We are pleased to invite you to participate in a survey on Capacity allocation at Kiemenai interconnection point, a matter of significant importance to the proper functioning of regional energy market. Your input and feedback are crucial in helping us to make informed decisions that better serve the needs and expectations of all stakeholders.
Background and Context
At the early stages of regional market development, capacity allocation mechanism was implemented by TSOs, based on two premises – absence of congestion and integration of both networks into one market zone without necessity of capacity booking at Kiemenai IP. With the diversification of supply sources, the Kiemenai entry-exit point has become congested with the frequent application of congestion-management procedures, while market integration is gradual process.
Taking into account the actual circumstances Kiemenai IP has become crucial regional asset in gas market. It is clear that the current capacity allocation mechanism might not fit for the evolving market circumstances. Whereas, TSOs shall make available the maximum capacity at Kiemenai IP, taking into account system integrity and efficient network operation.
Article 16(2) of Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 foresees, that:
“2. The transmission system operator shall implement and publish non-discriminatory and transparent capacity-allocation mechanisms, which shall:
(a) provide appropriate economic signals for the efficient and maximum use of technical capacity, facilitate investment in new infrastructure and facilitate cross-border exchanges in natural gas;
(b) be compatible with the market mechanisms including spot markets and trading hubs, while being flexible and capable of adapting to evolving market circumstances; and
(c) be compatible with the network access systems of the Member States.”
Transmission system operators in this survey propose all stakeholders to look freshly on capacity allocation and congestion management procedures in place in order to review and improve them.
Explanatory note on the capacity allocation and congestion management procedures mentioned in this survey:
Auction – capacity allocation mechanism as foreseen in Commission Regulation (EU) 2017/459 of 16 March 2017 establishing a network code on capacity allocation mechanisms in gas transmission systems and repealing Regulation (EU) No 984/2013 (CAM NC), meaning, that capacity is allocated by using auctions. Yearly, Quarterly and Monthly capacity products are auctioned with algorithm foreseeing subsequent bidding rounds (the period of time during which network users can submit, amend and withdraw bids). Auctions are organised in accordance with auction calendar as published by ENTSOG.
ICA – capacity allocation method when IP capacity is allocated at the same time with corresponding quantity of gas trade on trading platform. ICA reduces the complexity of capacity booking for network users when obtaining gas in exchange over border and merging different market zones, however in cases of high capacity demand for certain capacity products increases congestion level as offered capacity with ICA process has to be set aside for the booking of day-ahead and within day capacity products.
UIOLI – use-it-or-lose-it mechanism, which is procedure of reoffering transmission capacity that is underutilised at an IP triggering the partial or complete withdrawal of a network user’s capacity as described in Annex I of Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005.
Objectives
The objective of this survey is to gather feedback from stakeholders regarding capacity allocation mechanism and possible solutions for the frequent congestion issues at Kiemenai entry-exit point. TSOs will summarize received feedback and take it into account to prepare amendments for respective third-party access rules governing capacity allocation at Kiemenai entry-exit point.
The results of this survey will be presented to the national regulatory authorities.
This survey relates specifically only to the rules on capacity allocation mechanism and congestion management procedures and excludes any other topic of the transmission regulation.
Submission Guidelines
In order to submit your feedback, please complete the survey available HERE. Survey will be available from 23.10-2023 until 06.11.2023.
Please follow the provided formatting and submission guidelines, and ensure that your responses are received by the stated deadline.
If you have any questions or need further assistance, please contact JSC “Conexus Baltic Grid” (capacity@conexus.lv) or AB Amber Grid (consultation@ambergrid.lt).
