1. Gas Regional Initiative – North West Region Stakeholders Group meeting - London 14 November, 2008 Capacity Workshop Coordinated Open Seasons Marie-Claire AOUN – CRE marie-claire.aoun@cre.fr

2. 2 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Agenda 1.Overview of the project  Guidelines for Good Practice on Open Season Procedures (GGPOS)  Aims of the project 2.Experiences on coordinated open seasons 3.Need to improve the coordination of the open seasons 4.Questions

3. 3 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Guidelines for Good Practice on Open Seasons (GGPOS)  Role of the Open seasons procedures Assess the market demand for capacity Allow a project sponsor to efficiently consult the market about how much infrastructure it needs and under what terms Allocate resulting capacity in a transparent and non-discriminatory way  Structure of an Open Season in 2 phases 1.Assessment of the market’s needs on the basis of an open season notice and through non binding capacity requests from interested parties 2.Capacity allocation and capacity contracts  Need for long term as well as short term contracts

4. 4 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 GGPOS: what they provide for coordination  Need for coordination with adjacent SOs Participants should be able to assess service on adjacent systems Products offered by the adjacent TSOs have to be compatible Products have to be offered in a coordinated way, using compatible and/or coordinated timetables and processes.  Coordination between NRAs Clarity of the regulatory frameworks and sufficient degree of similarity (in order to design compatible products) Ensure that differences between regulatory frameworks are not a barrier to investment NRAs have to jointly monitor the open season NRAs provide timely and coordinated input on allocation of costs and tariffs for the use of the infrastructure

5. 5 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Aims of the project  The main principles of the GGPOS provide “floor” requirements in order to ensure transparent and non-discriminatory open seasons  There is a need to provide more concrete guidance on the coordination of open seasons.  The project focuses on coordinated open seasons, but also addresses other difficulties encountered by past and present open seasons  The aim is also to define a rule to determine how much additional capacity should be developed for short term needs, on top of the long term capacity requested through the open seasons  Complete GGPOS on the basis of the experience gained through the ongoing coordinated open seasons  Define effective and operational coordinated open seasons mechanisms

6. 6 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 GRTgaz - Fluxys GRTgaz Growing number of ongoing open seasons: need for coordination GTS - Gasunie De GTS 2012 Energinet.dk EGT EGT/Gasunie/ DONG

7. 7 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Ongoing process launched in April 2007 Binding phase Nov. – Dec. 2008 First experience for cooperation and sharing of information between TSOs and NRAs Difficult to draw a final conclusion before the end of the process: Positive points and critical issues GTS 2012 Open Season GRTgaz Open season GRTgaz/Fluxys (+ GTS 2012)

8. 8 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008  Positive points: Definition of consistent timeframes and some coordination on contractual aspects Coordinated capacity allocation: shippers are not exposed to the risk of capacity mismatch Memorandum of Understanding between GRTgaz and Fluxys Open season 2012 of GTS: Possibility for shippers to adjust their bids by GTS thanks to the update of the timing of phase 2 of the open season  Critical issues: Delay of more than one year due to discussions regarding transit tariffs in Belgium Capacity requests in the 1st phase are “free”: lack of incentives for shippers to reveal their real needs (≠ E.ON GT open season) Short term capacity on top of the requested capacity only provided on the French side Open season GRTgaz/Fluxys (+ GTS 2012)

9. 9 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008  E.ON Gastransport (EGT) End of binding phase in June 2008 Little coordination with adjacent TSOs, partly due to the large network area and to the important number of IPs covered by the OS Need for coordination with GRTgaz  Integrated network development GTS/Gasunie Cross-border network development approach Initial phase of market screening (Nov. - Dec. 2008) Non-Binding (Phase 1) and binding agreements (Phase 2) in 2009 Growing number of ongoing open seasons: need for coordination

10. 10 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008  Energinet.dk Open season 2009 Model paper : Dialogue on Open season design (Nov. 2008) - 1 st phase (Feb. 2009) – 2 nd phase (Aug. 2009) Capacity bids for each point can vary by +/- 15% from the 1 st phase to the 2 nd phase Need for coordination with adjacent SOs (Gassco, Gas System, Swedegas, E.ON Gastransport, DONG Energy Pipelines, Gasunie Deutschland) Growing number of ongoing open seasons: need for coordination

11. 11 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 National specificities impact coordination  Different stakes in adjacent MS divergent priorities Belgium: transit service France: develop Hub to Hub capacity (Zeebrudge/TTF/PEG North) Germany: gas network expansion: need to coordinate with several adjacent SOs (Energinet.dk, GTS, Fluxys and GRTgaz)  Different allocation of risks between the market players in MS  Investment planning varies from one country to another

12. 12 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Need to improve the coordination of the O.S  Between regulators: rules on each side of the border Share of the capacity dedicated to short term bookings  Between TSOs: Contractual aspects: Contractual aspects: In case of delay in the realisation of the project on one side of the border Information exchange Information exchange between the adjacent TSOs: C onfidentiality claimed by certain TSOs hindering the information exchange with adjacent SO: No legal barriers for sharing data – Contractual provisions of confidentiality. Main difficulties encountered related to coordination

13. 13 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Conclusion  Growing number of OS  increasingly becoming the standard procedure for major investment projects in many MS  Coordination between TSOs and NRAs is possible as proved by the ongoing coordinated open seasons  Coordination can be hindered by several obstacles: External element that slows down the ongoing process Divergences between regulatory rules of adjacent MS Lack of information sharing between adjacent TSOs  The coordination of open seasons requires Compatibility of the different systems A certain degree of similarities in regulatory frameworks Complete cooperation between adjacent TSOs

14. 14 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Question 1: Coordination issues  What are the concrete difficulties you have encountered during open seasons processes related to coordination with an adjacent TSO Coordination of regulatory rules? Coordination between TSOs on contractual aspects, timing, technical issues? Other?

15. 15 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Question 2: Information exchange  Do you agree with the fact that adjacent TSOs should share with each other all the information related to the open season procedure for a successful coordination?

16. 16 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Question 3: Additional short term capacity  Do you think that additional capacity should systematically be developed for short term needs or security of supply reasons, on top of the long term capacity requested through the open seasons? If yes, how much (10%, 20%)?

17. 17 Capacity Workshop – Open Seasons coordination Stakeholders Group meeting - London, 14 November 2008 Thank you for your attention! * * *