Converting one gas quality into another. High Caloric: Methane content of 87% to 98.9% Wobbe index from nominal value of 15.0

Transcription

1

2 Structure Legal origin 3. charges 4. system 5. Evaluation duty of market area managers operators 6. Misuse of conversion 2

3 Converting one gas quality into another High Caloric: Methane content of 87% to 98.9% Wobbe index from nominal value of 15.0 Low Caloric: Methane content of 80.1% to 87% Wobbe index from nominal value of 12.4 Since 1 April 2011 Germany has had the constellation of a cross-quality market area conversion portfolio effects, synergies 3

4 Legal origin Section 21 German Gas Network Access Ordinance (GasNZV): Reducing the number of market areas 1. Pipeline network operators had to reduce the number of market areas to maximum one L gas and 2 H-gas market areas by April 1, By August 1, 2013 the pipeline network operators must implement the measure that is most suitable and economically practical to reduce the number of market areas to H+L-Gas L-Gas H-Gas 4

5 charges Conv. per MWh reduces the quantities of compensation energy for the balancing group managers From 1/4/11 Traders have full freedom regarding the quality of the gas that they feed into the market area From 1/10/2011 From 1/4/2012 GASPOOL NCG

6 charges APX TTF DAM All-Day Index (incl /MWh cross-border costs) - Daily reference price natural gas GASPOOL 6

7 system On 27 March 2012 Ruling Chamber 7 of the German Federal Network Agency resolved to introduce a conversion system in cross-quality market areas (KONNI). Tasks: 1. Control the feed-in behavior of transport customers that are active in the market area as regards conversion 2. Covering the conversion costs Components: Charges: opposing balances in the qualities of the BG settlement Levy: is charged to all feed-in transport customers 7

8 system Determining the upper limit: In principle, the charge is the same in both directions, but in exceptions different charges can be defined temporarily if network stability would otherwise be put at risk. If the defined charge is not sufficient to cover the actual conversion costs, this is reflected in the levy. Only in exceptional cases can a charge increase from one period to the next. A time-weighted price is formed to convert quantities of biogas across the balancing period 8

9 system The Federal Network Agency assumes that the benefits of cross-quality trade, such as the increased liquidity for all trading partners, will increase. Lower upper limit, levy 9

10 system A conversion levy on all physical feed-in quantities This is to cover costs that could not already be covered by the charge charge Socialization levy 2016 Aligned to the principle of result neutrality A levy does not have to be introduced if the costs of conversion can be covered by the charge. 10

11 Evaluation On February 1 each year the market area managers must report on the results of the conversion charge system. The market area managers must anchor protective measures against misuse of the conversion system in their contracts (control energy) 11

12 Misuse of conversion 12

13 Misuse of conversion The market area manager must include regulations to protect against misuse of the conversion system in their control energy contracts. The balancing group of the BGM is underfed by a total of 4 million kwh. It has different balances in the gas qualities. It sells H-gas to GASPOOL while buying L-gas 13

14 Misuse of conversion In the first step, control energy settlement takes effect for the difference between positive compensation energy and the tranches to be siphoned off successively. From a virtual aspect the invoicing BG is now balanced 14

15 Misuse of conversion The control energy provider is completely misusing the conversion system It is siphoning off the margin that it achieves by completely skewing its balancing group. This is completely siphoned off but the provider still gets the conversion charge reimbursed. 15

16 Misuse of conversion Quality balances each of 2,600 MW remain The BGM can now have achieved a real profit only through the remaining control energy quality of 9,600 MW. Everything else has been settled/siphoned off. 16