2. Strategic rationale
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

3. Discussed Models 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

4. Incentivisation
TSOs: Incentive mechanism that compensates the additional financial risks coming along with providing additional capacity is needed
If not fulfilled, how does it impact the project?
The alternative of an ex-ante cost recovery guarantee requires a high level of detailing (no quick-win)
An agreed methodology will probably prove to be sub-optimal for each IP
No incentive for the TSO to do more than absolutely required/covered
TSOs see incentive mechanism as prerequisite for further steps

5. Status Quo – according to TSOs
France: Regulatory system incorporates an incentive to oversell capacity as long as regulator does not increase its sales forecast each year
Belgium: Regulatory system not specific to additional revenues generated from extra sales of capacity. No ex-ante guarantee that TSO would be allowed to retain extra revenues
Germany: Additional costs for establishing short-term capacity market are not covered in revenue cap and will in practice lead to lower earnings of the TSO
Netherlands: revenues resulting from capacity sold above this estimated quantity can be kept by the TSO

6. Status Quo – The Wider Picture
European Process coincides with GRI NW STC process
Framework Guidelines Capacity Allocation contain proposals to strengthen short term markets
Aims at harmonised standards on certain capacity related issues
Potentially impacts STC pilot
Finalised Document to be expected in May 2010
ENTSOG to draft network codes
Incentivisation is closely linked to national regulators practices
National processes e.g. in Germany

7. Proposed Way Forward April to August 2010 September 2010 October 2010
Workshop on incentives for TSOs to maximise available short-term capacity
September 2010
Re-evaluate and if needed adapt project in light of recent developments on European and national levels
October 2010
Core Group to propose detailed project
Update Programme Board
November 2010
Stakeholder Workshop
Draft implementation plan to be prepared by Core Group

8. Thank You!