Gas regional initiative north west region balancing workstream workstream leader cemil altin ofgem
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Gas Regional Initiative North West Region Balancing workstream Workstream leader: Cemil Altin (Ofgem). Background. North West region identified gas balancing as a priority area of work

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Gas regional initiative north west region balancing workstream workstream leader cemil altin ofgem

Gas Regional InitiativeNorth West RegionBalancing workstreamWorkstream leader: Cemil Altin (Ofgem)


  • North West region identified gas balancing as a priority area of work

  • The North West RCC issued a questionnaire to market participants on gas balancing in November. Also published on ERGEG website

  • ERGEG also published its final guidelines for good practice for gas balancing (GGPGB) in December after open/transparent consultation – sets out guidance to NRAs/TSOs on design of gas balancing mechanisms

  • 18 responses were received to the North West RCC gas balancing questionnaire. All non-confidential responses are on ERGEG website

  • A “facilitation paper” for this session has been prepared and circulated by the RCC alongside a “data appendix”

Purpose of this session
Purpose of this session

  • Discuss the responses to the questionnaire

  • Discuss the key issues that arise

  • Discuss what the possible next steps should be

  • Important opportunity for all stakeholders to express their views

The questionnaire and responses
The questionnaire and responses

  • Responses received from TSOs, shippers and traders

  • Respondents were asked to identify for interconnection points that they use issues associated with interaction between gas balancing mechanisms:

    • Balancing periods

    • Nomination/re-nomination regimes

    • The way allocations are derived

    • How imbalances are calculated

    • Tolerance levels and services offered

    • Market mechanisms in place for balancing

    • The information provided either side of the connection point

  • Respondents asked to rate difficulty caused by the issue (from 1 for “not difficult” to 5 for “extremely difficult”)

  • The questionnaire and responses1
    The questionnaire and responses

    • A number of respondents did not provide ratings in all instances or different figures for the same issues depending on the interconnection point

    • Table below summarises scores given by respondents

    Some observations on the responses
    Some observations on the responses

    • A significant number of the problems identified by respondents appear to relate to operation of gas balancing mechanism within a specific country rather interaction between mechanisms e.g.:

      • The way allocations are derived

      • The way imbalance prices are calculated and/or lack of liquid, market based mechanisms

  • Some problems were identified in the interaction between “networks” e.g.:

    • Differences in nomination/re-nomination arrangements between National Grid & IUK can lead to missed trading opportunities & reduced liquidity

  • Some problems were also identified with the interaction between networks within a particular country e.g.:

    • Differing tolerance levels in Netherlands

    • Different arrangements across Germany

  • There are differences in the level, way and frequency of information provision between connected systems – this appears to give rise to problems of risk management/ability to take effective balancing actions/could give lead to barriers to entry

  • Some themes and questions
    Some themes and questions


    • There are some distortions and complexities caused by the way balancing mechanisms interact

    • There are problems in managing risk effectively and efficiently in some gas balancing mechanisms

    • There are differences in the level, scope, method of information provision between gas balancing mechanisms

    Some themes and questions1
    Some themes and questions


    • What are the key areas of interaction between gas balancing mechanisms?

    • How do these interactions impact on the ability of market participants to manage risk?

    • Do these interactions lead to barriers to entry/trade?

    • Do any barriers impinge disproportionally on smaller players?

    • What can be done to manage the interactions more effectively?

    • What could be done to improve the level, scope, consistency of information provided under balancing mechanisms?

    • Are there any countries in the North West region where the problems of gas balancing are particularly acute?

    • If so, what could be done about them?

    Possible ways forward
    Possible ways forward?

    • For discussion

      • Application of the ERGEG GGPGB – to improve the operation of gas balancing mechanisms within each country

      • Development of information templates for gas balancing – in consultation with stakeholders to improve transparency and therefore ability to manage risk within/across balancing mechanisms

      • Development of 2 case studies on gas balancing interactions – to explore in more detail the interactions between balancing mechanisms

  • Who should do what?

    • RCC

    • IG

    • SG

    • Enabler Group

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