27.10.2016

Implementation of Network Code on Capacity Allocation Mechanisms well on track, but not yet completed

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One year after the application date of the Network Code on Capacity Allocation Mechanisms (NC CAM), the Agency publishes today an Implementation Monitoring Report in which it presents the achievements as well as shortcomings and delays in the implementation process of the NC CAM. The Agency urges Transmission System Operators (TSOs) and National Regulatory Authorities (NRAs) to promptly implement all the remaining provisions of the EU legislation, giving priority to capacity bundling, virtual interconnection points and capacity maximisation.

The NC CAM applies to European Interconnection Points (IPs) since 1 November 2015. The Agency is in charge of monitoring the implementation of the Network Codes and evaluating their effects.

The first NC CAM report exhibits a total average implementation level of 82% of NC CAM provisions across the Member States. The implementation level is high on the core requirements such as the auctioning of standard capacity products via booking platforms (94%). Nevertheless, a full implementation was only achieved by Belgium and the UK, while a few Member States are lagging behind.

Main findings:

  • Bundled capacity offers via booking platforms and the single nomination procedure should be promptly implemented where this is not the case yet. This should enable network users to easily access and nominate cross-zonal capacities.
  • The Agency supports the further development of Virtual Interconnection Points (VIPs) as another important measure to simplify the commercial layer of gas transport and capacity handling for network users. Therefore, the Agency urges TSOs to start or continue their analyses and subsequently realise all possible VIPs before 4.11.2018.
  • The Agency observed some implementation issues on the maximization of capacity (offers) at a number of Interconnection Points (IPs), in particular regarding
    -    the application of a joint method to analyse and remove technical capacity mismatches of both sides of an IP,
    -    the dynamic recalculation of technical capacities at a frequency jointly agreed among TSOs at each IP, as well as
    -    the use of network user data, where users provided it, on their expected future flows in the capacity calculations.

    ​A proper capacity maximisation should be a priority for the involved TSOs especially at potentially contractually congested IPs. A dynamic re-calculation of technical capacity at a higher frequency by TSOs could contribute to the maximization of the capacity offer.
     
  • ​​The NC CAM indicators calculated for 2014 and 2015 show limited effects so far. The Agency observed an increase in bundled capacity offers (still at a low level), a visible increase in total bookings for peak days and rather stable total physical flows. However, these initial observations are based on just two years of incomplete data. Trends can only be observed over a longer assessment period.
  • Transport data availability and quality at ENTSOG’s Transparency Platform requires further improvements with the help of TSOs and NRAs.

Focus and approach of the report:

ACER’s first NC CAM Implementation Monitoring Report focuses on the formal implementation of each of the respective CAM provisions by gas TSOs and NRAs in 2015/16. It is based on surveys run among TSOs and NRAs from 10/2015 to 3/2016. Data provided in these surveys was updated by NRAs until mid-October 2016.     The Agency evaluated the implementation level for the following NC CAM chapters:  
  • Allocation of Firm Capacity,
  • Bundling of Cross-Border Capacity,
  • Interruptible Capacity,
  • Tariffs & Capacity Booking Platforms.

The Agency also calculated certain monitoring indicators for 2014 and 2015 in order to start evaluating possible effects of the NC CAM application. The underlying data stems from publicly available sources, such as ENTSOG’s Transparency Platform and the Capacity Booking Platform PRISMA.       

Links:

NC CAM Implementation Monitoring Report
Regulation (EU) No 984/2013 (NC CAM)
ENTSOG’s CAM NC Implementation Monitoring Report 2015, 8 June 2016​

Background:

The Network Code on Capacity Allocation Methods (NC CAM) entered into force in November 2013. It became applicable at Interconnection Points (IPs) of the EU gas transmission networks on 1 November 2015. The implementation of the NC CAM provisions facilitates gas transport and gas trading across the EU. The code promotes and defines harmonised capacity allocation mechanisms in the form of auction procedures and a small set of standardised bundled cross border capacity products at IPs between entry-exit zones. The code, taking account of general commercial and technical rules related to capacity allocation, also specifies how adjacent transmission system operators shall cooperate to facilitate the sale and usage of bundled capacity.