ENTSOG Tariff NC - Implementation Document 2nd Edition

ARTICLE 37 POWER TO GRANT DEROGATIONS

Responsibility: subject to NRA decision

General Article 37 recognises that interconnectors are a distinct type of a TSO (such as Interconnector UK, BBL, Interconnector 1 and Interconnector 2). The specific nature of interconnectors might warrant exemption from some of the Articles in the TAR NC. Article 37 allows interconnectors meeting certain criteria to apply for and be granted a derogation from one or more Articles of the TAR NC granted by the relevant NRAs. The Gas Directive distinguishes between transmission networks and interconnectors. Article 2(17) of that Directive defines an ‘interconnector’ as ‘a transmission line which crosses or spans a border between MSs for the sole purpose of connecting national transmission systems of those MSs’ . Such interconnectors’ characteristics include: \\ They are single pipelines with very few entry/exit points; \\ They have no captive demand, that is no directly connected end-user demand; \\ They are not directly connected to downstream distribution networks; \\ They may compete directly with other assets such as storage, LNG and other pipelines in providing flexibility to the connected transmission networks; \\ They may be merchant assets without an allowed or target revenue set in accordance with Article 41(6)(a) of the Gas Directive. Figure 44 shows the process for applying and assessing a derogation from the TAR NC. A derogation can cover all or some of the TAR NC provisions subject to NRA decision. The TAR NC does not foresee any explicit time limit for such a dero- gation. The process starts with a request from an entity operating an interconnector to the relevant NRAs. Such an interconnector must be the one that ‘has benefited from’ : (a) an exemption from Article 41(6), (8) and (10) of the Gas Directive in accordance with Article 26 of the Gas Directive; or (b) ‘a similar exemption’ . The applicant must demonstrate all/some TAR NC provisions would have one or several of the following negative consequences: (1) not facilitating efficient gas trade and competition; (2) not providing incentives for investing in new capacity or for maintenance of existing capacity; (3) unreasonable distortion of cross-border trade; (4) distortion of competition with other infrastructure operators offering similar to interconnector services; and (5) not being implementable when taking into account the specific nature of interconnectors. This list of consequences included in Article 37(2) of the TAR NC is exhaustive – however, meeting one of them suffices for a derogation request. The interconnector requesting a derogation must provide detailed reasoning, supporting documents and, where appropriate, a CBA. Such CBA must demonstrate one or more negative consequences listed in point (1) to (5) above. Process for granting a derogation from the TAR NC

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TAR NC Implementation Document – Second Edition September 2017