ENTSOG Tariff NC - Implementation Document 2nd Edition

Annex C Article 5 – Example of Cost Allocation Assessments

This Annex describes the case of a TSO applying the CAA on capacity-based and commodity-based transmission tariffs. In the following sections, calculations are explained step by step based on a fiction- al TSO network. Tables with exemplary figures are added to provide for easier under- standing.

Table A: Distances between Entries and Exits   1)

TABLE A: DISTANCES BETWEEN ENTRIES AND EXITS

Distance (km)

Exit

IP 1

IP 2

IP Exit 5

IP 3

Consumption

LNG

650

820

840

420

460

IP 1

0

350

520

360

200

IP Entry 4

150

480

660

430

270

Entry

IP 2

350

0

230

430

270

IP 3

360

430

440

0

170

Table 25: Distances between Entries and  Exits

The first Table shows the distance from each exit point to each entry point of the sys- tem. While ‘IP Exit 5’ and the local consumption are just noted as exits, ‘IP Entry 4’ and the point ‘LNG’ are specified as entries only. All three other IPs function as an entry and exit point. The consumption in this model is representative for many exits and can be assimilated to a cluster. By building the weighted centre of those single consumption exits, all are summarized to this one location. The distances are then determined according to the approach chosen for CAA by the TSO or NRA (no man- datory approach in the TAR NC)  2) . Two parts are considered. \\ Part I presents the CAA for the capacity-based transmission tariffs (all TSOs use such tariffs, therefore this CAA is mandatory for all TSOs). \\ Part II presents the CAA for the commodity-based transmission tariffs (optional, only for TSOs which apply such tariffs).

 1) Consumption refers to ‘intra-system network use’. It is forecasted contracted capacity, as per Article 5 provisions.  2) For distance calculations between entry and exit points, one assumes here that the concept of ‘flow scenario’ referred to in Article 8 on the CWD counterfactual is also applied to the CAA. E. g. it is impossible to flow gas from IP 1 seen as an entry point to IP 1 seen as an exit point. Therefore, for the calculation of the average distance for exit point IP 1, it is necessary to remove the capacity value of entry point IP 1 from the denominator. If this adjustment is not made, average distances will be underestimated at entry (resp. exit) points where flow scenarios do not exist with at least some exit (resp. entry) points. However, for the CAA it is also possible to assume that the concept of flow scenario does not apply, since Article 5 on CAA does not make it a requirement.

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TAR NC Implementation Document – Second Edition September 2017