Implicit capacity allocation is a method where transmission capacity and the corresponding quantity of gas are allocated simultaneously and occurs through market mechanisms such as auctions or exchanges. Unlike explicit capacity allocation, where capacity and commodity are traded separately, implicit allocation integrates these transactions to streamline the process and enhance market efficiency and increase integration of national gas markets in the Baltic States and Finland. It serves as an alternative and is applied together with capacity allocation at capacity booking platforms.
Amber Grid reserves part of the technical capacity for implicit allocation via the exchange. Similarly, Conexus Baltic Grid allocates the same portion of its within-day and day-ahead capacity products for booking on the trading platform. This method ensures efficient cross-border trades and promotes market integration within the region.
The Rules for implicit capacity allocation at the entry/exit point with Latvia.
- The implicit capacity allocation method shall be applicable to short-term day-ahead and within-day capacities.
- Implicit capacity allocation shall be executed by the natural gas exchange operator. Information on transmission system capacities allocated through the implicit capacity allocation method shall be posted by the natural gas exchange operator.
- Implicit capacity allocation for day D shall be made:
- Day-ahead capacity - from 10:00 h of day D-1 until 14:00 h of day D-1;
- Within-day capacity - from 17:30 h of day D-1 until 4:00 h of day D.
- Implicit capacity allocation method shall be used for the allocation of day D:
- for day-ahead capacity - 10 percent of the technical capacity of the interconnection point for day D. In cases where capacities available at Latvia’s TSO will happen to be lower than the capacities owned the TSO, implicit capacity allocation method may be employed for the allocation of less than 10 percent of the technical capacity at the entry/exit point of the interconnection of Lithuanian and Latvian gas transmission systems;
- for within-day capacity – 10 percent of the technical capacity of the interconnection point for day D. The natural gas exchange operator may only offer to buy (and) or sell on the exchange the amount of entry and exit capacity for day D that the TSO can physically transport during the remaining hours of the day D from the moment the natural gas exchange operator submits the TSO with the information on the allocated capacity. In cases where capacities available at Latvia’s TSO will happen to be lower than the capacities owned the TSO, implicit capacity allocation method may be employed for the allocation of less than 10 percent of the technical capacity at the entry/exit point of the interconnection of Lithuanian and Latvian gas transmission systems;
- The TSO shall have the right to provide the natural gas exchange operator with the updated information on the quantity of the capacity for implicit capacity allocation during the whole period of implicit capacity allocation.
- The natural gas exchange operator shall submit information to the TSO on capacities for day D allocated through the implicit capacity allocation method:
- for Day-ahead capacity - daily no later than by D-1 14:15 h;
- for Within-day capacity – hourly by the end of day D, starting on the day D-1 18:00 h.
- Any day-ahead daily capacities and within-day capacities not subject to the allocation through implicit capacity allocation procedure stipulated by paragraph 4, as well as capacities which in accordance with paragraph 4 had been planned to be allocated through the implicit capacity allocation method but that had not been actually allocated, shall be allocated in accordance with the procedure stipulated AB Amber Grid Rules for Access to the Natural Gas Transmission System.
