Operation of the liberalized natural gas market

According to the currently in place national regime, a Supply License issued under the provisions of the 1st Amendment of the Licenses Regulation (Government Gazette B’ 3430/17.08.2018,  M.D. No. 178065/08.08.2018) is required for the supply of natural gas to final customers. All final customers have been rendered Eligible Customers as of January 1st 2018, i.e. they have the right to freely choose their Supplier.
Access to the NNGS for the import and transmission of natural gas requires the registration of every interested party on the NNGS Users Registry as a User of the LNG Facility (LNG User) or of the Transmission System or of both. The Registry in question is kept by RAE and governed by the Users Registry Regulation, while Users may be either Suppliers, or Eligible Customers or Third Parties (any person who can provide sufficient guarantees of financial and technical nature).

In turn, the User is required to sign an Agreement with the TSO (see below Framework Agreement) for the provision of services from the latter party either for the transmission of gas on the Transmission System or LNG gasification from the LNG Facility. The duration of the Agreement is of indefinite term and does not bare cost as long as there is no booking of capacity or transaction on the Virtual Trading Point (VTP). When a System User wishes to book capacity or trade on the VTP he is required before hand to deposit a guarantee, which in the first case is calculated on the basis of reserved capacity, of the booking period (inversely proportional) and in the second case of a fixed amount of 100,000€. The   Standard Framework Natural Gas Transmission Usage Agreement, based on the 4th NNGS Code Revision, has been approved by virtue of  RAE Decision 507/2018 (Government Gazette B’ 2473/27.6.2018) and is in force from the date of publication in the Government Gazette, while for the use of the LNG facility RAE Decision 257/2017 – Government Gazette B’ 1443/27.4.2017 is in force.

 

The User must accordingly book:

• Gasification capacity at Entry Pοint Ag. Triada and transmission Capacity at the exit points of the Transmission System on the basis of the First Come First Served rule, via the Integrated Natural Gas Information System (INGS) of DESFA. The relevant capacities may concern at minimum 1 day and 1 kWh/day and the submission of the booking request is done by 10:00 of the previous day (excluding the daily capacity, which can be booked by 19:00 of the previous day), and

• Transmission capacity at entry points “Sidirokastro” and “Kipi”, which are considered Interconnection Points according to the provisions of Regulation 2017/459/EU, via the auction mechanism through the use of a joint platform -the Regional Booking Platform (RBP), and according to the published ENTSOG auction schedule. The capacity products offered (since the enforcement of the 4th Revision of the NNGS Code ( RAE Decision 123/2018- Government Gazette B’ 788/7.3.2018), are the standardized, based on Regulation 2017/459/EU, annual, quarterly, monthly, daily and within-day products. In addition, daily interruptible capacity products are offered (on both directions of the two points) from the previous day and once the entire firm capacity has been booked.

Concerning the secondary market, the transmission users are able to release/transfer their capacity to another user, having DESFA’s consent at least 2 days prior its execution, as well as to lease their capacity, without prior consent by DESFA (only notification following the lease and within 2 days).

Only Transmission Users have access to the VTP for gas transactions either between them or with the TSO (for balancing gas or for the substitution of gas losses), without the obligation of capacity booking, apart only via a relevant application on DESFA’s INGS.

The following restriction must be followed by LNG Facility Users (provided they hold daily LNG reserve or Additional Storage Area) the gasification capacity of the LNG User must equal: i) at least the minimum gasification capacity of LNG quantities and ii) the total reserved capacity by the Transmission User (whom he services) at Entry Pοint Ag. Triada.

At entry point “Sidirokastro”- since 2014 – the following contractual congestion management procedures (according to Regulation 2009/715/EC-CMP) are in place: a) Return of capacity to DESFA, b) long-term release of unused capacity, and c) procedure of overbooking capacity and its re-purchase.

By virtue of the 4th Revision of the NNGS Code the operation of the Balancing Platform is established, where the TSO carries out auctions for the sale and purchase of short-term standard products for the balancing of the NNGS. In case of lack of these products and in order to maintain balancing of the System, DESFA is able to use balancing services by purchasing LNG from Revithoussa via auction. Every system user is responsible for balancing its position on the NNGS (including the VTP) by taking any necessary measure and in the case where the imbalance supersedes the allowed tolerance limits (which since 1/1/2019 were set to zero), deviation charges are applied. In order to minimize these charges, the Users are able to balance their positions via the aforementioned Platform by selling/buying of gas. DESFA is obligated at the end of the year to remain neutral in terms of charges/credits that derive from the balancing process.

The Users’ LNG Facility and Transmission System charges (on a firm and interruptible basis) are calculated by the Operator in accordance with the regulated tariffs approved by RAE (RAE Decision 997/2017 (Government Gazette B’ 4737/2017.29.12.2017), according to the Tariff Regulation (RAE Dec. 644/2018 (Government Gazette Β’ 3000/25.07.2018) and corrective, as per the correction of faults, issue of Government Gazette Β’ 3892/07.09.2018 on a long term (≥365 days) and/or on a short term basis (from 1-364 days). Such charges for every point of the system consist of a capacity charge (on the basis of the capacities booked), and an energy charge (on the basis of allocated quantities). Different charges are applied for each System point, according to the Zone it belongs (today there are 3 Zones, the North-East, the North and the South). For interruptible capacity, the firm capacity charges are applied, with a discount on the basis of the possibility for interruption.

However, from January 2020 onward, the provisions of the 4th Revision of the NNGS Tariff Regulation (RAE Dec. 539/2019 (Government Gazette Β’ 2601/28.06.2019)  will be enforced, according to Regulation 2017/460/EU and the relevant tariffs approved by virtue of RAE Dec. 566/2019 (Government Gazette Β’ 2724/2.07.2019), based on which a cluster of entry points is created (Sidirokastro and Kipi), two system exit zones (North and South) are developed, and the recovery of the Required Revenue for Transmission Services by 50% from Entry Points and 50% from Exit Points is enforced (from the existing 80/20 split between Exit and Entry Points in place).
DEPA, taking into consideration the regulatory framework, provides its customers with the possibility of a natural gas supply agreement which does not include transmission services (unbundled supply contract).

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