Options for Great Britain’s implementation of the European Union Network Code on Capacity Allocation Mechanisms in Gas Transmission Systems (Regulation 984/2013) at the Bacton entry point

Publication date
31st October 2013
Closing date
12th December 2013
Policy areas
Status

The Network Code on Capacity Allocation Mechanisms (CAM) (the CAM Network Code) comes into force on 3 November 2013 and must be implemented by 1 November 2015.  In implementing the CAM Network Code, there are two Great Britain (GB)-specific issues relating to the Bacton gas terminal on which we are keen to hear industry views.  The first concerns the implementing of “bundled” capacity products; the second concerns the way in which Bacton entry capacity will be sold under the CAM regime.

This letter (i) sets out the options for each issue; (ii) explores the advantages and disadvantages of each option; (iii) sets out our preferred approach and the rationale behind it; and (iv) summarises our current thinking on next steps.

We have also published slides from an industry workshop held on 25 November 2013.

Summary

CAM Implementation will bring significant changes to the way gas capacity is allocated and nominated at GB Interconnection Points (IPs). This letter seeks industry views on two issues related to these changes.

The first issue concerns how capacity products should be bundled at the Bacton aggregated system entry point (ASEP), where the European interconnectors ‘meet’ the National Transmission System (NTS), ie whether a bundled capacity product should include two Transmission System Operators (TSOs) or three TSOs. Given that both options would appear to be CAM compliant, we consider the two European gas interconnectors – Interconnector UK (IUK) and BBL – should propose which option they will implement subject to being CAM compliant and meeting their licence objectives.

The second issue concerns how capacity at Bacton, which accommodates gas arriving from the UK Continental Shelf (UKCS) in addition to the two interconnectors, should be treated under CAM given the narrow scope of CAM to IPs. Our current view is that the existing Bacton ASEP will need to be split, with the creation of a single European IP ASEP (encompassing both entry from IUK and BBL) and a UK Continental Shelf (UKCS) ASEP.  In order to maximise the offer of bundled capacity (as required under CAM), we consider that the baseline of the European IP ASEP should be the sum of the maximum technical capacities of the two interconnectors (1302.0 GWh/day). The UKCS ASEP baseline would then be the existing Bacton ASEP baseline less the capacity provided to the European IP ASEP (481.4 GWh/day).  We do not consider that there is a need to split the European IP ASEP any further.  Also, we do not consider that capacity, either already purchased or purchased after CAM implementation, would be freely interchangeable between the UKCS and European IP ASEPs. However, we encourage NGG to consider the tools available for shippers to revise their UKCS ASEP and European IP ASEP capacity holdings as their needs change.

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