Questions and answers

September 14, 2023
Transmission secondary market capacity transfer

Capacity can be transferred directly from one network user to another network user according to sub-paragraph 6.1* of the Common Regulations for the Use of Natural Gas Transmission System (hereinafter – the Transmission regulation)

In case the capacity is transferred in the secondary market  the use of transferred capacity will be affected following way:

  1. If capacity is transferred before 9:00 UTC on a day before the beginning of booked capacity product in full term of the capacity product, then the capacity retains  capacity product features within the meaning of sub-paragraph 4.7.1 of the Transmission regulation in case of capacity restriction as described in sub-paragraph 4.7.6.6** of the Transmission regulation.
  2. If the duration of capacity transferred is shorter than booked capacity product, or the capacity is transferred after 9:00 UTC on a day before the beginning of the capacity product, then capacity for capacity restriction purposes, as foreseen in sub-paragraph 4.7.6.6. of the Transmission regulation, is treated as daily capacity.
  • Therefore, if the duration of transferred part of capacity product is shorter than specified duration of capacity product, the transferred capacity part of capacity product cannot be considered as the same capacity product, which was booked by the network user on the primary market, because after the partial transfer of the capacity product the transferred part of capacity product does not qualify as the same duration capacity product.
  • It is not possible to transfer transmission capacity for past periods. Therefore, if the period of capacity product has started, it is not possible to transfer capacity product features as it is not possible to transfer full period of capacity product.
  • Capacity products are offered only by TSO on the primary market. According to point 22 of paragraph 1 of Article 22 of Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 the “primary market” means the market of the capacity traded directly by the TSO.  Therefore, if duration of capacity transferred in secondary market corresponds to other capacity product by duration, but was not booked as such, is not considered as a product of duration of the transferred capacity and will be treated as daily capacity for capacity restriction purposes.
  • Capacity can be transferred in secondary market only by network user who booked the capacity (first sentence of sub-paragraph 6.1.* of the Transmission regulation). Therefore, it means that capacity that has been received on secondary capacity market cannot be transferred again on secondary capacity market.

Informative example with yearly capacity product:

1) if long-term (yearly) capacity product is transferred in full duration before 9:00 UTC September 30 it will remain as yearly capacity product within the meaning of sub-paragraph 4.7.1.1 of the Transmission regulation.

2) if yearly capacity from yearly capacity product is transferred for partial duration or after 9:00 UTC September 30 (which would mean also partial transfer), the capacity will not be considered as yearly capacity product within the meaning of sub-paragraph 4.7.1.1 of the Transmission regulation.

It must be noted that JSC Conexus Baltic Grid (Conexus) in cooperation with Estonian gas transmission system operator Elering AS has submitted for approval to the Latvian and Estonian national regulatory authorities the proposal for the amendments of the Transmission regulation. Please take into account, that the proposal contains a new provision, which stipulates, that “for the purposes of congestion management, capacity obtained through secondary capacity trading is treated as daily capacity product. When allocated capacity that has been transferred through secondary capacity trading, it is allocated from the transferring network user´s portfolio, starting with shorter duration capacity products and then progressing to longer duration capacity products.”.

The proposal submitted to the national regulatory authorities in August does not specify regulation regarding the already transferred capacity in secondary market before the entry into force of the proposed amendments to the Transmission regulation. However, Conexus is open to discuss and clarify the intended amendments to the Transmission regulation, taking into account the interest of the market.

*6.1. A network user who has booked the firm capacity products may agree with another network user and transfer right to use the firm capacity product or part of it. Secondary capacity trading shall be restricted to transfer of rights to use capacity of an entry/exit point for a specific time period. Obligations arising from the booked capacity product, including, but not limited to, obligation to pay the TSO for the booked capacity product, shall not be transferred and shall maintain with the network user intending to transfer the booked capacity product. A network user by transferring right to use the capacity product or part of it loses its right to surrender the transferred capacity.

** 4.7.6.6. In case of capacity restrictions at Kiemenai entry/exit point, capacity shall be restricted proportionally among network users in the following order: first, interruptible capacity of the shortest period; then interruptible capacity of a longer period; and finally, if demand still exceeds the supply, firm capacity of a shorter period, and if necessary, firm capacity of a longer period.

June 17, 2022

  1. With which time server the platform.conexus.lv synchronizes its system clock? Is there a way to ask for current system time from the platform.conexus.lv server? It looks like some messages have been sent too late or early by Trader because of possible server system time difference.

Server platform.conexus.lv uses NTP protocol for time synchronisation. Based on the protocol, there can be different upstream time synchronisation data sources, based on upstream (lesser stratum level) server availability. Currently there are no standard way to ask for current system time from platform.conexus.lv server. On message processing it have to be taken into account that there might be simultaneously several messages received by the system, some time necessary for the message transmission and principle, that system operators allocate capacity for the network users on their backend systems in order of received messages according to capacity allocation windows.

  1. If the Trader system sends several Auction bid (ALN) messages after very short time intervals with the same business content (all the AuctionBid_Document XML structure sub-node values are the same in all the sent messages) to platform.conexus.lv server then which of them is taken into account as the real action bid? Let’s assume the action starts at 10:00:00. and Trader sends 2 ALN messages: message A arrives at 10:00:01, message B arrives at 10:00:03. Which of the 2 messages will be considered by platform.conexus.lv server as the final/correct bid and which of them will be discarded – A or B? What will be interpreted by the platform.conexus.lv server the official time at which the Trader bid came in: 10:00:01 or 10:00:03?

In general, all ALN messages will be processed and none will be discarded. Every ALN message will be checked for validity, based on ID and version of the message. In that case, general EDIG@S message processing guidelines will be followed. For example, in case if there would be already other message for the same capacity product and period with the higher version, the message will be rejected. There might be other reasons for message rejection. For each message received, arrival time of that message will be considered as the time received.

 

  1. If and how is it possible to determine if an action bid sent by Trader to platform.conexus.lv has passed all the business rules checks and is actually considered a valid business document and is allowed to participate in the auction? Is it correct to assume that the quick automatic accepted response from platform.conexus.lv means that the Auction bid (ALN) message has been checked only formally (if XML structure is OK and values are of correct datatype in the XML nodes) and not against all the business rules?

According to EDIG@S protocol and general message processing guidelines, every message will be first checked for syntactic validity and only afterwards will be checked according to the applicable business rules. Therefore, the first check done is only for technical validity of the message. For every message there are ACKNOW message, which is created based on EDIG@S processing guidelines, i.e – there can be either positive ACKNOW messages (mast commonly - 01G) and negative ACKNOW messages (different system codes are possible). However, AUCRES messages are used to provide the outcome  of the capacity allocation process based on received AUCBID (ALN). For the message exchange EDIG@S message format guidelines are followed.

 

    1. For example if the Auction bid (ALN) message from Trader arrived into platform.conexus.lv server at 09:59:59 and cannot in business terms participate in the auction (because of arriving 1 second too early) then how will Trader system be notified about this or is there a way to ask about the acceptance of the Auction bid (ALN) message with a second message?

This can be checked by corresponding ACKNOW message

 

    1. There seems to be a separate message type AUCRES in the specification (https://www.conexus.lv/uploads/filedir/VTZd/Information_Exchange_Guidelines/20200710_information_exchange_guidelines_v10_finalized_nc.pdf) but it looks like this gives information after the action has ended, so too late in the business process to still try to send a new Auction bid (ALN) message.

AUCRES messages are used to provide the result of capacity allocation process.

 

Overall, EDIG@S message format and general implementation guidelines are followed and additional information about message processing principles can be obtained at www.edigas.org.

April 29, 2022

  • Question - how IT Platform will work after May 1
  • Answer - During confirmation of submitted nominations, the proportion of the technical capacity of Inčukalns UGS for the remaining hours of the day will be taken into account, while also nominations submitted by other storage users will be taken into account. Also, in cases where the direction of the nomination is changed during the gas day, the principle of proportionality according to the remaining hours of the gas day will be applied, as well as the capacity type (firm or interruptible) of the respective direction.

March 31, 2022

  • Question - Is it possible to transfer capacity booked for the next storage cycle and how?
  • Answer - Capacity booked for the next cycle can be transferred manually by sending application (digitally signed) by each party to capacity@conexus.lv.

March 2, 2022

  • Question - How the injection congestion management will be done if congestion will happen in March and April 2022 (in case of nomination submitted earlier than 15:00 on the previous day) ?
  • Answer - Currently congestion management works exactly same way as during injection season in summer.

November 17, 2021

Information about Inčukalns underground gas storage withdrawal capacity congestion management is HERE.

April 19, 2021

  • Question - What happens if less than 5% of stocks remain in the Incukalns gas storage by the end of current storage cycle and there no available capacity for the next storage cycle?
  • Answer - In situation when system user has inventory at end of 2020/2021 cycle within bundled capacity product:  if inventory is less or equal than 5% from available bundled capacity, inventory stays as 1-year bundled capacity product and new cycle tariff (excluding auction premium) is applied. Inventory above 5% will be converted to Stock transfer product and respective tariff will apply.

Same happens also to users who have not booked capacity for cycle 2021/2022.

In situation when system user has inventory at end of 2020/2021 cycle within two-year bundled capacity product booked in 2019: if inventory is less or equal than 5% from available bundled capacity, inventory stays as 1-year bundled capacity product and new cycle tariff (excluding auction premium) is applied. Inventory above 5% will be converted to Stock transfer product and respective tariff will apply.

In situation when system user has inventory at end of 2020/2021 cycle within two-year bundled capacity product booked in 2020, all this inventory stays as two-year bundled capacity product for 2nd year.

In situation when system user has inventory at end of 2020/2021 cycle within market product, all inventory will be converted to Stock transfer product and respective tariff will apply.

March 15. 2021

  • Question - 

Could you please clarify one thing for us in regards to paragraph 81.1 of “Rules of Use of the Inčukalns Underground Gas Storage Facility” https://capacity.conexus.lv/uploads/filedir/storage_regulation_eng.pdf
It says: 
81. At the end of the 2020/2021 storage cycle of the system user within the capacity product, the period of use of which expires, the existing stocks shall be transferred to the next storage cycle as follows: 
81.1. regarding the stocks at the end of the storage cycle not exceeding 5% of the total booked capacity within the bundled capacity product and the two-year bundled capacity product, the system user shall be deemed to have booked bundled capacity product for the next storage cycle in the relevant stock quantity to be settled with the system operator in accordance with the tariff for the relevant capacity product set for the next storage cycle;

So does it mean that 5% of expiring 2020/2021 1yBCP product (if our gas inventories remain unwithdrawn with given 1yBCP product) will be converted into 2021/2022 1yBCP product at the base tariff of 1,0226 EUR/MWh or will auction results somehow be taken into account?

  • Answer - Yes, but auction will not affect tariff.

So does it mean that 5% of expiring 2019/2021 2yBCP product (if our gas inventories remain unwithdrawn with given 2yBCP product) will be converted into 2021/2023 2yBCP product at the base tariff of 1,0865*2= 2,1730 EUR/MWh or will auction results somehow be taken into account?

  • Answer - It will be converted into 2020/2021 1yBCP product at current tariff 1,0226 EUR / MWh, auction will not affect tariff.

March 12, 2021

  • Question - how cost of 2 year bundled capacity product will be calculated
  • Answer - (Amount x Tariff x 2) + (Amount x Premium) = Cost of 2YBCP in 2 years

March 3, 2021

  • Question - There is a mistake in the following document Bundled capacity product Auction offer
  • Answer - This shall be corrected
  • Question - Is Auction participant allowed to create extra rows in the Excel file after the row 22 if more than 4 bids are supposed to be submitted? 
  • Answer - Yes, you can create unlimited number of rows.
  • Question - Could you please confirm that Auction participant should indicate in this form bid for the premium on top of the base tariff confirmed by LV PUC?
  • Answer - Yes, Auction participant should indicate in this form bid for the premium on top of the base tariff confirmed by LV PUC
  • Question - Are PUC tariffs for storage products confirmed for a 5-year period or there is still probability that base tariffs will be reviewed next year?
  • Answer - Tariffs will be recalculated every year depending on situation in regulative account.
  • Question - While participating in auction for 2-year product shall Auction participant express his bid as EUR/MWh/storage cycle or EUR/MWh/2-storage cycle period?
  • Answer - Auction participant shall express his bid as EUR/MWh/2-storage cycle period/

February 5, 2021

  • Question - Missing balancing prices in Conexus web site.
  • Answer - According to Common Regulations for the Natural Gas Balancing of Transmission System, point 8.11. the TSO shall publish on its website the marginal sell price and the marginal buy price of gas day D no later than the end of gas day D+3.
  • Question - Will Conexus publish tariffs sumbitted to Regulator in case if there is an update since submission at end of October 2020?
  • Answer - No, additional information will not be published.