Conditional capacity

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What is it about?

​​​​​​​​​​​​​​​​To ensure that gas can be traded independently of its location within a market area, network users must be free to book entry and exit capacity independently from each other. The Agency analyses the current restrictions in capacity products and publishes a dedicated Report. ​​


What is a conditional capacity contract?

The entry-exit system is a market access model that allows network users to book capacity rights independently at any entry and any exit point of the transmission network. Conditionalities exist when a network user is not allowed to book entry and exit capacities independently from one another, or faces restrictions on freely flowing gas from any entry to any exit point of a market area or zone. They also exist when network users can choose not to use the free and fully allocable firm capacity and commit to a more restrictive contract. In such cases, network users are incentivised to limit their capacity rights by discounts. The current EU legislation recognises firm and interruptible capacity products, while it does not explicitly regulate conditional capacities.​​

Which countries are concerned? ​

​In 2019, the use of conditional products and legacy contracts with contractual limitations occurred in Austria, Belgium, Bulgaria, Germany, Hungary, Luxemburg, the Netherlands, Poland, Romania, Slovakia, and Great Britain. The underlying Study provides a full review of these cases. ​​

What does ACER recommend?

ACER recommends the national regulatory authorities and the transmission system operators to:

  • Create an EU-wide catalogue of conditional products with product and pricing descriptions

  • Harmonise the discounts of conditional products,

  • Study the cross-border effects of conditional products and their tariffs to limit cross-subsidies between transit and domestic users

  • Provide higher transparency about the traded volumes and capacity tariffs of conditional products on the ENTSOG Transparency Platform

  • Perform a cost-benefit analysis for zone mergers potentially creating or increasing the use of conditional products and assess on a case-by-case basis whether conditional capacity products are favourable

  • Terminate transit contracts that do not follow the entry-exit model.

The Agency also recommends to further clarify the definition of the entry-exit model in the EU legislation. ​​​

 

 

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