ENTSOG Tariff NC - Implementation Document 2nd Edition

reference price

Note: M – multiplier for a non-yearly product SF – optional seasonal factor for a non-yearly product * ex-post discount: interruptible reserve price equals firm reserve price; compensation is calculated per Article 16(4) in case of interruption

all IPs + some non-IPs if CAM and TAR NC apply

rest of non-IPs

auction not per CAM NC or no auction

auction per CAM NC

reference price is used to derive reserve prices

reference price equals the price for firm capacity product with a duration of 1 year

price applicable at non-IPs

reserve price

yearly product

non-yearly products

firm

interruptible

firm

interruptible

= reference price x (1 - discount)

= proportion of reference price x M x SF x (1 - discount)

ex-ante

ex-ante

= proportion of reference price x M x SF

different prices for different products

ex-post*

ex-post*

= reference price

Figure 7: Definitions: reference prices and capacity-based transmission tariffs

NON-PRICE CAP AND PRICE CAP REGIMES

ARTICLE 3(3) AND 3(17)

Responsibility: subject to national decision based on Article 41(6)(a) of the Gas Directive

Without going into the details on setting the regulatory regime, the TAR NC splits all the regulatory regimes into two categories: price cap and non-price cap. The main difference between the two is reflected in what is set: (1) the maximum transmission tariff based on revenue for a price cap regime; or (2) the revenue for a non-price cap regime. Therefore, the concept of ‘target revenue’ is related to the price cap regime, while the concept of ‘allowed revenue’ is pertinent to the non-price cap regime. Figure 8 explains this difference. The TAR NC provides a non-exhaustive list of examples of non-price cap regimes in its definition: revenue cap, rate of return and cost plus. Also, the TAR NC allows for a given TSO to function under both price cap and non-price cap regimes. As of September 2017, the majority of the EU TSOs function under the non-price cap regime. For example, a combination of price cap and non-price cap regimes applies in the Czech Republic and Italy, and the price cap regime applies in Slovakia.

TAR NC Implementation Document – Second Edition September 2017 | 39