Commission Regulation (EU) No 312/2014Show full title

CHAPTER III U.K. OPERATIONAL BALANCING

Article 6 U.K. General provisions

1. The transmission system operator shall undertake balancing actions in order to:

(a) maintain the transmission network within its operational limits;

(b) achieve an end of day linepack position in the transmission network different from the one anticipated on the basis of expected inputs and off-takes for that gas day, consistent with economic and efficient operation of the transmission network.

2. While undertaking balancing actions the transmission system operator shall consider at least the following in respect of the balancing zone:

(a) the transmission system operator’s own estimates of demand of gas over and within the gas day for which the balancing action(s) is (are) considered;

(b) nomination and allocation information and measured gas flows;

(c) gas pressures throughout the transmission network(s).

3. The transmission system operator shall undertake balancing actions through:

(a) purchase and sale of short term standardised products on a trading platform; and/or

(b) the use of balancing services.

4. While undertaking balancing actions the transmission system operator shall take into account the following principles:

(a) the balancing actions shall be undertaken on a non-discriminatory basis;

(b) the balancing actions shall have regard to any obligation upon transmission system operators to operate an economic and efficient transmission network.

Article 7 U.K. Short term standardised products

1. The short term standardised products shall be traded for delivery on a within day or day ahead basis seven days a week in accordance with the applicable rules of the trading platform as defined between the trading platform operator and the transmission system operator.

2. The originating trading participant is the trading participant that posts a bid or an offer to trade on the trading platform and the accepting trading participant is the trading participant that accepts it.

3. Where a title product is traded:

(a) one trading participant makes an acquiring trade notification and the other makes a disposing trade notification;

(b) both trade notifications shall specify the gas quantity transferred from the trading participant who makes a disposing trade notification to the trading participant who makes an acquiring trade notification;

(c) where an hourly notification quantity is used, it shall be applied flat to all the remaining hours of the gas day from a specified start time and shall be equal to zero for all the hours before this start time.

4. Where a locational product is traded:

(a) the transmission system operator shall determine the relevant entry and exit points or groups thereof that can be used;

(b) all the conditions specified in paragraph 3 shall be fulfilled;

(c) the originating trading participant shall modify the quantity of gas to be delivered to or off-taken from the transmission network at the specified entry or exit point by an amount equal to the notification quantity and provide evidence to the transmission system operator that the quantity was modified accordingly;

5. Where a temporal product is traded:

(a) the conditions specified in paragraph 3(a) and (b) shall be fulfilled;

(b) an hourly notification quantity shall be applied to the hours of the gas day from a specified start time up to a specified end time and shall be equal to zero for all the hours before the start time and zero for all the hours after the end time.

6. Where a temporal locational product is traded, the conditions specified in paragraph 4(a), and (c) and paragraph 5 shall be fulfilled.

7. When establishing the short term standardised products, the transmission system operators [F1 must cooperate with each other and must endeavour to cooperate with non-UK TSOs] from adjacent balancing zones F2 ... in order to determine the relevant products. Each transmission system operator shall inform the relevant trading platform operators of the result of such cooperation without undue delay.

Textual Amendments

F1 Words in Art. 7(7) inserted (31.12.2020) by The Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/531), reg. 1(2), Sch. 2 para. 4(2); 2020 c. 1, Sch. 5 para. 1(1)

F2 Words in Art. 7(7) omitted (31.12.2020) by virtue of The Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/531), reg. 1(2), Sch. 2 para. 4(3); 2020 c. 1, Sch. 5 para. 1(1)

Article 8 U.K. Balancing services

1. The transmission system operator is entitled to procure balancing services for those situations in which short term standardised products will not or are not likely to provide the response necessary to keep the transmission network within its operational limits or in the absence of liquidity of trade in short term standardised products.

2. For the purpose of undertaking balancing actions through the use of balancing services, the transmission system operator when procuring these balancing services shall consider at least the following:

(a) how balancing services will keep the transmission network within its operational limits;

(b) the response time of the balancing services compared to the response times of any available short term standardised products;

(c) the estimated cost of the procurement and use of balancing services compared to the estimated cost of use of any available short term standardised products;

(d) the area at which the gas needs to be delivered;

(e) the transmission system operator’s gas quality requirements;

(f) to what extent the procurement and use of balancing services may affect the liquidity of the short term wholesale gas market.

3. Balancing services shall be procured in a market-based manner, through a transparent and non-discriminatory public tender procedure in accordance with the applicable national rules, in particular:

(a) prior to any commitment to contract for a balancing service, the transmission system operator shall publish a non-restrictive call for tender indicating the purpose, scope and related instructions to tenderers, to enable them to participate in the tender process;

(b) the results shall be published without prejudice to the protection of commercially sensitive information and individual results shall be disclosed to each tenderer.

4. Under specific circumstances a transparent and non-discriminatory procedure other than a public tender may be approved by the national regulatory authority.

5. Unless a decision by the national regulatory authority allows for a longer duration of a balancing service, the duration of a balancing service shall not exceed one year and the starting date shall occur within a twelve month period from the related binding commitment of the contracting parties.

6. The transmission system operator shall review the use of its balancing services annually in order to assess whether available short term standardised products would better meet the transmission system operator’s operational requirements and whether the use of balancing services could be reduced for the next year.

7. The transmission system operator shall publish annually the information with regard to the balancing services procured and the related costs incurred.

Article 9 U.K. Merit order

1. Subject to the principles set out in Article 6(4), when deciding upon the appropriate balancing actions, the transmission system operator, shall:

(a) prioritise the use of title products where and to the extent appropriate over any other available short term standardised products.

(b) use the other short term standardised products when the following circumstances are met:

(1)

locational products when, in order to keep the transmission network within its operational limits, gas flow changes are needed at specific entry and/or exit points and/or to start from a specific period of time within the gas day.

(2)

temporal products when, in order to keep the transmission network within its operational limits, gas flow changes are needed within a specific period of time within the gas day. The transmission system operator shall only use a temporal product when it would be more economic and efficient than the purchase and sale of a combination of title products or locational products.

(3)

temporal locational products when, in order to keep the transmission network within its operational limits, gas flow changes are needed at specific entry and/or exit points and within a specific period of time within the gas day. The transmission system operator shall only use a temporal locational product when it would be more economic and efficient than the purchase and sale of a combination of locational products.

(c) only use balancing services where short term standardised products will not or are not likely to provide, upon assessment of the transmission system operator concerned, the response necessary to keep the transmission network within its operational limits.

The transmission system operator shall take into account cost-efficiency within the respective levels of the merit order referred to under (a)-(c).

2. While trading in short term standardised products, the transmission system operator shall prioritise the use of within day products over day ahead products where and to the extent appropriate.

3. The transmission system operator may seek approval from the national regulatory authority to trade within an adjacent balancing zone, and have the gas transported to and from this balancing zone, as an alternative to trading title products and/or locational products in its own balancing zone(s). When deciding on granting the approval, the national regulatory authority may consider alternative solutions to improve the functioning of the domestic market. The applicable terms and conditions shall be reconsidered on an annual basis by the transmission system operator and the national regulatory authority. The use of this balancing action shall not limit the access to and use by the network users of capacity at the interconnection point concerned.

4. The transmission system operator shall publish on a yearly basis the information with regard to the costs, frequency and quantity of the balancing actions undertaken in accordance with each of the requirements set out in paragraph 1 and of the balancing actions undertaken in accordance with paragraph 3.

Article 10 U.K. Trading platform

1. For the purpose of procurement of short term standardised products, the transmission system operator shall trade on a trading platform that meets all of the following criteria:

(a) provides sufficient support throughout the gas day to both the network users to trade in and the transmission system operators to undertake appropriate balancing actions through trade in the relevant short term standardised products;

(b) provides transparent and non-discriminatory access;

(c) provides services on an equal treatment basis;

(d) ensures anonymous trading at least until a transaction is concluded;

(e) provides a detailed overview of the current bids and offers to all trading participants;

(f) ensures that all trades are duly notified to the transmission system operator.

2. The transmission system operator shall endeavour to ensure that the criteria set out in paragraph 1 are met on at least one trading platform. Where the transmission system operator has been unable to ensure that these criteria are met on at least one trading platform it shall take the necessary measures towards the establishment of a balancing platform or a joint balancing platform as set out in Article 47.

3. After each trade is concluded, the trading platform operator shall make available to the trading participants sufficient details to confirm the trade.

4. The trading participant shall be responsible for submitting trade notification to the transmission system operator as defined in Article 5 unless the responsibility is assigned to the trading platform operator or a third party in accordance with the applicable rules of the trading platform.

5. The trading platform operator shall:

(a) publish the evolution of the marginal buy price and the marginal sell price after each trade without undue delay; or

(b) provide the transmission system operator with the information where the transmission system operator elects to publish the evolution of the marginal buy price and the marginal sell price. The transmission system operator shall publish this information without undue delay.

Where there is more than one trading platform operator in the same balancing zone point (b) shall apply.

6. The trading platform operator shall only allow network users to trade on its trading platform if they are entitled to make trade notifications.

7. The transmission system operator shall without undue delay inform the trading platform operator of network user’s losing the right to make trade notifications pursuant to the applicable contractual arrangement in force which shall result in the suspension of the network user’s right to trade on the trading platform, without prejudice to the other remedies that could be available in such case to the trading platform operator under the applicable rules of the trading platform.

Article 11 U.K. Incentives

1. With the view to foster the liquidity of the short term wholesale gas market, the national regulatory authority can incentivise the transmission system operator to undertake balancing actions efficiently or to maximise the undertaking of balancing actions through the trade in short term standardised products.

2. The transmission system operator may submit for approval to the national regulatory authority an incentive mechanism that shall be consistent with the general principles set out in this Regulation.

3. Prior to submitting the proposal referred to in paragraph 2, the transmission system operator may consult stakeholders upon the transmission system operator’s own initiative or upon the national regulatory authority’s request.

4. The incentive mechanism shall:

(a) be based on the transmission system operator’s performance via capped payments to the transmission system operator for outperformance and by the transmission system operator for underperformance, that are measured against predetermined performance targets which may include, inter alia, costs targets;

(b) take into account the means available to the transmission system operator to control the performance;

(c) ensure that its application accurately reflects the allocation of responsibilities between the parties involved;

(d) be adapted to the state of development of the relevant gas market where it is to be implemented;

(e) be subject to a regular review by the national regulatory authority in close cooperation with the transmission system operator to evaluate where and to what extent changes thereto may be needed.