Gas Regional Initiative North West Region - Short Term Capacity RCC Meeting Den Haag – 21 September 2010

2 RCC Meeting Den Haag – 21 September 2010  According to Roadmap project shall focus on short-tem capacity issues: -maximising use of existing capacity including reserve capacity through examination of how unused capacity could be released day-ahead and -investigating into how TSOs could be incentivised  Aim: make available firm primary capacity on day-ahead market Strategic rationale

3 RCC Meeting Den Haag – 21 September 2010 Day-Ahead Oversubscription  TSO has good knowledge on how much capacity will be used  TSO slightly oversubscribes the system‘s capacity  In (rare) cases where flows exceed the system‘s capability TSO buys back the usage rights from shippers Short-Term Calculation  TSOs calculate available firm capacity based on long term assumptions and scenarios  In the period running up to real time TSOs have more certainty about network conditions, e.g.  Can release additional firm capacity to the market day-ahead Discussed Models

4 RCC Meeting Den Haag – 21 September 2010 Incentivisation  TSOs: Incentive mechanism that compensates the additional financial risks coming along with providing additional capacity is needed  TSOs sees incentive mechanism as prerequisite for further steps  The German case: Regulatory framework did not foresee the possibility of compensating additional financial risks through incentivisation  Other frameworks have in this regard more flexibility  Little progress was achieved, but:  How does Link4Hubs fit in this argumentation?

5 RCC Meeting Den Haag – 21 September 2010  Relevant ordinance “Access to gas transmission networks” has been amended  New ordinance came into force recently  Gives the german regulator possibility of incentivisation  From regulators point of view this issue is solved Amendment of german framework

6 RCC Meeting Den Haag – 21 September 2010  They welcome new ordinance  Lack of possibility of compensating additional risks has been successfully removed  Incentivisation issue is not perceived as an obstacle anymore, but other concerns were raised:  How is the technical available capacity approved by NRA?  Interference with national determination process  Interference with bilateral initiatives Reaction by German TSOs

7 RCC Meeting Den Haag – 21 September 2010  Regular working group meeting  Three proposed dates  ?  ?  ?  Aims of meeting  Agreement of a concrete IP  Timetable until SG Meeting  Determination and commitment by TSOs is key to achieve progress Proposed Way Forward

8 RCC Meeting Den Haag – 21 September 2010 Thank You!