ENTSOG Tariff NC - Implementation Document 2nd Edition

ARTICLE 8(1)(C)

DISTANCE CALCULATION

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

Shortest pipeline distance for capacity weighted distance reference price methodology To measure distance for the CWD, Article 8 considers the pipeline approach, which selects the shortest distance of the pipeline routes between: (1) an entry point or a cluster of entry points; and (2) an exit point or a cluster of exit points. Clustering introduces two possibilities: \\ ‘Distance before cluster’: calculate the weighted average of the shortest pipe- line distances of all physical points of the cluster. The weights can depend on the technical capacity. \\ ‘Cluster before distance’: select a focal point of the cluster, and then calculate the shortest distance of the pipeline routes from or to such a focal point. A dom- inant physical point of the cluster can constitute the focal point. When applying CWD, Article 8 does not consider other distance methodologies such as: (1) average pipeline distance, as opposed to the shortest; and (2) airline distance. However, a TSO/NRA can consider such methodologies within a proposed alter­ native RPM, including a Modified CWD. Below are two examples of alternative approaches to distance. In addition, the concept of distance is closely linked to the one of ‘flow scenario’ in Article 8 for CWD. The definition of a flow scenario is provided in Article 3 of the TAR NC and it is illustrated in Annex E. In simplified terms, an entry point and an exit point may be combined in a flow scenario if there is at least a pipeline to connect them. As regards cases which do not constitute a flow scenario, ENTSOG believes that: \\ If there exists no pipeline to connect a specific entry point and a specific exit point in a given network, these two points cannot be combined into a flow scenario. \\ If a network point is both an entry and an exit point, the entry followed by the exit at this point does not constitute a flow scenario. Such use of TSO networks is very insignificant in most networks, and considering it as a flow scenario would distort relative distances and tariffs calculated for CWD compared to combinations of distinct entry and exit points. As developed in Annex E, these two cases do not correspond to flow scenarios and where applicable it is necessary to correct both distances and forecasted contracted capacities to avoid tariff distortions.

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TAR NC Implementation Document – Second Edition September 2017