Austrian regulator to enforce gas capacity conversion service

Source: Heren

2017/07/12

Austrian energy regulator E-Control is planning to enforce the introduction a capacity conversion service for system users affected by mismatched capacities at the country’s borders, the company said on Tuesday.

The watchdog launched a consultation for amending the country’s natural gas act to be in line with the EU’s capacity allocation mechanism (CAM) network code, which requires all transmission system operators (TSOs) across the bloc to offer conversion services by 1 January 2018.

Under CAM, firm capacity can only be sold as a bundled product made up of entry and exit capacity on both sides of an interconnection point. This is a problem for shippers who already own capacity on one side of the border point, as they are unable to acquire the missing half of the entry/exit capacity by purchasing a bundled capacity product without paying a second time for the original capacity.

According to the country amendment, grid operators will have to offer a capacity conversion services for any mismatched unbundled firm entry or exit capacity that was booked up to and on 6 March 2017.

The conversion could be executed once the system user has successfully participated in an annual, quarterly or monthly auction for bundled entry or exit capacity. System users will have to notify the TSO within five working days of the auction, which will need to clear the conversion with E-Control. Then, the freed up capacity will be offered in following auctions held by the network operator.

Trade region update

E-Control also announced a consultation on updating the regulatory framework of the proposed Austria-Czech market joining, called the trade region update (TRU).

The watchdog is planning to introduce a €7.27/KWh/h system operator service fee for nominations for exit capacity leaving the Austrian market and matching entry on the Czech hub as this supplementary service is not yet covered in the Austrian gas act.

The TRU will connect the Austrian and Czech markets by enabling shippers to swap gas volumes between the two hubs. Slovak TSO Eustream will provide the infrastructure that will allow bi-directional flows as the Austrian and Czech markets are physically not connected.

E-Control previously said the TRU would run in a pilot phase from 1 October for 12 months, and a total quantity of 100,000KWh/h/year will be offered.

Stakeholders have until 2 August to comment on both consultations.

Click here for an ICIS briefing on the TRU project. david.simon@icis.com