ENTSOG Tariff NC - Implementation Document 2nd Edition

CLUSTER OF ENTRY OR EXIT POINTS

ARTICLE 3(19)

Responsibility: subject to consultation per Article 26(1) by TSO/NRA, as NRA decides; subject to decision by NRA

Clustering is the treatment of a group of entry points or exit points as one entry point or one exit point prior to applying the RPM. Such points can belong to a homogene- ous group or be located near each other. The concept of ‘homogeneity’ does not it- self depend on ‘vicinity’. With clustering, the selected homogeneous points or points in the vicinity of each other become a single ‘virtual’ point. The rules for ‘how to clus- ter’ are: \\ Clustering may apply to some points or all points of the same homogeneous group of points. \\ Clustering may apply to some points within the vicinity of each other. \\ It is not possible to cluster entry points with exit points. The capacity of a cluster is the sum of the capacities of the points it brings together. The RPM considers only a cluster in the aggregate, as opposed to its individual points, so the RPM produces a reference price for the cluster as a ‘commercial’ point although the ‘physical’ points still exist. Where the RPM requires geographical coordinates for a cluster, it is possible to use a capacity-weighted average of the coordinates of its constituent points, or another approach. No specific provision in the TAR NC restricts the use of clustering. The clustering decision belongs to the entity in charge of applying the RPM, as decided by the NRA. However, the TAR NC allows clustering for CAA and the CWD counterfactual. In practice, the main motivation for clustering is a need to reduce the number of points for the application of the RPM. In the absence of clustering, it may be cumbersome and impractical for the RPM to determine reference prices for hundreds of entry and exit points. Clustering offers the advantage of simplified considerations. For example, clustering may apply at either side of an IP where there is more than one TSO, which in practice means more than one entry and/or exit point. If an IP connects TSO A exit with TSO B1 entry and TSO B2 entry, TSO A has two exit points. In such case, both exit points can be considered as one. Table 1 compares clustering and equalisation, and Annex A provides further details.

COMPARISON BETWEEN CLUSTERING AND EQUALISATION

Criteria

Clustering

Equalisation

Definition

Option 1: \\ Linked to the concept of ‘homogenei- ty’; applicable for some or all points within a homogenous group of points Option 2: \\ Linked to the concept of ‘vicinity’; such points must be within the vicinity of each other

\\ Linked to the concept of ‘homoge- neity’; applicable for some or all points within a homogenous group of points \\ No requirement for vicinity

Application

Only ex-ante – before RPM application Only ex-post – after RPM application

Result

Common reference price for a cluster; no separate reference prices at each physical point within a cluster

Separate and same reference prices at each physical point within a given homogenous group

Table 1: Comparison between clustering and equalisation

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