ENTSOG Tariff NC - Implementation Document 2nd Edition

Annex I Article 13 – Impact of Multipliers

on the Reference Price for Non-Price Cap Regimes

The example shows the impact of a multiplier on the revenue recovery for one year. The example is based on the following inputs: \\ Allowed revenue = 3,000€; \\ Forecasted contracted capacity = 250MWh/day; \\ Yearly reserve price = ; Four scenarios with different Multipliers (M) and seasonal factors: The level of contracted capacity over the year (which is contracted with yearly, quarterly, monthly and daily bookings  1) can be found in Figure 69.

250 MWh/day

Contracted Capacity and System Usage

200

150

100

50

0

Oct

Nov

Dec

Jan

Feb

Mar

April

May

June

July

Aug

Sep

average system usage per month

Booking – Daily Booking – Annual

Booking – Monthly

Booking – Quarterly

Figure 69: Contracted capacity and system usage in example of impact of low multipliers on yearly tariff

Usually, such a non-yearly booking is hard to forecast, because it depends on weather and market conditions. One way to limit the risk of under- or over-recovery is to introduce multipliers for non-yearly bookings, which are an incentive for shippers to book long-term. At the same time, multipliers and seasonal factors can limit a tariff increase, which is needed to meet the revenue cap. In the example, the non-yearly bookings were perfectly forecasted. This is to show only the effect of multipliers on the tariff, which is a simple postage stamp in the example.

 1) The figures of daily contracted capacity in the table represent the average of daily bookings over each respective month.

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TAR NC Implementation Document – Second Edition September 2017