
reflected in the European
Investment plans (#1).
(Moravia Project)
N4G now tries to include
Oberkappel connection in
the regional and European
investment plans (#2)
Connection to Oberkappel will support an
EU-North-South corridor and serve as a
backbone for a trading region CZ-A-SK-HU
Oberkappel connection
Interconnection point Compressor stationUGS
Oberkappelconnection
1
2
Baumgarten
Eustream
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Partner (TSOs) and necessary investments Tauerngasleitung GmbH, TGL GmbH: Tauerngasleitung from Haiming (D) to Tarvisio (I) and
connection to Slovenia (app. €1,2 bn ) NET4GAS. s.r.o.: N4G-Oberkappel Interconnection, ONI (app. € 150 mio ) Bayernets GmbH: “Monaco-Pipeline” (intra national grid extension) Geoplin Plinovodi: Interconnection to the Tauerngasleitung
Market Survey 5GL
Interconnecting five gas marketso Germany (NCG, Gaspool)o Austria (VTP = CEGH)o Italy (PSV)o Czech Republic (VOB)o Slovenia (VTP)
Market Surveyo Start: August 2011o End: November 2011o More than 230 shippers informedo Results expected soon
• Supported by o National Regulatorso EC DG Energy
Implementationo Depends on the results of the recent market
survey and a possible open season procedureo Not before 2016/17
N4G-Measures towards further Market
Integration
Strong support of Regulatory Development
Fast Implementation of 3rd Energy Package (ITO, pur E/X, …)
Development of a Gas Target Model (together with E-Control, BNetzA, Florence School of Regulation and Clingendael Institute)
► Establishing „functional gas markets“ (> 20 bcm/a; > 3 gas sources; > 10 supplliers)
► Connecting the functional gas markets (hub-to-hub, market coupling, …)
► Securing supply pattern (new corridors, surplus capacities, reverse flows)
Development and Implementation of Hub-to-Hub capacity products (GATRAC)
Efficient Investments
in line with the further market development (gas target model)
more integration (include existing assets) than „in addition“ (avoiding asset competition)
► Nord Stream integration (connection to Waidhaus; Gazelle)
► Nabucco integration (interconnecting the large Czech transmission system)
► North-South-Corridor(s)
Czech-Poland Connector plus Moravia Loop
Czech-Austria Connector (Oberkappel)