Improvement of transparency of regional Virtual Trading Points in SSE Pilot project X: Improvement of transparency of regional Virtual Trading Points in SSE Regulatory perspectives GRI SSE –Budapest, 8 July 2016 TITRE

GRI SSE – pilot project X Questionnaire for the assessment and the improvement of transparency of regional Virtual Trading Points in SSE countries ……….. The aim of the project is to improve the transparency of the VTPs in SSE region which in connection with the implementation of the GTM II best practices in gas market design will contribute to raise the liquidity and improve the functioning of gas markets in the region.

Countries involved and replies received GRI SSE – pilot project XII Countries involved and replies received

Access / set-up of Virtual Trading Point (VTP) Trading venues GRI SSE – pilot project X 42 questions Access / set-up of Virtual Trading Point (VTP) Trading venues Price reporting / price indices Liquidity situation Technical operative framework for VTP services Cooperation with EFET, CEGH, ACER

No En/Ex are at the final stage of establishment GRI SSE – pilot project X Access / set-up of Virtual Trading Point (VTP) 1) Is there in your country an entry- /exit system established? (y /n ) No En/Ex are at the final stage of establishment

Access / set-up of Virtual Trading Point (VTP) GRI SSE – pilot project X Access / set-up of Virtual Trading Point (VTP) 2) Is there a VTP established? (y /n ) the entry-exit system includes a Virtual Nomination Point (VNP) which is accessible only by holders of capacity contracts (shippers).

Access / set-up of Virtual Trading Point (VTP) GRI SSE – pilot project X Access / set-up of Virtual Trading Point (VTP) 3)/4/5) Is there the VTP owned by an independent VTP operator?* (y /n ) *Certified TSO, no incumbent/vertical integrated company n/a

Access / set-up of Virtual Trading Point (VTP) GRI SSE – pilot project X Access / set-up of Virtual Trading Point (VTP) 7) Do you have different access conditions for virtual and physical traders? (y /n ) n/a

Access / set-up of Virtual Trading Point (VTP) GRI SSE – pilot project X Access / set-up of Virtual Trading Point (VTP) 9) Is a license for (wholesale) trade a condition to trade at VTP? (y /n ) n/a

Access / set-up of Virtual Trading Point (VTP) GRI SSE – pilot project X Access / set-up of Virtual Trading Point (VTP) 17) Is the VTP the only point, on which the title of gas can be transferred (i.e. ownership transfer)*? (y /n ) * Not considering title transfer in storage facilities

19) Which trading venues are established in the market area? GRI SSE – pilot project X Trading venues 19) Which trading venues are established in the market area? Brokers? (y /n ) Exchange(s) ? (y /n ) 1 n.a 1 7 2 n.a

GRI SSE – pilot project X Trading venues 20) Are market makers active / available in the respective market area*? (y /n ) * In the gas exchage Not in scope of eustream activities n/a

GRI SSE – pilot project X Trading venues 24) Is the market area (TSO(s) + DSO(s)) provided by one balancing system or more ? The two balancing zones do not include DSOs networks. 2 2 1 >2

Price reporting / price indices GRI SSE – pilot project X Price reporting / price indices 25) Are price reporting agencies (e.g. ICIS, Platts, Argus) covering the respective market area? (y /n ) 2 n/a 2 4 1 >3

Price reporting / price indices GRI SSE – pilot project X Price reporting / price indices 27) Is there a near real time system average price/system marginal price reporting by the TSO/Hub Operator/gas- exchange?(y /n ) NO All data are made accessible after trading session.. n/a

GRI SSE – pilot project X Liquidity situation 29) Does the VTP operator have any mechanism to keep the VTP liquid? (e.g. liquidity provider, balancing platform etc.) ? (y /n ) n/a n/a

Technical operative framework for VTP services GRI SSE – pilot project X Technical operative framework for VTP services 32) Is the VTP operated on a 24/7 basis? (y /n ) n/a

Technical operative framework for VTP services GRI SSE – pilot project X Technical operative framework for VTP services 34) Is an intra-day nomination and re-nomination possible? (y /n ) Basically yes, but the nominations of exchange transactions are not possible to be re-nominated. Currently closure time to record Daily Transaction with reference to the same Gas-day is at 04.30 p.m.

Technical operative framework for VTP services GRI SSE – pilot project X Technical operative framework for VTP services 36) Does the Balancing NC require changes to the rules and design of the VTP/HUB? (y /n )

Technical operative framework for VTP services GRI SSE – pilot project X Technical operative framework for VTP services 38) Are all relevant legal documents available in English also? (y /n ) n/a

Technical operative framework for VTP services GRI SSE – pilot project X Technical operative framework for VTP services 39) Is there a minimum lead time before changes to market rules apply? (y /n ) 14 Depending on specific issues. 30 30

Technical operative framework for VTP services GRI SSE – pilot project X Technical operative framework for VTP services 40) Are there regular shipper meetings? (y /n ) n/a

3rd Energy Package still to be implemented fully GRI SSE – pilot project X Lesson learnt Still a long way to go to achieve well developed and liquid VTP/HUBs in all the SSE countries 3rd Energy Package still to be implemented fully Potential local resistences of different nature could delay the development process and have to be overcome Benchmarking of best practices should be envisaged Decreasing of entry barriers 23

Strong inputs from market players GRI SSE – pilot project X Lesson learnt Tighter cooperation among NRAs, VTP Operators and market players should be envisaged Strong inputs from market players Necessity to speed up of the implementation of BAL NC in the single MS GRI SSE important platform to bring together different stackeholders and to discuss specific regulatory and market oriented issues Monitoring by NRAs/ACER of the critical issues identified in this survey To apply the provisions of the GTMII Abolishing trading licenses 24

GRI SSE – pilot project X GRI SSE – Budapest, 08 July 2016

Definitions Gas market The sum of gas (wholesale) trading activities (spot to forward (inclusive)) with delivery agreed on a (single) specific delivery hub. Hub The virtual trading point of an entry/exit system where the TSO (or a separate independent entity dedicated at national level) handles all nominations for the transfer of title to gas between network users (or balancing accounts) Transparent market The sum of gas trading activities (spot, prompt and forward) with delivery agreed on a (one) specific delivery point and concluded using a transparent trading venue (i.e. exchange, broker platform). Note: the main delivery points are the virtual trading points of entry/exit systems. Distinct delivery points are considered as separate markets. Virtual trading point A notional point in an entry/exit system at which natural gas can be traded within the entry/exit system after injection and before offtake.