Abstract

The CAM NC has given shippers more flexibility to book capacity at IPs and made the process more efficient. This has contributed to reduced contractual congestion and narrowed spreads through efficient price arbitrage. However, the standard auction timetable still limits opportunities for arbitrage to be fully exploited, particularly across the forward curve. This is detrimental to market efficiency and reduces the amount of capacity TSOs sell. ACER’s latest gas market monitoring report (paragraph 36) suggested that consideration should be given to increasing the frequency of CAM auctions with a standardised timing to make them even more useful for network users.

Category: European

Reported issue

The proposal aims to make firm IP capacity more readily available to shippers by enabling TSOs to offer it for sale in uniform price allocation (UPA) auctions outside the CAM NC auction timetable dates.
Supplementary UPA auctions for yearly, quarterly and monthly IP capacity would be held for any capacity remaining unsold after the first relevant CAM NC (ascending clock) auction, up to the point where it becomes usable. Shippers would always have the option to bid for yearly, quarterly and monthly IP capacity in the relevant CAM NC auctions first before any supplementary UPA auctions took place.

TSOs and booking platforms could choose to implement supplementary UPA auctions or not, possibly on an initial trial basis. However, as UPA auctions will increase the opportunity for TSOs to sell capacity and may incentivise more annual capacity booking, hopefully most of them would choose to do so.

UPA auctions would not take place if firm yearly, quarterly or monthly capacity at an IP was sold at an auction premium, was sold out, or was not offered. In such instances TSOs could offer interruptible yearly, quarterly or monthly IP capacity on the dates specified by ENTSOG in the auction calendar.

UPA auctions would be held for unsold firm yearly, quarterly and monthly capacity at IPs on each business day commencing on the 3rd business days after the start of the relevant CAM NC auction.
However, UPA auctions would not take place on days where CAM NC auctions for firm or interruptible yearly, quarterly or monthly capacity are scheduled to take place. In the event demand for capacity at an IP(s) extends the CAM NC auction beyond the scheduled day through the ascending clock mechanism, UPA auctions will be suspended at that IP(s) until the 3rd business days after completion of the auction.

Also, at the point in time when the amount of firm capacity to be offered in monthly and quarterly CAM NC auctions is published one and two weeks, respectively, before the auction dates, any yearly or quarterly UPA auctions pertaining to such month or quarter shall be suspended.

Prior to the start of each business day TSOs will notify the booking platform of the quantities of yearly, quarterly and monthly capacity they are able to offer for sale through UPA auctions. The booking platform will then compare the capacity offered at each IP and publish the amounts of bundled and unbundled capacity to be offered via UPA auctions, as per the timings below.

Yearly, quarterly and monthly capacity per IP would be offered sequentially in separate UPA auctions held during the business day. These auctions would conclude one hour before the start of the CAM NC day ahead auctions at 16:30.
Included as a “suggested solution supporting document” is full description of the proposal, including possible auction timescales and legal text changes (Flexible IP Capacity_28012020_02.pdf). Also included is an overview, for calendar year 2020, of all the CAM NC and supplementary UPA auction dates and products resulting from the proposal, along with separate annual, quarterly and monthly UPA schedules (Flexible IP Capacity_28012020_03.pdf).

Concerned entities

Notified parties

Suggested actions