Newsletter GTS December 2017
The year 2017 is drawing to a close – a good moment to look back on important developments and changes in 2017 and to look forward to what lies ahead in 2018. In this newsletter, we will first take a look at market developments and then zoom in on some topics that are relevant to our products and services.
This newsletters topics
WORKING TOGETHER ON MARKET DEVELOPMENTS
Although the Dutch gas market is currently functioning well, it is subject to change. In the ongoing energy transition, gas is taking on a different role. Domestic Dutch production is declining and will be replaced by additional imports. In addition, the market is increasingly moving towards a virtual system due to the introduction of virtual interconnection points (VIPs) and further integration of markets.
All these changes make it necessary that we continue to develop the Dutch gas market. We aim to do this together with you, as a shipper, and the other market parties. Further market integrations, fewer market barriers, and products and services that help your business will ultimately benefit all market participants, as well as end-consumers.
Together with you, we made a good start in this regard in 2017. In several market consultations (on the implementation of the network code tariffs, the introduction of VIPs, and the integration of the BBL pipeline in the TTF market area), we jointly searched for the best way forward. Some important steps have already been taken, and the first effects will become noticeable in 2018.
For a short overview and update on these market consultations, check out this link.
Besides these market consultations, we organised two shippers’ meetings in 2017: the first one was held on 8 June and the next meeting will take place on 20 December. You have been invited to participate in the follow-up VIP session and/or individual consultations. If you have not done so yet, you can still sign up for the December meeting.
We will again organise shippers’ meetings in 2018.
DEVELOPMENTS AND UPDATE ON OUR PRODUCTS AND SERVICES
We are always looking for ways to improve our products and services. We are therefore pleased to bring some of the latest changes to your attention. Some of these changes will come into effect on 1 January 2018, while others will become relevant in the course of 2018. A short explanation of these changes and developments is given below.
CHANGES TAKING EFFECT ON 1 JANUARY 2018
Capacity conversion via PRISMA and available on a day-ahead basis
GTS already offers capacity conversion for yearly, quarterly and monthly capacity that can be requested via the Customer Desk. As of 1 January 2018, it will also be possible to request capacity conversion via PRISMA, and also on a day-ahead basis.
With the service capacity conversion, it is possible to bundle your unbundled firm entry or exit capacity already contracted at the Dutch side of an interconnection point (TSC Appendix 8) with capacity at the other side of the flange.
In a capacity conversion booking process, the original unbundled contract will be decreased by the same amount of capacity that the shipper has successfully contracted in the auction for bundled capacity. For the newly acquired contract for firm bundled capacity, the shipper pays the valid regulated network point tariff and the monthly factor stemming from the original unbundled capacity contract, plus an auction surcharge if that was the outcome of the auction.
Booking within-day capacity on an FCFS basis
The announced FCFS within-day product will be available on PRISMA starting 1 January 2018. You can book the product on PRISMA in the FCFS booking section depending on availability. It will be an end-of-day product, based on the hours: x/24th of daily tariff. Booking of this within-day FCFS capacity requires a minimum lead time of 1 hour before the expected gas flow. The processing will be the FCFS process as described on our website.
Balance Agreement on TTF-B expanded with user categories GIN and GIS
For a while now, we have seen extensive growth of green gas supply in the Netherlands, either from parties directly connected to the GTS grid or within the grids of the Distribution System Operators (DSOs). Because GTS aims to facilitate green development as much as possible, we will expand our Balance Agreement service with the user categories for green gas suppliers (GIN and GIS) as of 1 January 2018.
When a shipper transports gas to domestic physical network points, he can transfer (part of) his balance risk to another shipper. To do this, the shipper must enter into a Balance Agreement with another shipper. Currently, a Balance Agreement on TTF-B is facilitated by GTS for the user categories G1A, G2A, G2C, GXX and GVV.
By adding GIN and GIS as user categories in the Balance Agreement service, balance receiving parties can cover the complete balance risk of their portfolio, even if their customers are green gas suppliers.
Programme changes for TTF in shipper IT systems
To make sure your programmes will be handled as expected on 1 January 2018, you need to be aware that the enlarged TTF market area, due to the integration of the BBL pipeline into the TTF market area, encompasses a virtual trading zone, operated by a Trading Zone Manager (in effect, GTS) and two sets of balancing rules (GTS and BBL), each operated by either GTS or BBL and within its own regulatory framework.
IT changes are needed in the programme process (GTS shippers) and the nomination process. BBL and GTS have an IT system available for testing purposes. All parties can send their testing requests to firstname.lastname@example.org.
The main changes are:
- All trades on TTF must be included using the reserved shipper code GSTPTRADE. This means the specific counter-shippers for all TTF trades should no longer be mentioned in the programmes, and all TTF trades should be enclosed using GSTPTRADE as counter-shipper for the aggregated traded volume. This also applies to all TTF trades closed on an exchange.
- As IP Julianadorp ceases to exist, this network point should no longer be included in programmes.
For more detailed information on the requirements, see the document ‘GTS BBL integration – Operational document’, published on the GTS website.
CHANGES TAKING EFFECT IN THE COURSE OF 2018
Change of auction and tariff decision dates
The date for the yearly auctions and the timeline for submitting and establishing the transport tariffs will change in 2018. As of 2018, the annual yearly capacity auctions on PRISMA will start on the first Monday of July. From 2018 onwards, the yearly tariff decision will be published no later than thirty days before the annual yearly capacity auction. We expect the tariff decision to be published in May. We will submit our tariff proposal in March.
Neutral Gas Price – implementing neutral gas price calculation at PEGAS
As of 1 February 2018, a different method of determining the neutral gas price will be implemented. GTS will use the spot prices of the PEGAS (EEX) stock market for the daily determination of the neutral gas price. If (unexpectedly) the neutral gas price cannot be determined, we will use the latest neutral gas price available. Both changes will be added to the Transport Code Gas TSO.
Change in the Edigas messaging AS4 – taking effect on 3 May 2018
Following up on previous mailings and news messages, we would like to remind you that after 3 May 2018, GTS will no longer support the use of the AS2 protocol. The mandatory communication method will be online (via AS4) using TLS1.2 in HTTPS. This means shippers can no longer send nominations via AS2 after this date. If you have any questions about this change, please contact the Nomination Support Team (+31 50 521 2700 or email@example.com). For more information about the use of the AS4 protocol, click here.
OTHER DEVELOPMENTS EXPECTED IN 2018
Shippers’ meetings: save the dates
We will again organise shippers’ meetings in 2018, two of which have already been scheduled. The first meeting will be held in February during E-world in Essen (6–8 February). Another shippers’ meeting is planned in June 2018 in Hoofddorp (Netherlands). More details will follow in due course.
Creditworthiness code change proposal decision ACM – update
The code change proposal with regard to creditworthiness as presented in the shippers’ meeting on 8 June 2017 has been submitted to the Dutch regulator ACM. We are currently in the process of submitting additional data to ACM at their request. As soon as ACM has published a decision, you will be informed.
Linepack Flexibility Service – change of tariff
The European Network Code Balancing (NC BAL) stipulates that end-of-day balancing costs for shippers should be higher than within-day balancing costs. Every year, the Dutch regulator ACM requests data from GTS to be able to check if this is the case in the Dutch balancing regime.
From that data, ACM concluded that the current tariff for the Linepack Flexibility Service (LFS) needs to be raised from 0.4% to 0.8% to be able to meet the NC BAL requirement in the coming years. GTS discussed this intended change with representative bodies, who informed us that, in their opinion, the end-of-day costs will rise too much.
GTS subsequently investigated the feasibility of another solution that would meet the NC BAL requirement while keeping the tariff rise as low as possible. We found such a solution in not having a fixed percentage in the Transport Code Gas TSO, but a formula based on which the percentage required can be calculated each year. For 2018, this means that the outcome will probably be a rise of less than 0.8%. The code change proposal will be submitted to the Dutch regulator ACM in the near future. The changed LFS tariff will come into effect after ACM has published her decision on this change.
Customer satisfaction survey
In 2018 (Q3), we will invite you to participate in a customer satisfaction survey.
For more information on the these items, you can always contact our Customer Desk via + 31 50 521 33 33 or firstname.lastname@example.org.
We wish you a merry Christmas and a prosperous New Year, and look forward to meeting you in 2018.
Sales specialist team,
Karl, Liesbeth, Cora, Gea, Henk Theo, Jaap, Jan, Jos, Luuk, Marit, Marja, Paula, Peter and Karen
Implementation of Network Code on harmonised transmission tariff structure (NC TAR)
GTS and ACM (the Dutch regulator) jointly organised stakeholder sessions on the NC TAR implementation, leading to a GTS implementation proposal submitted to ACM on 24 October 2017. With our proposal, we aim to maintain or strengthen the competitive position of the Dutch gas network and the liquidity of the TTF in order to support a well-functioning gas market and promote the functioning of our highly interconnected network. The key elements of the proposed tariff structure are shown in the table below.
Currently, ACM is assessing our proposal and (if useful) considering alternative options through consultation meetings. The last consultation session organised by ACM will be held on 19 December 2017 in The Hague. On 1 March 2018, the formal consultation period will start with the publication of the draft implementation decision by ACM. It ends on 1 June 2018, after which ACM will work on their final decision, which is expected on 1 November 2018 at the latest. The new tariff structure will be effective as of 1 January 2020. More information can be found in the shipper information section on our website and on ACM’s website.
Introduction of Virtual Interconnection Points (VIPs)
In accordance with the network code for capacity allocation mechanisms (NC CAM), VIPs must be introduced before 1 November 2018. GTS is planning to do this with the neighbouring market areas in Belgium and Germany. GTS will implement an H-gas VIP with Belgium, starting 1 October 2018, which will first be a bookable point in the monthly auction of September 2018. After the introduction of the VIPs, the individual interconnection points will cease to exist. As a result, existing (capacity) contracts with an end date later than 1 October 2018 will be transferred from the underlying IP to the new VIP. Whether we will be able to implement the H-gas and L-gas VIPS with Germany as planned will depend on the planning of the German TSOs, which is uncertain.
GTS organised a market consultation session on 13 October 2017, and a follow-up session is scheduled for 20 December 2017. In this follow-up session, we will present the results of the consultation concerning the implementation of the VIPs. In this follow-up session we will summarise the main elements of our implementation proposal and discuss the views we received from market parties. The consultation report is available on our website. More information can be found in the shipper information section on our website.
Market integration between GTS and BBLC
Both GTS and BBLC organised written consultations in 2017 on the market integration, leading to an integration of their transport systems into an enlarged TTF market area, starting 1 January 2018. As a result of this integration, interconnection point Julianadorp will cease to exist from a commercial point of view. GTS and BBLC will remain independent TSOs. Integration increases GTS’s buffer for balancing and therefore reduces costs for shippers and may contribute to a further expansion of TTF. More information can be found on the BBLC website and on the GTS website.