Bonn Workshops 8 and 9 Feb Balancing workstream

2 GRI – NW Bonn Workshops, 8 and 9 Feb General remarks & conclusions The was general discussion about the problems experienced within gas balancing mechanisms Importance of transparency within & between gas balancing regimes was highlighted Some issues of interaction between regimes were identified but it was pointed out that more work is needed to better understand what the problems are

3 GRI – NW Bonn Workshops, 8 and 9 Feb Way forward / actions Development of information templates for gas balancing in consultation with stakeholders to improve transparency and therefore ability to manage risk within/across balancing mechanisms (3 “pilots” – with wider roll out if successful) Development of 2 case studies on gas balancing interactions – to explore in more detail the interactions between balancing mechanisms (one could be Dutch/German to link with day ahead auction work) Workstream on “blue-sky thinking” on balancing to look at issues not captured elsewhere to try and improve gas balancing mechanisms – some possible e.g’s: Use OBAs Use of TSO storage Impact of unmetered sites

4 GRI – NW Bonn Workshops, 8 and 9 Feb Who & when 1 week for all to respond to way forward & volunteer for Enabler Group Initial outline information templates for 3 pilots: Who: Market operators. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise. Initial report on case studies: Who: Enabler Group. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise with recommendations. Initial terms of reference on „blue-sky thinking“: Who: Enabler Group. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise.

Bonn Workshops 8 and 9 Feb Transparency workstream

6 GRI – NW Bonn Workshops, 8 and 9 Feb General remarks & conclusions The workstream discussed the issues raised in the facilitation paper and data appendix There was a recognition that transparency needs to be improved across all areas There was a recognition that the less than 3 rule needs to be looked at (application, data aggregation and role of regulators) There was a recognition that there are areas of best practice that we could learn from and potentially apply on a wider basis There was recognition that there is potentially inconsistency in capacity data but that ERGEG should take this forward as part of their existing Task Force Need to focus on regional issues and ensure coordination/consistency with EU level initiatives

7 GRI – NW Bonn Workshops, 8 and 9 Feb Way forward / actions Development of Action Plans to help meet the issues raised by respondents to the questionnaires to improve the level of transparency What/scope/frequency of information Timeline for making changes etc Assessment of any reasonable costs Potential quick wins Consultation with stakeholders Identify implementation and monitoring process Rule of 3: Possibility publishing aggregated data Development of code of practice/guidelines for better application of rule of 3 Best practice An inventory of best practice that could be “rolled out” on a wider basis

8 GRI – NW Bonn Workshops, 8 and 9 Feb Who & when 1 week for all to respond to way forward & volunteer for Enabler Group Action Plan: Who: Market operators. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise. Less than 3: Who: Enabler Group. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise. Best practice: Who: Enabler Group. By: (20 April – 1 week before next SG workshop). Consultation. Then finalise.

Bonn Workshops 8 and 9 Feb Regulatory co-ordination

10 GRI – NW Bonn Workshops, 8 and 9 Feb Conclusions (1) A code of practice for regulators in the NW region should be developed The code should include General principles (timely, transparent, etc) Checklist/issue list of market arrangements on which co- ordination should take place Goal of the co-ordination is the allignment of processes (e.g. timing of open seasons)

11 GRI – NW Bonn Workshops, 8 and 9 Feb General remarks Cross-border user forum of all participants should be consulted on cross-border issues Align regulatory co-ordination with national processes and responsibilities, where necessary include governments, users, operators Process of developing regulatory co-ordination should be broadened to include governments as they often have regulatory powers - RGI is the right forum to do this

12 GRI – NW Bonn Workshops, 8 and 9 Feb Way forward Conclusion paper in March, Highlight where issues are being dealt with Highlight practical difficulties (regulatory powers, role of government) Code of Practice draft in March (including how co- ordination between regulators can take place in practice) Documents for discussion at April workshop

Bonn Workshops 8 and 9 Feb Hub Liquidity

14 GRI – NW Bonn Workshops, 8 and 9 Feb Hub liquidity and efficient transmission and trade of gas between hubs Remarks: capacity release, main focus on framework (access, rules), large zones with volume based tariffs with no need for capacity booking inside the zone With possible merger of e.g. Danish and German hubs by further harmonisation of rules (balancing and access to capacity) only benefical with large markets if enough capacity and few balacing zones, Gas quality at specific hubs (Zeebrügge) standardize balancing (daily vs. hourly) and products, reasonable imbalances cost if not market based, grid company and TSO should work together to make trading of imbalances possible all liquidity need to be centered at the hubs

15 GRI – NW Bonn Workshops, 8 and 9 Feb Conclusions The barriers mentioned in answers of questionnaires are found to be the central barriers Balancing and gas quality also seems to be main barriers All hubs are inflicted with problems Timing: Deadline for comments 28 February. Conclusion paper in March

Bonn Workshops 8 and 9 Feb Interconnections and primary capacity market

17 GRI – NW Bonn Workshops, 8 and 9 Feb Conclusions Way forward should focus on the details at specific interconnection points Assessment of the situation at specific IP requires an improved data basis (Solution: publishing of (aggregated) data, provide data to NRAs) Investment important issue where contractual (?) and physical congestions occur; efficient CMP for contractually congested IP. Better coordination of capacity products and booking procedures Inter-TSO and inter-NRA coordination Interconnection points: all the IP proposed in the slides plus Ellund, Zelzate; shippers are encouraged to give their priorities No objections on the time schedule proposed

18 GRI – NW Bonn Workshops, 8 and 9 Feb Way forward / actions responsibilitydeadlinedeliverable Comments by stakeholders on selection of IPs to be worked on primarily CRE / BNetzAFebruary 23List of IPs Comments by stakeholder on priorities for each of the selected points CRE / BNetzAFebruary 23List of IPs and related priorities Comments from stakeholders on the reportCREFebruary 28Report Submit missing data to CRE / BNetzA (esp. utillisation rates) TSOs / NRAsFebruary 28Data Draft implementation plan containing issues to be solved at each selected IP CRE / BNetzAMarch 1Implementation plan Final reportMarch 9 (Workshops on the implementation plan)CRE(April 16 / 17) (Approval on implementation plan(RCC)(May 2) Implementation phase Meetings by adjacents TSOs (NRAs and further stakeholders if necessary) TSOs

Bonn Workshops 8 and 9 Feb Interconnections and secondary capacity market

20 GRI – NW Bonn Workshops, 8 and 9 Feb Direction of flow 0% <10% Overall Indication for the IPs considered Availability Contractual congestion is shown at primary capacity workshop Availability of firm capacity in 2005:

21 GRI – NW Bonn Workshops, 8 and 9 Feb Conclusions Contractual congestion is shown, now how we can re- allocate (if available) underutilised capacity? Secondary market is not a means to its end but it helps Design variables: pro, con identified Hot issues shown: e.g. Facilitation party, need for long term commitment, need for long and short term products Tomorrow we go on that at Day Ahead Auction WS Other congestion management ideas need to be assessed as solution in parallel: Positive incentives E.g. Clarity on investments in future (no point for hoarding), more transparency Negative E.g. Study on improving FIRM UIOLI and ideas like releasable capacity Follow-up needs to allow for more comments

22 GRI – NW Bonn Workshops, 8 and 9 Feb Way forward / actions responsibilitydeadlinedeliverable Additional comments by stakeholders on conclusions and report EGFebruary 28Input for Implementation Plan Draft implementation plan containing issues to be solved EGMarch 1Implementation plan (RCC discussion)RCCMarch 7 (Workshops on the implementation plan)EG(April 23 / 24) (Approval on implementation plan)(RCC)(May 2) Implementation phase Meetings by (adjacents) TSOs (NRAs and further stakeholders if necessary) Operators, other?

Bonn Workshops 8 and 9 Feb Day ahead capacity auctions

24 GRI – NW Bonn Workshops, 8 and 9 Feb General remarks EFET and operator proposals were discussed Compliance with existing legal, regulatory and contractual requirements Highly actual information on contractual data, nominated data and flow data and other information to be further defined are necessary to assess e.g. level of interruption risk Wish to have firm (priority !) and interruptible capacity auctioned; process needs to be clear; recycling of capacities is needed Offer of APX to organise auction on product to be defined by the market (“design variables”) Pilot project Review of pilot required; may lead to re-design DTe offers monthly meeting in Den Haag to discuss GRTgaz offers to work on additional cross border points If not TSO platform, tender should be conducted Commitment on start date and duration of pilot

25 GRI – NW Bonn Workshops, 8 and 9 Feb Conclusions Appreciation of the urgent need to act Various views on type of product but majority supports combination of secondary and interruptible primary Clear message by Operators that trading could start at latest on 1 April 2008 Clear message that market wants to start as soon as possible Commitment to contribute to work plan by EFET and Operators and Key stakeholders

26 GRI – NW Bonn Workshops, 8 and 9 Feb Way forward / actions Meetings/telephone conferences Monthly Jour Fixe: Operators at IPs EFET Platform operators DTe and possibly BNetzA and DERA Updates on process by DTe to Stakeholders and opportunity to comment Presentation of renewed proposal on workshops in April