Definitions of interruptible and firm capacities in the European gas market can be found in Article 2(13) and (14) of the Gas Regulation (Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on the conditions for access to the natural gas transmission networks), which stipulate, respectively:
- “‘interruptible capacity’ means gas transmission capacity that may be interrupted by the transmission system operator in accordance with the conditions stipulated in the transport contract”;
- “’firm capacity’ means gas transmission capacity contractually guaranteed as uninterruptible by the transmission system operator.”
Firm capacity products allow for the effective use of an entry-exit system, since firm products allow network users freely and independently to book and allocate capacity at entry and exit points and reach the Virtual Trading Point (VTP) on a firm basis (ACER Report of 5 April 2019 on the conditionalities stipulated in contracts for standard capacity products for firm capacity).
The ACER observed, moreover, that firm products were downgraded to interruptible ones when they proved insufficient to access the relevant entry- and exit points of the gas system as firm capacity, however, such a review does not mean, it itself, that the product loses considerably its value.
ACER in the said document of 5 April 2019 notes that some interruptible products function with limited levels of interruption, and still serve the network as a product of a high value. In other cases, interruptions occur more frequently.
Given that according to Article 14(1) of the Gas Regulation “Transmission system operators shall [...] provide both firm and interruptible third-party access services. The price of interruptible capacity shall reflect the probability of interruption;[...]” the question remains whether the legislative framework only foresees firm or interruptible capacity products, or other products that have a ‘mixed’ character could also be introduced.
Given the above circumstances, the ACER proposed to create a EU catalogue of conditional products with product descriptions, indicating the value of the products.
The Agency, moreover, recommended a fully transparent (by publishing data via the ENTSOG Transparency Platform), and, to the extent possible, harmonised approach to the application of discounts concerning conditional products.
The said transparency would allow for the full identification of conditional products, their traded volumes and prices.
The said ACER Report of 5 April 2019 observes, furthermore:
“With further efforts, the still existing dedicated transit lines shall be blended into the national entry-exit designs, invoking the re-negotiation/revision clause in the dedicated transit contracts.
The blending is especially important when the dedicated transit lines do not allow access to the VTP and should be done in line with the requirements of the Network Code on harmonised transmission tariff structures for gas (Commission Regulation (EU) 2017/460 of 16 March 2017 - ‘NC TAR’) is implemented.
The Third Energy Package foresaw that transit across the EU is treated in the same way as domestic transportation.
The current revision of the Gas Directive strengthens the concept by requesting that new capacity contracts be also compatible with the entry-exit concept.”
The roles of firm capacity products and interruptible (conditional) ones is clearly accentuated in Recitals 12 - 13 of the European Commission Proposal of 15 December 2021 for a Regulation of the European Parliament Parliament and of the Council on the internal markets for renewable and natural gases and for hydrogen (recast - COM/2021/804 final), which read:
“(12) Access to the entry-exit system should be generally based on firm capacity. Network operators should be required to cooperate in a way that maximises the offer of firm capacity, which in turn enables network users to freely allocate the gas entering or exiting on the basis of firm capacity to any entry or exit point in the same entry-exit system.
(13) Conditional capacity should only be offered when network operators are not able to offer firm capacity. Network operators should define the conditions for conditional capacity on the basis of operational constraints in a transparent and clear manner. The regulatory authority should ensure that the number of conditional capacity products is limited to avoid a fragmentation of the market and to ensure compliance with the principle of providing efficient third-party access”.
FAQs on REMIT fundamental data and inside information collection, ACER
Reporting negative values for available capacity due to overbooking. (available capacity = (technical capacity) – (contracted capacity).
Should available capacity, in case of overbookings, be reported with a negative value, or should overbooked capacities not be taken into account?
The contracted capacity, which is reported within fundamental data reporting, is the sum of the sold firm and interruptible capacities. But to calculate the available capacity, we expect that the contracted capacity (used in the calculation) is purely the firm capacity, since the available capacity shows “only” the firm available capacities that will definitely be available to the market. It makes no sense from our perspective to publish available interruptible capacity because this may change very often with regard to the usage of the storage facility and because it depends on the decisions taken by SSOs and their willingness to risk interruption.
In that case, a negative value of the available capacities could only appear if the firm capacities are oversold. Please confirm.
In the Agency’s view the stakeholder is describing two possible options:
Option 1 - Available interruptible capacity is NOT offered by the SSO to the market in which case the following calculation applies:
Contracted capacity = sold firm + sold interruptible capacity
Available capacity = technical capacity – contracted (only sold firm) capacity
In this case the available capacity cannot be negative. It can be ≥ 0.
Option 2 - Available interruptible capacity is offered by the SSO to the market in which case the following calculation applies::
Contracted capacity = sold firm + sold interruptible capacity
Available capacity = technical capacity – contracted (sold firm + sold interruptible) capacity.
In this case the available capacity can be negative. It can be ≤ 0.
Directive 2009/73/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in natural gas and repealing Directive 2003/55/EC (Gas Directive)
Regulation (EC) No 715/2009 of the European Parliament and of the Council of 13 July 2009 on the conditions for access to the natural gas transmission networks and repealing Regulation (EC) No 1775/2005 (Gas Regulation)
ACER Report of 5 April 2019 on the conditionalities stipulated in contracts for standard capacity products for firm capacity
Study on the conditionalities stipulated in contracts for standard capacity products for firm capacity sold by gas TSOs, Final Study, Grant Thornton Tax and Business Advisory Solutions SA., in association with REF-E SRL, VIS Economic & Energy Consultants Consulting Services S.A., Grant Thornton Advisory, Baringa Partners LLP, 3 April 2019