ENTSOG Tariff NC - Implementation Document 2nd Edition

General Requirements

VARIABILITY OF MULTIPLIERS, SEASONAL FACTORS AND DISCOUNTS Responsibility: subject to consultation per Article 28(1) by NRA; subject to decision by NRA The CAM NC foresees five standard capacity products: yearly, quarterly, monthly, daily and within-day. Article 11 of the CAM NC covers the ‘runtime’ or start and end date of each product. Chapter III of the TAR NC addresses the calculation of reserve prices for non-yearly standard capacity products, and also discounts for all interrupt- ible products. Table 7 shows how non-yearly prices can vary following the TAR NC rules on multi- pliers, seasonal factors and interruptible discounts. The example involves only a quarterly standard capacity product, at one IP.

ARTICLE 12(1)

MULTIPLIERS, SEASONAL FACTORS AND INTERRUPTIBLE DISCOUNTS FOR QUARTERLY PRODUCTS AT AN IP

Multiplier

Multiplier and seasonal factor

Multiplier and interruptible discount

Multiplier describes the pricing relationship between the short-term product and the yearly product

Seasonal factor allows for variations in the seasonal value of the same standard capacity prod- ucts Quarterly – the same multiplier for all four products but different seasonal factors Assumptions: \\ Q1 and Q4 have 92 days, Q2 has 90 days, Q3 has 91 days \\ Multiplier is 1.5 Initial values:

Although the firm price is the same price for a given ‘category’ of products, there can be different inter- ruptible prices – depending on factors Pro and A Quarterly – the same multiplier for all four products but different probability of interruption/factor ‘A’. Assumptions: \\ 2 products P1 and P2 with ‘Pro’ of 0.1 and 0.25 in Q1 \\ 2 products P3 and P4 with ‘Pro’ of 0.15 and 0.2 in Q2 \\ ‘A’ factor is 1 in Q1 and 2 in Q2, no seasonal factor at all \\ Q1 has 92 days (d), Q2 has 90days \\ Reserve price (RP) for annual product is 365 \\ Multiplier is 1.5 Calculation of discount: Di = Pro×A×100×RP×(d / 365)×1.5 \\ Discount for P1 in Q1 = 10%×1×100%× 365×(92/365)×1.5 = 13.80 \\ Discount for P2 in Q1 = 25%×1×100%× 365×(92/365)×1.5 = 34.50 \\ Discount for P3 in Q2 = 15%×2×100%× 365×(90/365)×1.5 = 40.50 \\ Discount for P4 in Q2 = 20%×2×100%× 365×(90/365)×1.5 = 54.00

Quarterly – the same multiplier for all four products

\\ Q1 firm 1.5 \\ Q2 firm 1.5 \\ Q3 firm 1.5 \\ Q4 firm 1.5

\\ Q1 firm 1.5×1.5 \\ Q2 firm 1.5×1.7 \\ Q3 firm 1.5×0.8 \\ Q4 firm 1.5×0.7

Average product: (1.5×1.5×92+1.5×1.7×90+1.5×0.8×91+ 1.5×0.7×92) / (92+90+91+92) = [1.5(1.5×92+1 .7×90+0.8×91+0.7×92)] / 365 ≈ 1.760 Correction factor: 1.5/1.760 Corrected values: \\ Q1 firm 1.5×1.5×(1.5/1.760) = 1.5×1.28 \\ Q2 firm 1.5×1.7×(1.5/1.760) = 1.5×1.45 \\ Q3 firm 1.5×0.8×(1.5/1.760) = 1.5×0.68 \\ Q4 firm 1.5×0.7×(1.5/1.760) = 1.5×0.60 After correction, average products falls within multi- plier range: [1.5(1.28×92+1.45×90+0.68×91+0.60× 92)] /365 = 1.5

Table 7: Multipliers, seasonal factors and interruptible discounts for quarterly products at an IP

The TAR NC calls for the same multiplier at a given IP for the same standard capac- ity products. This is based on the formulas for calculating the non-yearly reserve prices foreseen in Article 14. Such formulas do not allow for different multipliers at a given IP for the same standard capacity products. Also, the TAR NC envisages that multipliers, seasonal factors and interruptible discounts may be: (1) the same at all the IPs; or (2) the same at each group of the IPs; or (3) different at all the IPs.

TAR NC Implementation Document – Second Edition September 2017 | 73