ENTSOG Tariff NC - Implementation Document 2nd Edition

Reserve Prices for Interruptible Capacity Products

INTERRUPTIBLE DISCOUNTS

ARTICLE 16

Responsibility: the level of discounts is subject to consultation per Article 28(1) by NRA; subject to decision by NRA

General Article 16 requires the calculation of reserve prices for standard interruptible capac- ity products by applying a discount to the reserve prices for the corresponding standard firm capacity products. Discounts can be ex-ante or ex-post : \\ An ex-ante discount involves an upfront calculation based on the probability of interruption and the estimated economic value of the product. An ex-ante discount provides a reserve price for a standard interruptible capacity product. \\ An ex-post discount compensates network users in the event of interruption. Ex-post discounts can only apply to IPs where physical congestion did not prompt any interruption of capacity in the preceding gas year. The application of an ex-post discount replaces an ex-ante discount to the reserve price for a standard interruptible capacity product. With an ex-post discount, the reserve price for interruptible product should be the same as the reserve price for a firm product of an equivalent duration. As of March 2017, the majority of the EU TSOs offer ex-ante discount. Ex-post discounts are offered in Austria, the Czech Republic, Hungary, Poland, Romania and Slovakia. It is not possible to combine ex-ante and ex-post discounts for the same interrupti- ble product at the same IP. The formulas for calculating ex-ante and ex-post dis- counts are set out below. The level of the ex-ante and ex-post discounts is subject to NRA approval in accord- ance with the process outlined in Article 28. Ex-ante approach – how to calculate discounts The TAR NC sets the ex-ante discount for standard interruptible capacity products proportional to the probability of interruption ‘Pro’ and the adjustment factor ‘A’, calculated in accordance with the following formula:

Di ex-ante

= Pro × A × 100%

Where: Di ex-ante

is the level of an ex-ante discount;

Pro

factor is the probability of interruption which refers to the type of standard interruptible capacity product; is the adjustment factor applied to reflect the estimated economic value of the type of standard interruptible capacity product, calculated for each, some or all IPs, which shall be no less than 1.

A

TAR NC Implementation Document – Second Edition September 2017 | 85

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