The Gas Market Model Ordinance 2012 introduced a new gas market model in Austria. The ordinance regulates network access, capacity management and the balancing system in the three Austrian gas market areas: East, Tyrol and Vorarlberg.

The ordinance was passed by the executive board of the national regulatory authority, E-Control, which has competence to issue secondary legislation in specific areas. E-Control recently published a draft of the amendment of the Gas Market Model Ordinance 2017. A public consultation of the intended amendment was held until August 2 2017.

In particular, the amended provisions implement the regulatory regime set out in EU Regulation 2017/459, establishing a network code on capacity allocation mechanisms in gas transmission systems and repealing EU Regulation 984/2013 (CAM Network Code). The main change is the introduction of a capacity conversion service. The new provisions will enter into force on September 15 2017 and February 1 2018, respectively.

CAM Network Code

The CAM Network Code was first established by EU Regulation 984/2013. This regulation applies to interconnection points and introduced an obligation on adjacent transmission system operators to jointly offer bundled capacity products at interconnection points as of November 1 2015. In this respect, 'bundled capacity' means a standard capacity product offered on a firm basis, which consists of corresponding entry and exit capacity at both sides of every interconnection point.

However, the introduction of capacity bundling led to the so-called 'capacity mismatch issue'. This issue arises where network users holding unbundled capacity bookings on one side of an interconnection point may not find the equivalent unbundled capacity on the other side of the interconnection. This problem is addressed in Article 21(3) of the new EU Regulation 2017/459, which introduces a capacity conversion service. The envisaged amendment to the Gas Market Model Ordinance contains a new provision implementing the capacity conversion service in Austria.

Capacity conversion service

Pursuant to Section 5 of the amendment of the ordinance, transmission system operators must offer network users holding mismatched unbundled firm entry or exit capacity at one side of an interconnection point a free capacity conversion service. This service applies to interconnection points where the network user had to buy bundled firm freely allocable entry or exit capacity in the form of annual, quarterly or monthly capacity products because the unbundled exit or entry capacity on the other side of the interconnection point offered by an adjacent transmission system operator was insufficient.

Due to this capacity conversion service, network users need not pay the charge for the mismatched unbundled firm entry or exit capacity that corresponds to the amount and duration of bundled freely allocable entry or exit capacity which had to be purchased twice. The network users have to pay only the auction premium involved in booking the mismatched unbundled capacity.

In order to use the capacity conversion service, network users must notify the transmission system operator within five days of booking the bundled freely allocable entry or exit capacity. For this purpose, transmission system operators must publish standard forms on their websites. However, the capacity conversion service applies only to mismatched unbundled fixed entry and exit capacity that was purchased before or on March 6 2017.

Section 5 of the amended Gas Market Model Ordinance will take effect on September 15 2017.

Other changes

In addition to the changes mentioned above, the amendment has deleted the provisions relating to:

  • combined entry and exit points;
  • contract durations;
  • online platforms for offering capacity; and
  • the secondary market for entry and exit capacity.

These provisions have become obsolete because they are stipulated in the directly applicable CAM Network Code.

Moreover, the amendment contains system access rules for storage facilities and producers of biogenic gas. Adjustments were also made regarding:

  • the calculation of system losses and the own consumption of special balance groups; and
  • the data of load-metered consumers that must be provided by distribution system operators.

The amendment further introduces shorter lead times for re-nominations and schedule changes and the applicable data format and communication channel.

Comment

The envisaged amendment – and especially the newly implemented capacity conversion service – resolves the capacity mismatch issue by compensating network users for the economic disadvantages that arise from having to buy double capacity due to the bundling regime at interconnection points. It also implements the new CAM Network Code and includes certain other changes.

This article was first published on www.internationallawoffice.com