1. PROPOSAL CAM PROPOSAL FOR HARMONISATION 14 th SG meeting Madrid 11 th July 2011

2. 2 PROPOSAL Index 1.Introduction 2.Proposal

3. 3 PROPOSAL Introduction 1

4. 4 PROPOSAL Introduction  In the 15 th IG meeting of the S-GRI that took place last 19 th October 2010, REN and Enagás were asked to start working in the harmonisation of the Capacity Allocation Mechanisms (CAM) between Portugal and Spain according to what is being discussed in Europe.  The mandate includes two parts: 1.Detailed description of current CAM in Portugal and Spain. 2.Proposals for harmonisation.  It should be borne in mind that the FG on CAM only applies to cross-border IPs.

5. 5 PROPOSAL Proposal 2

6. 6 PROPOSAL Main principles PRODUCT  Service duration of a calendar month or a combination of several months up to a maximum of 12 months.  Bundled firm capacity to be sold. This means that:  The corresponding entry and exit firm available capacity at both sides of an IP will be offered and allocated through a single procedure.  Different contracts will be subscribed with each TSO.  The same shipper entity will need to be registered in both countries. UNITS AND GAS DAY  Capacity will be offered and contracted in kWh/day.  The final goal is to standardise the gas day from 5:00 to 5:00 UTC. However, during an interim period other harmonised gas day, if approved by NRAs, could be implemented. BOOKING TOOL  The final goal is to develop a common tool in order to organize the allocation procedure. However, during an interim period TSOs might make available other means to ensure coordination.

7. 7 PROPOSAL Capacities to be offered PERIOD  The intention is to hold the initial auction in 2012 in order to allocate capacity from 1 st October 2012 to 30 th September 2013 (12 months). CAPACITIES TO BE OFFERED  The capacity figure for this product shall be defined according to the available capacity above existing ToP contracts and or Long Term capacity contracts (more than one year) on both sides of the IP.  The final decision will be made once the Operating Manual currently under revision by REN and Enagás is approved.

8. 8 PROPOSAL Allocation methodology Source: ENTSOG  Capacity will be allocated through volume-based cleared price auctions.  The reserved price shall incorporate the regulated tariff agreed by the NRAs  Capacity will be available for bidding on multiple months ahead within one bidding window.  Depending on the various capacity needs shippers will be able to place bids either for each month auctioned or only for some of them. However, each month will be allocated independently.

9. 9 PROPOSAL Bidding window  The bidding window will last 5 working days. During this period shippers will be allowed to submit bids and to withdraw or modify bids previously submitted.  At the end of each day, TSOs will publish the aggregated results of the bidding information. No provisional interim allocation will be performed at the end of each bidding day.  Capacity will be allocated only after the final bidding window closes.  No clock auction, no rounds (as proposed by ENTSOG in the draft NC).

10. 10 PROPOSAL Bid information  Each bid shall specify:  the identity of the network user applying;  the concerned Interconnection Point and direction of the flow;  the month for which the capacity is applied for;  per price-step, the amount of capacity for the respective month applied for; and  per price-step, the minimum amount of capacity for the respective month which the network user is willing to be allocated.

11. 11 PROPOSAL Volume-Based Cleared-Price Auction  TSOs shall provide a price range of 30 price steps, starting at the reserved price P 0.  Network users shall only be allowed to submit one bid per price step.  All bidders shall submit a bid at price step P 0.  Each bid quantity at P 1 and subsequent steps shall be equal to or less than the bid quantity at the previous price step.  TSOs shall aggregate the demand per price step  The clearing price is defined as price of the lowest successful bid. All successful bids shall be deemed payable by the network users at the clearing price.  If the total demand exceeds available capacity at the maximum price step, at that price step the demand shall be pro-rated proportionally to the individual bid quantity.

12. 12 PROPOSAL Volume-Based Cleared-Price Auction  All bids at the highest price (P x ) for which total demand is higher than or equal to the available capacity offered shall be allocated.  For the final allocation the following steps shall be taken into account: 1.If network users have bid at the subsequent price-step (P x+1 )  all capacity requested at P x+1 shall be allocated,  capacity requested at P x minus capacity already allocated at P x+1 shall be allocated by pro-rata proportionally to the individual bid quantity at P x 2.If network users have not bid at the subsequent price-step (P x+1 )  capacity requested at P x shall be allocated by pro-rate proportionally to the individual bid quantity at P x

13. PROPOSAL Thank you for your attention!