What is the best TSO model for Europe?Can we afford - conversely benefit more from - a widelydiverging mix of models?Thoma...
AGENDATargets of the European gas marketProducts and developmentsA role model for EuropeConclusion
Functional gas market    Criteria:     Zone with one market price for the same product at the same time at      the same ...
Overview          Current European Capacity PlatformsNo.   Platform   Involved TSOs   Platform and Capacity Concept       ...
Capacity Allocation –The Regulators’ View               Cross-Market Capacities                FWG CAM “apply to cross-bor...
What`s left to be a TSO ?       The Austrian “Marktgebietsmanager”The “Marktgebietsmanager – MGM” (market area manager) is...
The Central Agent Model    for one or more countries / markets          Shipper                                           ...
The GATRAC ConceptThe oTSO concept does not need any central entityThe only parties acting towards the shippers are the TS...
“GATRAC” Bundled Hub-to-Hub products             with a single contract                                         cross bord...
Conclusion:      The TSOs will play a stronger role with higher      entrepreneurial incentivesLess than 50 TSOs should be...
Connecting Markets              Thank you for your attention!  Vienna, November 13th 2012
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Thomas Kleefuß (NET4GAS CEO): What is the best TSO model for Europe?

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Thomas Kleefuß (NET4GAS CEO): What is the best TSO model for Europe?, EAGC, Vienna – 13. Nov. 2012

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Thomas Kleefuß (NET4GAS CEO): What is the best TSO model for Europe?

  1. 1. What is the best TSO model for Europe?Can we afford - conversely benefit more from - a widelydiverging mix of models?Thomas KleefußManaging Director and CEOEAGC, Vienna – 13. Nov. 2012
  2. 2. AGENDATargets of the European gas marketProducts and developmentsA role model for EuropeConclusion
  3. 3. Functional gas market Criteria:  Zone with one market price for the same product at the same time at the same place (single price zone), creating reliable price signals for forward and spot markets  Freely accessible for traders, suppliers on equal terms  Liquid trading (ability to quickly buy or sell reasonable volumes of gas without causing a significant change in prices and without incurring significant transaction costs) Minimal Requirements:  Fully implemented E/X-Systems (see also next pages), ideally equipped with  uncongested entries with a certain part of surplus capacity  free allocatable entries and exits  trade possible via a gas exchange and OTC  Sufficient demand (> 20 bcm/year of final customer consumption)  Connection to at least 3 different/independent gas sources3 EAGC, Vienna – 13.11.2012
  4. 4. Overview Current European Capacity PlatformsNo. Platform Involved TSOs Platform and Capacity Concept Products1. GUD Central agent (= GUD) Primary capacities GTS Individual contract with each Firm day-ahead capacities Energinet.dk TSO (= multi contract bundled GTS<>GUD, GUD<>ENDK, capacities) GTS<>ENDK2. GUD Central agent (= GUD) Primary capacities GTS Individual contract with each Interruptible day-ahead and TSO (= non-bundled and multi “working days next week” contract bundled capacities) capacities (GUD<>GTS)3. Fluxys Central agent (= Fluxys) Primary capacities GRTgaz Individual contract with each Fluxys-GRTgaz (month) OGE TSO (= multi contract bundled Fluxys-OGE (day-ahead) capacities) Secondary market for Fluxys and GRT capacities (various tenures)4. German Central agent (= TRAC-X) Primary capacities national Individual contract with each Auctions: Day-ahead, monthly, platform TSO (= non-bundled and multi quarterly, yearly products All German contract bundled capacities) FCFS booking: various tenures TSOs Secondary market5. ONTRAS oTSO concept Primary capacities NET4GAS Single contract bundled capacity day-ahead capacity GRTgazD VTP CZ <> GASPOOL (ONTRAS): eustream firm and interruptible) VTP CZ <> NCG (GRTgaz D): VTP CZ <> VTP SK and CEGH Baumgarten A
  5. 5. Capacity Allocation –The Regulators’ View Cross-Market Capacities FWG CAM “apply to cross-border interconnection points, ..., ... as well as to interconnection points between entry-exit-systems ...” (Chapter 1.2) Single Platform “The network code(s) shall lay down an action plan to reduce the number of platforms and eventually establish a single EU-wide platform.” (Chapter 3.3). Bundled Capacity Services “... on the basis of a single allocation procedure and a single nomination.” (Chapter 2.4.1)
  6. 6. What`s left to be a TSO ? The Austrian “Marktgebietsmanager”The “Marktgebietsmanager – MGM” (market area manager) is not a TSO but anadditional entity co-operating with all Austrian TSOs.The responsibilities of the market area manager due to the Austrian Gas Act(draft submitted to parliament) include: Coordination of the grid control and the utilization of the linepack Purchase, sale, and optimization of balancing energy by using the VTP Organizing the settlement of balancing energy Elaboration of unique calculation schemata for capacity calculation at each E/X point Organization the establishment and operation of the online platform for capacity sale 10 years capacity forecasts and development of ten year network development plan Elaboration of the ten years network development plan Coordination of measures in order to handle bottlenecks in cooperation with TSOs, DSOs, and SSOs Signing contracts about data exchange with all market participants Coordination of maintenance work
  7. 7. The Central Agent Model for one or more countries / markets Shipper Shipper Central Capacity Central Agent (“platform operator”) ? Marketing Entity (Quasi RSO*)TSO 1 TSO 2 TSO 1 TSO 2 capacity requests, re-/nominations capacity contracts capacity requests, nomination, billing, … RSO Regional System Operator
  8. 8. The GATRAC ConceptThe oTSO concept does not need any central entityThe only parties acting towards the shippers are the TSOs themselvesAll TSOs can assume the oTSO role, also none of the TSOs is likely toevolve to the single capacity marketer.In order to establish the oTSO as a one-stop-shop equivalent from ashipper’s perspective to a central agent operating a capacity platform, Shipper 1 All TSOs can act as oTSO Shipper 2 (if they wish) Single Single contract contract bundled bundled capacity 1 capacity 2 Inter-TSO Inter-TSO TSO 1 booking booking TSO 2 (oTSO for TSO 2 TSO 1 (oTSO for Shipper 1) Inter-TSO Inter-TSO Shipper 2) processes processes capacity contracts capacity requests, nomination, billing, … http://www.gatrac.com
  9. 9. “GATRAC” Bundled Hub-to-Hub products with a single contract cross border gas transports can be met rather quickly by expansion of the GATRAC Benefits: TTF No need to amend legal framework if national legal rules are not mandatory for cross border capacities Similar procedures and contracts for all routes Compatible with TRAC X VTP NCG VP PEG CEGH current scope of cooperation possible future routes 9F-BD
  10. 10. Conclusion: The TSOs will play a stronger role with higher entrepreneurial incentivesLess than 50 TSOs should be able to manage a single contract modeleasily if liabilty rules are harmonized between TSOs and towardsshippers in EU, Risks are limited between TSOs due to financialstrengthThe market forces will drive efficiency and innovation of TSOs fasterthan regulation or market operators, because - TSOs will not be segreagted from market and it´s participants - A segregation from technical and commercial skills will have adverse consquences - asset development will not be unbundeld from product development TSO consolidation can create greater value in particular due to best practice transfer and cross border harmonization i.e. (Gasunie GTS and GuD) Additional players like market operators etc. have their own agenda and complicate processes
  11. 11. Connecting Markets Thank you for your attention! Vienna, November 13th 2012

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