Welcome to Shippers Forum. Jeppe Danø, 11 June 2014

Transcription

1 Welcome to Shippers Forum Jeppe Danø, 11 June 2014

2 Agenda Lunch 13:00 Welcome 13:15 New railway between Copenhagen and Ringsted 13:30 Offshore forum briefing 13:45 Status on new balancing model 14:00 Tariff-structure development in Denmark and ENTSOG network codes 14:15 Coffee break 14:45 Security of supply in the light of the Ukraine conflict 15:00 Status on the Ellund interconnection point Energinet.dk Storage 15:20 End of programme

3 Gaspoint Nordic Closer cooperation with EEX: EEX acquires 50 % of GPN shares ECC will be new clearing partner 1 October 2014 New ownership structure: (Subject to the approval of the respective competition authorities) Change: New services 1 Oct 2014 Open 24/7 to support the new balancing model EEX will support operational processes, for instance handle dayto-day market supervision 50 % 50 % Future development Gaspoint Nordic will develop its services in close cooperation with EEX and in line with European standards 3

4 Gas Public Service Obligation (PSO) subsidies Gas PSO scheme approved 1 December 2013 Gas PSO subsidies are given to the owner of the upgrading plant for bionatural gas Five upgrading plants have been approved for receiving gas PSO subsidies DKK Gas PSO subsidies in ,135 Gas PSO subsidies in 2014 (January to April) 7,521,747 4

5 Customer Satisfaction Survey 2014 process Trustworthy, competent, innovative Survey after shippers forum: Questionnaire Quantitative survey: Questionnaire sent to 151 individuals shippers, gas suppliers, authorities, partners Response rate above 50 % Statistical treatment and analyses initiated End result inferior to the result in 2012 Satisfied and very satisfied Today s system places minor suppliers at a huge disadvantage. Hopefully, the new balancing system will equalise the present benefits of large-scale operations. Energinet.dk has become better at catching the market s needs when expressed, but does not understand the needs intuitively. There has been a lot of bother with the timing of auctions, opening hours and other issues that have been discussed at shippers forums. But it seems to be improving. 100,00% 95,00% 90,00% 85,00% 80,00% 75,00% År 2014År 2012År 2011År 2010År 2009År 2008År 2007År Year

6 New railway between Copenhagen and Ringsted Shippers Forum 11 June 2014 Helle Øgaard 6

7 M/R Køge Railway New transmission pipe Existing transmission pipe 7

8 M/R Ringsted Existing transmission pipe New transmission pipe Railway 8

9 Tie-in at Ringsted 9

10 New railway 10

11 Supply of Copenhagen and Sweden We have closed the transmissions valves at Køge and Ringsted 11

12 Blowdown of the transmission pipeline This morning at 4 am, the transmission pipe between Ringsted and Køge was blown down After the blowdown, the pipe is being airswept Tomorrow the tie-in starts Expected end date: 17 June 2014 Data: 19 km pipe Blowdown from 20 to 0 bar Approx. 150,000 Nm 3 were blown down Duration of blowdown: 1½ hours 12

13 New railway Commercial solution Christian Rutherford 13

14 Need for a tailored solution 14

15 Maintaining the 1-zone balancing model 2 separate tenders: Tender for zero injection Price of no injection at DONG Storage Up to 11 gas days (9 to 19 June) Payment known up front Tender for withdrawal option Energinet.dk calls for withdrawal day-ahead Call depending on expected demand (Copenhagen and Sweden) Payment depends on number of options activated 15

16 Results Total price of commercial solution not yet known Depends on actual demand Expected price: 7-10m DKK (based on historical demand) Cheaper than the prospective physical solution 2 stopple operations costing each 7.5m DKK Inspection twice a year afterwards (between railway and motorway!) Final result: possibly cheaper train tickets 16

17 Offshore Forum - Details Shippers Forum, 11 June 2014 Claus Møller Petersen

18 Agenda 28 May programme Background Energinet.dk approach Scenarios Conclusion

19 Program Session 1: Release and presentation of a study by Mærsk, DONG and Energinet.dk Session 2: Perspectives for future optimisation from Oil-Gas- Denmark, Gassco and key Danish offshore stakeholders 28 May

20 Background The feasibility study is initiated at DUC s request and covers the potential moving of compression of gas from offshore to Energinet.dk s compressor station at Egtved.

21 Energinet.dk approach Maximise the Danish North Sea production Increase the overall infrastructure energy efficiency Reduce overall compressor emissions Maintain the capacity, the current high level of security of supply and the on-spec gas quality in the transmission system

22 Scenario 1 Lowering the gas pressure in both Nybro-Egtved pipelines. Nybro Egtved Nybro-Egtved North Low Pressure Nybro-Egtved South Low Pressure

23 Scenario 2 - Low pressure is delivered in one of the two pipelines (gas from Tyra) - High pressure is maintained in the other pipeline (gas from Syd Arne and Hejre) Nybro Egtved Nybro-Egtved North High Pressure Nybro-Egtved South Low Pressure Nybro-Egtved North Low Pressure Nybro-Egtved South High Pressure

24 Conclusion Yes, reducing pressure ex Nybro/Tyra is possible!! Currently, two alternatives analysed: 1. Pressure reduction in both pipelines 2. Pressure reduction in only one of the pipelines

25 Q: Have you made specific calculations regarding the four parameters mentioned? Maximise the Danish North Sea production Increase the overall infrastructure energy efficiency Reduce overall compressor emissions Maintain capacity, the current high level of security of supply and on-spec gas quality in the transmission system A: No, we have made no calculations of energy efficiency etc. - only of the pure power price for running the compressor station. However, the four issues will probably be part of a final business case. Q: Will you need to carry out any onshore extension work on the compressor station if the project materialises? A: No, sufficient compressor capacity is available to Energinet.dk, and the specific case is based on a volume that would correspond to approximately the capacity of one (out of the 4) compressor unit working full time, so no additional compressor units are required. We only have to do some pipe and valve reconfiguration work. 25

26 Status on new balancing model Christian Rutherford and Julie Frost Szpilman 26

27 Themes Status on the balancing project Frequently asked questions during recent months Next steps towards 1 October 27

28 Status on the balancing project 28

29 Since last shipper meeting Focus on IT development With Gaspoint Nordic, the DERA, DSOs and shippers Preparing Rules for Gas Transport Getting details in place 29

30 Frequently asked questions 30

31 Frequently asked questions 1 of 4 Will the nomination fee prevail? Answer: Yes, we will keep the nomination fee as it is now because nominations at the Exit Zone will still be required as backup for the forecaster. Will there still be an overrun charge? Answer: Yes. The overrun charge is not directly influenced by the new balance system. However, Energinet.dk expects that the overrun charge will be more easily prevented after 1 October 2014, due to more frequent offtake data and within-day capacity products. Will the removal of the free balance margin also involve BNG entry? Answer: Yes. No balance margin is feasible in the new model. 31

32 Frequently asked questions 2 of 4 Can the balance model described in February s model paper be considered final? Answer: Yes, Energinet.dk will implement the full cash-out model with the possibility of changing the commercial balance position through trades within-day Which communication standards will Energinet.dk use after 1 October 2014? Answer: Energinet.dk will continue to use the same three standards applied today, which are: Flat file XML Energinet.dk Online 32

33 FAQ 3 of 4 Will Energinet.dk continue with the small 2 per cent adjustment, given the new trading hours at Gaspoint Nordic? Answer: Yes. As liquidity at night is expected to be lower, Energinet.dk also expects bigger bid-ask spreads and consequently more marked fluctuations in gas prices than during the day Thereby a higher small adjustment is required at night to produce the right incentives to balance How will Energinet.dk communicate when E(SCB) is in the yellow zone and Energinet.dk needs to trade? Answer: From 1 October 2014, Energinet.dk will use a market animation service through EEX Balance position available at all times at Energinet.dk Online 33

34 FAQ 4 of 4 How will the new opening hours at Gaspoint Nordic affect Energinet.dk s balance trading: Answer: Within-day data period N.A. 06:00-12:00 06:00-15:00 06:00-18:00 06:00-21:00 06:00-00:00 Within-day data and E(SCB) published (only E(SCB)) 13:45 16:45 19:45 22:45 01:45 Energinet.dk yellow zone trading time 11:05-11:15 14:05-14:15 17:05-17:15 20:05-20:15 23:05-23:15 N.A. 34

35 Next steps towards 1 October

36 Next steps Updated communication via Communication via Energinet.dk Online: Rules for Gas Transport: Public consultation mid-august Approval from the DERA to be decided late September

37 Thank you! 37

38 Tariff Method Modifications: 2014 and 2015 Nina Synnest and Frederik Kjerulf 11 June

39 Timeline for tariff method revision Until October 2014: Method application to the DERA: Differentiated tariffs Capacity:commodity ratio (Variable commodity charge) Over-recovery principles Until October 2015: New tariff method (version 2014) approved as from December 2014 New tariff method will take effect from next gas year ( ): DERA public consultation (autumn 2014) Multipliers and seasonal factors Takes effect from the start of the following gas year 39

40 Temporary method approval (October 2014) Approved by the NRA on 23 September 2013 for a two-year period: Gas years 2013/2014 and 2014/2015. Method extension is required. 1. Differentiated tariffs: Limited basis for evaluation availability of data is insufficient Appears to be accepted among Shippers Provides a transparent instrument for allocating costs Adverse impact on the market and price formation not identified 2. Change of the capacity and commodity ratio: New capacity/commodity ratio generally well received Application for method extension beyond the two test years in order to: Improve data substantiation Achieve convergence with principles in a final Tariffs NC 40

41 Variable commodity tariff to allow corrections owing to budget deviations Tariff budget deviations materialise in the annual report as over- or underrecovery. Often, deviations are allowed to increase due to inflexible tariff system Need for an instrument to minimise deviations within the financial year in order to reduce over-recovery and ensure speedy return to system users Capacity is booked/paid ex ante, but commodity is billed ex-post and is suitable for within-year adjustments End of Financial year: Over-recovery Financial year 2013 Financial year 2014 Gas year Gas year Gas year tariffs come into force tariffs come into force Calculation of tariffs Calculation of tariffs Calculation of tariffs 41

42 Evaluation of the method proposal The proposed method could reduce price transparency and result in increased risk uncertainty among system users Price stability is favoured over reduced risk of over-recovery Budget deviations are not expected to constitute a risk of significant new over-recovery Consequently, the method proposal will not be included in a revised tariff methodology. This has no direct impact on the return of accumulated overrecovery as agreed with the Danish Energy Regulatory Authority 42

43 Inclusion of accumulated (historical) over-recovery in transmission tariffs 2013/2014 and 2014/2015 In 2013/2014 and 2014/2015, 121m DKK and 208m DKK respectively were incorporated into the transmission tariffs. Significant price impact and rising There are no firm principles defined in tariff methodology on how overrecovery should be allocated to tariffs. However: Annual return of accumulated over-recovery defined by the DERA in fixed portions Energinet.dk has announced to the market that the aim is to have a deviation from the average capacity tariff of less than 20 % Over-recovery principle should be methodologically defined, transparent and not conflict with overall tariff principles 43

44 Dato - Dok.nr. 44

45 45

46 Multipliers and seasonal factors price revision Multipliers: Ratio between annual and short-term products Seasonal factors: Ratio between winter/summer prices 46

47 European Tariffs NC (implementation in 2015) Source: Dennis Hesseling, ACER, May

48 Tariffs NC implementation important decisions Requires analysis before implementation/choice Danish market model Art. 4 (Composition of transmission services revenue) Art. 10 (Primary cost allocation method.: postage stamp methodology) Art. 15 (asset allocation methodology) Art. 17 (Secondary adjust.: equalization) Art. 19 (Criteria for choosing a cost allocation method.) Art. 20 (Selection and approval of cost allocation method.) Art. 23 (Storage) Other ENTSOG members Art. 6 (Parameters of a primary cost allocation methodology) Art. 10 (Primary cost allocation method.: postage stamp) Art. 11 (Capacity weighted distance) Art. 12 (Variant A of virtual point based) Art. 13 (variant B of virtual point based) Art. 14 (matrix) Art. 15 (asset allocation) Art. 17 (Secondary adjustment: equalization) Art. 19 (Criteria for cost allocation method) Art (Reserve prices) Art (Revenue reconciliation) Art. 39 (Pricing bundled capacity) Art (Incremental and new capacity) 48

49 Tariffs NC implementation also requires decisions Can be implemented within existing market model Danish market model Art. 1-3 (General provisions) Art. 5 (Cost allocation approach and cost allocation methodology) Art. 6 (Parameters of a primary cost allocation methodology) Art. 8 (Criteria for choosing cost allocation method.) Art. 9 (Entry-exit split) Art (Cost allocation methods) Art. 16 (Secondary adjust.: rescaling) Art. 21 (Review of cost allocation) Art. 22 (Cost allocation test) Art (publication requirements) Art (Reserve prices) Art (Revenue reconciliation) Art. 39 (Pricing bundled capacity) Art. 40 (Pricing at a virtual IP) Art. 41 (Payable price at IP) Art (Incremental/new cap.) Art (Final and transitional provisions) Other ENTSOG members Art. 1-3 (General provisions) Art. 5 (Cost allocation approach and cost allocation method) Art. 8 (Criteria for choosing cost allocation method) Art. 9 (Entry-exit split) Art. 16 (Secondary adjustment: rescaling) Art. 20 (Selection of cost allocation method) Art. 21 (Review of cost allocation method) Art. 22 (Cost allocation test) Art. 23 (Storage) Art (publication requirements) Art. 40 (Pricing at a virtual IP) Art. 41 (Payable price at IP) Art (Final and transitional provisions) 49

50 Backhaul tariffs The principle is included in Tariffs FG/NC Backhaul rebates could be a means to reduce tariff barriers for increased utilisation of existing capacity User Group invited to formulate principles for backhaul tariffs Based on the cooperation model applied to Balancing Shipper Task Force Dato - Dok.nr. 50

51 Contact info Nina Synnest Tel.: / [email protected] Frederik Kjerulf Tel.: / [email protected] Dato - Dok.nr. 51

52 Q: You summarised the discussion of the recent Tariff User Group saying that shippers agree to differentiated tariffs because they better reflect the cost structures of operating the system. I understood from the User Group that what the Shippers agreed about was rather that differentiated tariffs could lead to more effective system utilisation and market functioning. A: Yes, that is a more nuanced way of presenting the User Group s viewpoints: flexible and differentiated tariffs could lead to a more effective use of the transmission system in the cases where the value of spare capacity is below the tariff. This could be achieved through backhaul tariffs. Design of backhaul tariffs has been delegated to a dedicated Shipper Task Force assisted by the TSO. Backhaul tariffs are part of the tariff-method revision in year Dato - Dok.nr. 52

53 Coffee break 53

54 Security of supply in the light of the Ukraine conflict 54

55 Topics NPG gas-price development Storage filling Supply in an emergency situation Revision of the Danish Emergency Plan 55

56 GPN EUR/MWh 10 0 jan feb mar apr maj jun jul aug sep okt nov dec Source: Gaspoint Nordic Dato - Dok.nr. 56

57 Storage filling Germany 72% Denmark 72% Dato - Dok.nr. 57

58 Storage filling 73% 60% 58

59 Storage-filling scenario 2014 Supply from Nybro as Jan. May Net export Germany 905 million m 3 (11 TWh) Supply from Nybro as Jan. May No storage filling Net export Germany 1,209 Million m 3 (14.6 TWh) 59

60 Speedy revision of the national emergency plan Non-protected customers will benefit from excess gas in an emergency situation In a situation of general gas shortage in the EU, the Danish authorities will be responsible for making decisions in terms of supplying non-protected customers in Denmark Reviewed emergency plan expected to be submitted to the EU during the summer. 60

61 Q: [question in relation to a figure showing that all consumers are supplied] Do you mean that everything else will be normal (including supply to non-protected customers)? A: Yes, everything else will be normal. Q: Is the basis for the emergency situation still N-1? A: Yes, the basis for the emergency situation described in the Emergency Plan is still N-1. The revised plan describes moreover an EU emergency situation. In such a situation, the EU will call an emergency situation and urge the member states to share any excess gas. In that case, Denmark may decide to share the gas including any supplies from the North Sea. Dato - Dok.nr. 61

62 Status on the Ellund interconnection point Jeppe Danø Shippers Forum 11 June

63 Status on Ellund Challenge: No available FIRM capacity Ellund Exit (DE): Future new capacity has already been allocated to Open Season contracts Main questions: Does the market request additional FIRM capacity - Ellund Exit (DE) Can new market products/instruments create new firm capacity (without new hardware investments such as pipelines and compressors) See next slide 63

64 Potential new product Counter-flow nomination right exists at GUD today Here presented with a twist to release FIRM day-ahead capacity in Germany Exit Tariff Entry Tariff Today Entry Tariff 4 1 Exit Tariff Energinet.dk Ellund Border GUD New potential product Nomination close: 14: Reduced Exit 3 2 Entry Tariff Tariff Entry Tariff Exit Tariff 5 30 Still a volume tariff New FIRM day-ahead capacity offered on PRISMA at 16:30 64

65 Next steps Energinet.dk requests your views on this idea Public consultation after the summer holiday Clarification with GUD and OGE The Danish Energy Regulatory Authority 65

66 Comment: It is a good opportunity to free up capacity on the German side and make the market more flexible. Dato - Dok.nr. 66

67 Energinet.dk Gas Storage Shippers Forum 11 June 2014 Hans-Åge Nielsen 67

68 Status on Energinet.dk Gas Storage s sale In 2013, we shifted our focus from a Danish market to a pricing structure like that of the German storage facilities from volume to flexibility as price driver right focus wrong indicator In 2014, all price formulas relate to European forward pricing We do not see an excess supply of capacity All capacity sold is utilised, and All capacity will be sold if the price is right All capacities for 2014 have been sold 8 sales of 8 different products at 8 different times at 8 different prices All pricing of products is based on an assessment of their potential value creation Aggregated sales prices are published on our website Dato - Dok.nr. 68

69 Q: Do you still expect to hold auctions? A: We have had an auction. If we are uncertain as to what the price ought to be, we hold an auction to arrive at the right price. Today, it seems that customers prefer to have special products and a special price. Energinet.dk Storage has skipped standard products and now only offers tailor-made products at a good price. Dato - Dok.nr. 69

70 Have a nice summer See you on 11 September