Market Consultation – introduction of VIPs
Updated January 6th 2020
Gasunie Transport Services (GTS) will implement virtual interconnection points (VIPs) between the TTF market area and the neighbouring market areas in Germany and Belgium. Virtual interconnections points, or VIPs, aim to eliminate multiple connections between two market areas to facilitate flexible hub-to-hub trading for shippers.
In the recent past we have organized several workshops and consultations about implementing VIPs. Early 2018 we concluded that NC CAM was unclear about existing IP-contracts and that a change was necessary to give clarification. On 6th of August 2018 the European Commission (EC) sent a letter stating that in their opinion the NC CAM was clear and therefore no changes were necessary. GTS and ENTSOG disagreed with this conclusion and hold on to the opinion that NC CAM should be clear about current IP contracts. In September 2018 we communicated that we aimed to implement the VIP-only model by the first quarter of 2020.
In the meantime, as a consequence of the NC TAR Sector Agreement concluded on 10th of December 2018, ACM will play a role in defining or deleting GTS entry and/or exit points. According to the Dutch Gas Act, GTS has the sole right to determine the list of entry and exit points. As of May 2019, GTS must send its intended network point changes to ACM, which will then check if these changes have a material effect on shippers. If so, ACM can decide on a financial measure. The letter is now being consulted on by ACM (only in Dutch).
Since it was our intention to define five VIPs and delete fourteen IPs, this code change was a trigger for us to re-evaluate the whole VIP concept and our intended implementation. Our evaluation has led to two important conclusions/changes:
- VIPs can only exist, if the underlying IPs are still there. IPs are an integral part of the VIP, so we cannot delete the 14 underlying IPs.
- We cannot force shippers to move their IP-contract(s) to the VIP.
We are still in favour of the VIP-only model, because it is easier, cheaper and earlier to implement, but we have concluded that we cannot force such an implementation.
Therefore, we have chosen to implement a hybrid model. In this hybrid model the shippers decide what to do with their current IP-contract(s). For each IP-contract they have the option to to move it either as a whole to a VIP or keep it at the current IP; this option remains open while the contract is still on the IP.
All shippers with capacity contracted beyond 1 January 2020 were asked whether they intended to migrate their capacity to the VIP. The majority has opted not to for now. Shippers can, however, use a specific service to switch their capacity to the VIP at a later stage.
We have planned the work in a way that ensures that VIPs can go live on 1 April 2020, which includes the following milestones:
- November 2019: GTS and the adjacent network operators will be testing the electronic communication method needed for this model.
- In January 2020, shippers will be able to test the proper functioning of nomination on the VIP.
- After successful completion of the test period, we will start transferring contracts to the VIP in early February 2020 (for contract owners who have consented to it).
- On 16 March 2020, the first auction for monthly capacity on VIPs will take place (for the month of April 2020). The results of the quarterly auction for the second quarter (April to June 2020), which is scheduled to start on 3 February 2020, will be treated the same as existing contracts on the IP.
What will happen if you choose to move your IP-contract to a VIP?
All rights and obligations will be transferred from the current IP to a new VIP. All of current available functionality at the IP is available at the VIP. Once your contract has been moved to a VIP, it will stay on the VIP.
What will happen if you choose to keep your IP-contract on the IP?
Once an IP has become part of a VIP, we still offer the current IP functionality for contracts that remain on that IP, as long as it is within the possibilities of the NC CAM.
This means that you can still execute a transfer of capacity (ToC) or Transfer of Usage Rights (ToU) for those contracts. Nominations, confirmations and allocations will also be determined at IP-level, matching will be done on VIP-level.
A Surrender of Capacity (SoC) or a Capacity Conversion of contracts at an IP however, can only be executed if (part of) the capacity related to the IP-contract will be offered in an auction at VIP level, because according to NC CAM, available capacity must be offered at a VIP. In case the auction is successful, the offered capacity will lead to a VIP-capacity contract. The part of the offered IP-contract capacity which was not allocated in the auction will stay on the IP.
What about new diversions and wheelings?
The possible combinations for diversion and wheeling will change because of the introduction of VIPs. See annex 3 of the TSC 2020.
Consequences for the upcoming PRISMA auctions
In the upcoming PRISMA auctions, we only offer available capacity on IP-level as long as VIPs are not established. The resulting IP-contracts can be moved to the VIP on request of the shipper.
For historical reference we published the former version of this page here.
Below you can find some questions and answers regarding this topic.
In case you have any questions, please contact our Customerdesk: email@example.com or call +31 (0)50 521 3333.
If all shippers decide before that date to have all capacity transferred to the VIP GTS can still build the VIP-only model, which is easier and faster to implement. Decisions we receive later on will decrease possibilities to limit the the impact on our IT-systems.
This is not firm yet, but first impressions are that the extra work is feasible and within reasonable limits.
Yes. For Surrender Of Capacity and Capacity conversion the capacity will be offered on the VIP. If the auction is succesfull this will result in a VIP-contract. The part of the original contract that is not auctioned successfully will remain on the IP. For Diversion we applied for a code change to facilitate diversion from (V)IP to VIP. Transfer of Contract and Transfer of Usage rights will be available as usual, both on IP and VIP. Wheeling will be continued for storage-storage combinations and existing wheeling contracts will be respected.
We do not expect a formal decision by ACM or any other regulatory body (ACER, EC). ACM will only report on the material impact of the introduction of the 5 new networkpoints (the VIPs). Because no contracts will be impacted other than the related networkpoint there is no impact on the tariffs stemming from this introduction. Tariffs on IPs and VIPs are equal because of the NC TAR decision by ACM. We conclude that there is no material impact for shippers.
The choice for the hybrid model offers shippers the maximum of flexibility. NC CAM does not explicitly state what will happen with existing contracts. There are no indications that ACER and/or the EC will enforce the VIP-only model and we see that in different member states the choice for existing contracts varies.
Nominations for physical flow at a specific point will continue to be checked against the usage rights, both at IPs and VIPs separately. Nominations made for a specific point will be confirmed and allocated on that same point. Matching with the NNO will be done on VIP-level. We therefore see no restrictions for contract combinations on the border as e.g..
- IP for GTS and VIP for NNO
- VIP for GTS and IP for NNO
- If one shipper has both IP- and VIP-contracts for GTS and wants to match these with one counterparty at the other side of the border.
No. As soon as the IP is part of a VIP all available capacity will be offered on the VIP. This is an explicit consequence of NC CAM.
In the questionaire we use currently we ask to make a choice for the contract as a whole. Later on you can move part of the contract at an IP to the VIP e.g. for a Transfer of Capacity.
Transfer of capacity and of usage rights remains possible, both for IPs and VIPs. The owner of the capacity can choose to move the capacity tot he VIP. Once the capacity resides on the VIP it can not be moved back to an IP.
With the hybrid model we offer maximum flexibility to the shippers. As indicated, NC CAM does not contain explicit terms what to do with existing contracts. We did not receive signals that EC or ACER will enforce the VIP-only model. As far as we know Austria already implemented this model. In Germany the dual model was chosen. We conclude that different models are implemented already throughout Europe.
For Transfer of Capacity (ToC) the choice you make for the contract you have with GTS is not dependant on the choice that the original owner of the capacity makes for his residue of the contract. If you are the owner of transferred capacity, you can decide.
If you have a Transfer of Usage (ToU) contract, you are from our point of view not the owner. The network point related to the ToU should be the same as the network point for the original contract. You should get in contact with the owner of the original contract (the one who transferred the rights to you), in the end he will decide.
If you want to book additional capacity on the IP it will be auctioned at the VIP. Your additional capacity is than in fact registered on the VIP. So if you want all capacity together the VIP is the point to use! Be advised that when we calculate your exceedings, we will compare your usage right per portfolio and per network point with your allocation on that point. The IP and the VIP will be separate points in that comparison.