German natural gas exit capacity auction cancelled on bidding interest

Natural gas traders persistently attempting to out-bid each other for October transmission capacity from Germany into Austria has forced the grid operator to cancel the auction. This unprecedented action was taken by grid operator Open Grid Europe (OGE) as there was little indication interest would die away before delivery commences on Wednesday.

It is possible the high interest in this auction and another on the border with the Czech Republic have been boosted by the possibility to flow gas into Ukraine via Slovakia.

The Oberkappel exit capacity will now be sold as part of the usual day-ahead capacity for the point.

Last week OGE told shippers that with the possibility the monthly auction would not finish soon, interested parties had until 18:00 Berlin time on Monday to enter their final bids before the operator would cancel the sale.

Data from capacity platform PRISMA then showed that a further extension was made until 09:00 on Tuesday.

The sale, which was for 1.7GWh/hour of capacity, initially began on 15 September.

OGE confirmed it was the first time it had scrapped a capacity auction.

The regulated price for the monthly unbundled capacity at Oberkappel was set at €0.37/kWh/hour, although after 54 bids the price had increased to €0.91/kWh/hour.

Typically Oberkappel monthly capacity auctions struggle to climb much above their regulated price, PRISMA data shows.

The rocketing interest at the German-Austrian border for October capacity mirrors similar events last week when German operator ONTRAS sold monthly unbundled capacity at the Deutschneudorf exit point into the Czech Republic. Although that auction did finish, it too was held over two weeks.

The price cleared at €0.67/kWh/hour after 45 rounds, having had a regulated price of €0.24/kWh/hour. Again this monthly auction is typically not as subscribed as it was this time.

At the time of the Deutschneudorf auction some traders speculated if the new interest to ship gas out of Germany’s southeast was to enable shippers to deliver gas through to Ukraine.

Ukraine’s incumbent is also likely to be interested in the capacity. Earlier in the month a senior official at the company confirmed to ICIS that from October it planned to trade the hubs in Germany and Austria ( see ESGM 15 September 2014 ). Tom Marzec-Manser and Thomas Rodgers