Newsletter GTS October 2019

Gasunie Transport Service newsletter for October 2019 is out now

Dear customer,

We are proud to present our second newsletter this year. Seeing as we have been very busy since the July 2019 edition, we have lots of news to share with you this time. Our team sees to it that sales and customer services for Gasunie Transport Services run smoothly for you. Our job includes giving you a heads-up on upcoming developments at our company that may be relevant to you, so as to enable you to make timely arrangements in anticipation of these developments.

The information in this newsletter will bring you fully up to speed on what you can expect from us over the coming period.
If you have any questions after reading this newsletter, our Customer Desk staff will be happy to help you.

I hope you enjoy reading the newsletter!

Harmen Kremer
Manager Sales & Customer Service

Final NC TAR implementation phase

Over the past few months, we have kept you up to date on the transition to the new NC TAR tariff structures (Network Code on Harmonised Transmission Tariff Structures for Gas) as of 1 January 2020. In the July newsletter, we went into various elements of the transition and implementation. We subsequently published two calculation tools and the English translation of the three updated gas network codes on our website in September and launched the consultation on the draft TSC 2020 on 17 September 2019. With over two months to go until 1 January 2020 and as we enter the final implementation phase, we would like to update you on the following:

  • Administrative migration of capacity contracts
  • Invoice changes
  • Conversion of backhaul products to entry and exit capacity
  • Introduction Virtual Point for distribution Companies (VPC)
  • Changes to the GTS website

Administrative migration of capacity contracts

The NC TAR tariff structure differentiates 5 standard capacity products: yearly, quarterly, monthly, daily and within-day capacity products. For each of these standard products, the Dutch Authority for Consumers and Markets (ACM) has established the reserve prices for 2020 in its tariff decision 2020. By limiting each booking to one capacity product, a 1-to-1 relationship is created between booking, capacity product and reserve price from contracting through to billing.

As explained in our July newsletter, capacity bookings contracted after 3 July 2019, with a starting date in or after 2020, are handled as per the new tariff structure: each capacity booking concerns one of the five possible capacity products. Existing capacity bookings (with an end date from 1 January 2020) are currently still subject to the current tariff structure. After migration, these existing bookings, too, will have been recorded based on the new tariff structure, meaning that each capacity booking will be for one of the 5 standard capacity products. The migration therefore basically boils down to a change in how existing bookings are recorded, with a view to bringing them into line with the new tariff structure (with standard capacity products and reserve prices), while transmission agreements will remain unchanged.

The following will provide a detailed description of how we will migrate bookings, specifying also the principles and timetable we will go by. The migration of certain bookings requires our special attention, and we will be contacting these capacity holders personally to provide further explanation.

Migration principles
The following basic principles apply:

  • All bookings with an end date after 1 January 2020 that were made based on the current tariff structure and that do not have a 1-to-1 relationship with a standard capacity product ('existing bookings') will be migrated.
  • Existing bookings that will no longer have contracted and usage rights in or after 2020 (i.e. zero-capacity bookings) will not be migrated.
  • Only the part of existing bookings relating to the period beyond 1 January 2020 will be migrated. Capacities contracted for up to and including 31 December 2019 will continue to be subject to the current tariff structure and will, therefore, not change. Migration will not change the usage rights during the term of existing bookings. 
  • Existing bookings will be migrated to a set of standard products in the way that is most favourable for the shipper. For details, please refer to the migration method section below.
  • As soon as possible after migration, all shippers with existing bookings that have been migrated to the new tariff structure will be briefed on the change to how their bookings are recorded. Also see the communication section below for details.

Migration method
How will bookings be migrated to standard capacity products?
Existing bookings will be recorded differently, so as to ensure they are for one of the 5 standard capacity products. For the quarterly, monthly, daily and within-day capacity products, the start date, start time and duration are the same for interconnection points and domestic points. For the yearly capacity products, these details vary. The rule for interconnection points is that, based on Article 9 of the Network code for Capacity Allocation Mechanisms (NC CAM), a yearly capacity product commences on 1 October of any one year. For domestic points, a yearly capacity product can commence as of any gas month.

Example: an existing yearly booking (with a monthly factor of 1/12) from 1 March 2018 to 1 March 2022 will, for the period starting 1 January 2020, be recorded as multiple yearly capacity products:

  • For domestic points, this will result in 3 yearly capacity products for the periods:
    i) 1/1/2020 to 1/1/2021, ii) 1/1/2021 to 1/1/2022 and iii) 1/1/2022 to 1/3/2022.
  • For interconnection points, this will result in 3 yearly capacity products for the periods:
    i) 1/1/2020 to 1/10/2020, ii) 1/10/2020 to 1/10/2021 and iii) 1/10/2021 to 1/3/2022.

How we apply capacity product optimization
A small number of bookings will be optimised through this migration. When a 'higher-level' capacity product is cheaper, the capacity products will be switched to the higher-level capacity product. When the new booking covers a longer period than the old one, only the contracted capacity will be booked for the extra period. No usage rights will be allocated for this extra period. Billing for migrated bookings will be based on the yearly capacity product, whereby the reserve price of the yearly capacity product will be charged over 12 months.

Example: an existing booking covering the period from 1 January 2020 to 30 November 2020 will, in principle, be recorded as 3 quarterly capacity products and 2 monthly capacity products. However, the yearly capacity product for the period covering 1/1/2020 to 1/1/2021 is cheaper. This existing booking will, therefore, be switched into a yearly capacity product, with usage rights of zero for December 2020. Billing for all months from January 2020 to December 2020 inclusive will be based on the formula described below in the ‘Invoice changes’ section.

Capacity product value calculation using duration
For billing purposes, the NC TAR tariff structure introduces the concepts of 'product duration' and 'invoice duration'. The ‘product duration’ is the term for which the capacity product has been contracted in days (for a within-day product, the product duration is 1). The ‘invoice duration’ is the number of days in the month to which an invoice relates (for a within-day product, the invoice duration is the number of hours for which the within-day product has been booked). This means that when a capacity product is provided over a period that includes a leap day, the invoice will be for one extra day.

Example: under the new tariff structure, a yearly existing booking covering the period from 1 May 2019 to 1 May 2020 will be turned into a yearly capacity product for 1/1/2020 to 1/5/2020. This yearly capacity product has a 'product duration' of 366 days because it includes the month of February 2020, which has an extra day because 2020 is a leap year. As a result, the invoice for January 2020 will be for 31/366th of the yearly capacity product. Refer to the section on invoices for further details.

Transferred transport capacity (i.e. a ToC) will be based on the product duration of the original booking. When transferring usage rights (i.e. ToU), these will, for technical reasons, all be recorded as a yearly capacity product. For you as a shipper, this will not have any financial consequences and not impact on your usage rights either.

Timetable and communication
When will the migration take place?
Existing bookings are set to be migrated in week 45 (4-8 November 2019). In late December 2019, any capacity contracts that were booked under the current tariff structure after the initial migration will be migrated.

Can I continue to freely book or trade capacity during the migration period?
During the migration period, you can continue to contract capacity as normal. We do kindly ask you, however, to not contract a transfer of transport capacity (ToC) and/or usage rights (ToU) on PRISMA on Tuesday 5 and Wednesday 6 November. Transfers of transport capacity and/or usage rights relating to bookings that are to be migrated may return an error message. On these two days, please send any ToC and ToU requests to our Customer Desk using the transfer form. We will then take care of them for you.

How do I know which bookings have been migrated and how?
As soon as possible after migration, you will receive an update on the change to how your bookings are recorded. You will receive a list of all your migrated bookings. This will be an Excel file itemising all your existing bookings and their conversion into standard capacity products.

Invoice changes

Implementation of NC TAR will also bring changes to the layout of the itemisation of the invoice as of 1 January 2020. The cover page will remain unchanged. The changes concern only the 'Contracted',' Correction Contracted', and 'Exceeding' invoice.

What will change on the 'Contracted' and 'Correction Contracted’ invoice?
As of 1 January 2020, itemisation of the invoice will be made up of 2 Excel worksheets. The first worksheet 'general' contains the general customer and booking details. The second worksheet  'specification' lists all billable capacity products for the gas month in question. The new information fields on the second worksheet are the following:

  • Capacity product: the capacity product contracted (yearly, quarterly, monthly, daily, within-day)
  • Product: entry/exit - firm/interruptible.
  • Product duration: term of the product in number of days (for a within-day product, the production duration is 1)
  • Invoice duration: the number of days in the gas month to which an invoice relates (for a within-day product, this is the number of hours for which the within-day product has been contracted).
  • Reserve price: the reserve price for the capacity product in question

How is the invoice amount calculated?
The invoice amount for the contracted firm entry and exit capacity products is calculated as specified in Article 5.1.2. of the draft 2020 TSC, i.e. as follows:

 

 

where:

  • ACf         =   amount chargeable in euros for the specific firm capacity product
  • Cap        =   capacity contracted in kWh/h;
  • RP          =   the reserve price for the specific capacity product;
  • AP          =   auction premium, if applicable;
  • Hm          =   invoice duration;
  • Hp           =   product duration;

The calculation method used for interruptible and wheeling capacity products is specified in Articles 5.1.3. and 5.2.1. of the draft 2020 TSC.

What will change on the 'Exceeding' invoice?
The second worksheet of the itemised invoice contains the reserve price as the exceeding tariff. The reserve price for the exceeding in question equals the tariff of the monthly capacity product on the network point in question.

Are there any sample invoices available?
Yes, there are. Click  here to go to our website where you will find sample invoices.

Conversion of backhaul products to entry and exit capacity

As of 1 January 2020, entry and exit capacity contracting costs will be covered by the all-in entry and exit tariffs. As a result, the separate entry and exit capacity backhaul service will be discontinued as of 1/1/2020. Until 1/1/2020, backhaul products will be offered in the direction opposite of the physical flow of gas. We will continue to offer capacity in the direction opposite of the physical flow of gas after 1/1/2020. The backhaul product will be replaced by firm capacity, while backhaul level 1 will be replaced by interruptible capacity. This change may have an impact as of 1/1/2020 on the combined capacity products at interconnection points offered on PRISMA.

Introduction Virtual Point for distribution Companies (VPC)

As of 1 January 2020, the same reserve prices apply to all LDC exit points. This will enable us to optimise/simplify the booking and billing process. In order to minimise the number of contracts, from 2020 GTS is going to add up all LDC exit capacities for each shipper and record them on a new (virtual) LDC exit point: the Virtual Point for distribution Companies (VPC).

We have put together an Excel file to explain to shippers how the capacities and costs are calculated. Visit our website for more information about booking capacity on LDC exit points. You will find the Excel file at the bottom of the page. Allocations will continue on the individual LDC exit points.

Due to the discontinuation of the backhaul service mentioned above, the current service on the VPI will be amended from 1 January 2020. Shippers will need to book sufficient entry capacity on the VPC for gas that is fed into the GTS network from a distribution network. They can do so by filling in the ‘Request for entry and/or exit capacity’ form and sending it to our Customer Desk.

Changes to the GTS website

The new tariff structure and conditions will also bring various changes to our website and the request forms. A number of these changes have already been implemented. Given that the current tariff structure will continue to be effective for the remainder of 2019, we cannot discontinue it yet. This is why we have opted to add a 'What will change from 1/1/2020' section to existing pages on our website to highlight changes. This way, we can maintain the current way of working and be clear on what is about to change. We expect to replace all information about the current tariff structures with information about the new tariff structure in late 2019/early 2020.


 

VIPs to go live on 1 April 2020

On 20 May 2019, we announced the implementation of a new hybrid model for virtual interconnection points (VIPs). This new model allows for existing contracts to continue to be linked to the interconnection point (IP) for which they were entered into. Capacity owners can opt to migrate their capacity to the VIP. It will no longer be possible to book new capacity on the IP, only on the VIP.

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.

 

ZEBRA gas pipeline to be part of our network from 2021

From 2021, the extra high-pressure networks in the south-west of the Netherlands, including the ZEBRA gas pipeline, will become part of our national grid. An integration project team has meanwhile been put together to work on preparations at Gasunie and the GTS organisation. Integration involves both technical and commercial aspects. Legislation and regulations, general terms and conditions (TSC) and tariffs governing our national grid will also govern the extra high-pressure networks.

New network points
The industrial network points that currently receive gas from the ZEBRA gas pipeline will be included in Appendix 1 to the TSC 2020 in late December 2019 and receive the 'planned' status. As soon as the network points have been set up, these network points will be published on PRISMA and we will advise the connected industries that they can start booking their transport capacity for the period from 1 January 2021 on PRISMA, or have another party do so on their behalf. We expect to wrap up the set-up in the second half of 2020.

The physical link between the ZEBRA network and the GTS network will be created through the Zelzate (entry) location and will be part of the VIP-BENE. It goes without saying that gas can be supplied to the ZEBRA network from all GTS entries.

Over the coming period, we will be contacting the connected industries affected for further explanation and alignment.


 

Incremental capacity demand survey results to be published soon

From 1 July 2019 to 25 August 2019, market parties had the opportunity to declare their non-binding demand for incremental capacity at the interconnection points in relation to the incremental capacity process for the 2019-2021 period. The report with the results of this survey will be published on our website in late October 2019. Go to our website for more details about the incremental capacity process.


 

What will change at GTS following the purchase of network losses in distribution networks by distribution network operators?

As of 1 January 2020, the distribution network operators will be required by law to cover network losses on their network. For the purpose of settling these network losses, the new GMN gas take-up category has been added to the Allocation Code Gas and the Transmission Code Gas - TSO. The Allocation Code Gas specifies how these network losses in the distribution networks are allocated to the shipper. In determining a shipper’s LDC exit capacity, the annual volume for the GMN gas take-up category is used along with the fractions and factors of the G2C gas take-up category, in line with the amended Transmission Code Gas - TSO.


 

Changes to Gasport and B2B in late 2019

As a result of standardisation and optimisation of how we provide information, a number of Gasport features and one B2B feature will be changed. We expect these changes to Gasport and B2B to be implemented in December 2019.

Changes in Gasport

  • We will consistently use the kWh unit for all energy volumes, while measurements and allocations will also be shown as MJ. Other units, i.e. MWh, GJ and m3(n;35,17) will no longer be used.
  • At present, several details can be accessed through multiple menu options or are available both in Gasport and on our website. Given that this is all the same information, we want to deduplicate it. The following menu options will, therefore, disappear:
    • The 'Dispatching - Balancing - LFS' menu option will no longer be available. This information will continue to be accessible using the 'Historical – Balancing - LFS' menu option.
    • The 'Dispatching – NRT Allocations - NRT peak supply threshold' menu options will be deleted. This information, however, will continue to be available in the 'Historical – Offline allocations – Peak Supply – NRT vs Offline threshold' menu.
    • The 'Dispatching – Balancing factors - Balancing parameters' and 'Historical – Balancing factors - Balancing parameters' menus will both include a link to our website where 'Damping parameters' and 'Buffer zones' will be published.
  • In the past, we added two information blocks to Gasport to clarify that measurements and allocations no longer change after version 4. As this is now perfectly clear both to shippers and to connected parties, and they have set up their processes accordingly, these information blocks can be removed. This concerns the following blocks:
    • The 'update block' as shown on the right-hand side of the Gasport homepage, specifying whether or not measurements or allocations have changed.
    • The 'Historical - Offline allocations – Change information' menu option.
  • And finally, the 'Historical - Balancing – Quality steering signal' menu option will be deleted. In 2011, the report shown was agreed upon as a measure to specify the quality level. Given that the information can be deduced from the settlement details and the market has meanwhile developed a clear view of the quality of the POS and the SBS, this report has become surplus to requirements.

Changes in B2B
The 'Analysis Monthly Summaries' B2B service will be discontinued. This service aggregates allocations at gas month level. Given that this data can be deduced from other B2B services, it no longer needs to be presented here.


 

Addition of counterparty nomination in confirmations (18G)

At virtual network points, it is compulsory in Edig@s version 5.1 to include the (original) nomination of the counterparty in the confirmation (NOMRES) messages, alongside the actual confirmation. The codes used in the NOMRES message indicate the meaning:

  • 16G: confirmed values to shipper
  • 18G: nominated values by counterparty

So far, the counterparty’s sending of the nominated values (the 18G feature) is still no part of our NOMRES message on TTF, due to the lack of clarity in the specification of the flow direction. After consultations in the Edig@s working group, it has now become clear how the 18G feature is to be implemented,

and we are going to proceed with that, starting with the current Edig@s version 5.1 NOMRES message:

  • For most of the nominating parties, the 18G feature is already part of the messages. In these messages, the flow direction of nominations of the counterparty is the same as the flow direction of the shipper’s confirmation both for entry (Z02) and exit (Z03), as shown in the figure below.
  • We will - as recommended by the Edig@s working group - adhere to this way of working in our NOMRES messages. The figure below shows an example of the current Edig@s message into which the 18G feature has been incorporated.

We expect to have the 18G feature, the sending of the nominated values by the counterparty, implemented in our Edig@s NOMRES message by the end of this year. We kindly ask you to check your current systems with respect to validation and processing of confirmation messages, so as to ensure that when we start sending out new NOMRES confirmation messages for TTF, this will not pose any problems. We will inform you of this change in Edig@s 5.1 again one week before the exact start date.

In mid-2020, we will switch to Edig@s version 6.0. We will update on this further when the time comes.