ENTSOG Tariff NC - Implementation Document 2nd Edition

Chapter III ‘Reserve prices’

Scope: IPs Application date: 31 May 2019

Reserve prices serve as a floor in the relevant capacity auction. The previous Chapter sets out how to calculate a reference price; this Chapter addresses the next steps for defining the reserve prices: the capacity-based transmission tariffs used in the auctions. The reserve price for firm yearly capacity is equal to the reference price. The reserve prices for firm non-yearly capacity products involve the application of formulas with multipliers based on the reference price and, optionally, seasonal factors . Reserve price = time proportion of reference price x multiplier x seasonal factor The TAR NC defines the ranges for the respective multipliers, and a detailed methodology for calculating seasonal factors. \\ The range for quarterly and monthly multipliers is between 1 and 1.5. \\ The range for daily and within-day multipliers is between 1 and 3. The range for daily and within-day multipliers may be extended in ‘ duly justified cases ’ to less than 1, but higher than 0, or higher than 3. The same ranges apply to the arithmetic mean over the gas year of the product of each separate multiplier and its seasonal factor. Depending on ACER’s recommendation by 1 April 2021, the range for these multipliers may narrow to between 1 and 1.5 by 1 April 2023. The reserve prices for interruptible capacity products involve discounts to the reserve prices for the corresponding firm capacity products. There are two alterna- tives for such discounts: \\ An ex-ante discount calculated upfront, based on the formula set out in the TAR NC, using the probability of interruption and the estimated economic value of the product; \\ An ex-post discount , which constitutes compensation paid to network users af- ter the actual interruption has occurred; such a discount is an option only if physical congestion did not prompt any interruptions in the preceding gas year. The multipliers, seasonal factors and discounts are subject to NRA consultation with adjacent NRAs and relevant stakeholders every tariff period .

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TAR NC Implementation Document – Second Edition September 2017