British use-it-or-lose-it capacity in place by 30 September

Albert Evans

20-Aug-2014

Shippers with long-term capacity booked on British interconnectors could face losing it if they under use the pipelines from 30 September onwards, under energy regulator Ofgem’s new rules announced on Wednesday.

The regulator has formally announced that it will implement the changes, which are to stop players hogging long-term pipeline capacity and to bring the procedure into line with EU regulation.

From 30 September onwards system operator National Grid will begin to monitor shippers use of capacity they have booked in six-month periods, running 1 October- 31 March and 1 April-30 September.

Those considered to be underusing their capacity in two consecutive periods at the same interconnector point run the risk of having their capacity reallocated by National Grid.

“This situation may occur where there is physical capacity to flow more gas, but the right to flow is tied up and is being hoarded by a network users so that others cannot gain access to it,” said Ofgem in its decision letter.

The enhanced regulatory oversight of capacity use, is part of a drive to bring British procedure in line with the EU’s third energy package and the common congestion management procedure.

Other changes include splitting off the Dutch BBL and Belgian IUK pipelines, which currently are part of the Bacton entry point, into a separate entry point in order to better facilitate changes to import and export procedure.

The overarching aims of the EU’s package is to harmonise procedure across the European gas market and encourage greater cross-border flows and efficiencies.

The changes are a modification to the uniform network code, which governs the movements of gas throughout the British system. Albert Evans

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