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

CHAPTER V U.K. DAILY IMBALANCE CHARGES

Article 19 U.K. General provisions

1. Network users shall be bound to pay or be entitled to receive (as appropriate) daily imbalance charges in relation to their daily imbalance quantity for each gas day.

2. Daily imbalance charges shall be identified separately on the transmission system operator’s invoices to network users.

3. The daily imbalance charge shall be cost reflective and shall take account of the prices associated with transmission system operator’s balancing actions, if any, and of the small adjustment referred to in Article 22(6).

Article 20 U.K. Daily imbalance charge calculation methodology

1. The transmission system operator shall submit the daily imbalance charge calculation methodology to be applied in its balancing zone to the national regulatory authority for approval.

2. Once approved, the daily imbalance charge calculation methodology shall be published on the relevant website. Any update thereof shall be published in a timely manner.

3. The daily imbalance charge calculation methodology shall define:

(a) the calculation of the daily imbalance quantity referred to in Article 21;

(b) the derivation of the applicable price referred to in Article 22; and

(c) any other necessary parameter.

Article 21 U.K. Daily imbalance quantity calculation

1. The transmission system operator shall calculate a daily imbalance quantity for each network user’s balancing portfolio for each gas day in accordance with the following formula:

daily imbalance quantity = inputs – off-takes

2. The daily imbalance quantity calculation shall be adapted accordingly where:

(a) a linepack flexibility service is offered; and/or

(b) any arrangement is in place whereby network users provide gas, including gas in kind, to cover:

(i)

gas unaccounted for as off taken from the system, such as losses, metering errors; and/or

(ii)

gas used by the transmission system operator for the operation of the system, such as fuel gas

3. Where the sum of a network user’s inputs for the gas day is equal to the sum of its off-takes for this gas day, a network user is deemed balanced for this gas day.

4. Where the sum of a network user’s inputs for the gas day is not equal to the sum of its off-takes for this gas day, a network user is deemed imbalanced for this gas day and daily imbalance charges shall be applied in accordance with Article 23.

5. The transmission system operator shall provide a network user with its initial and its final daily imbalance quantities in accordance with Article 37.

6. The daily imbalance charge shall be based on the final daily imbalance quantity.

Article 22 U.K. Applicable price

1. For the purpose of daily imbalance charge calculation as provided in Article 23 the applicable price shall be determined as follows:

(a) marginal sell price where the daily imbalance quantity is positive (i.e. the network user’s inputs for that gas day exceed its off-takes for that gas day); or

(b) marginal buy price where the daily imbalance quantity is negative (i.e. the network user’s off-takes for that gas day exceed its inputs for that gas day).

2. A marginal sell price and a marginal buy price shall be calculated for each gas day pursuant to the following:

(a) a marginal sell price is the lower of:

(i)

the lowest price of any sales of title products in which the transmission system operator is involved in respect of the gas day; or

(ii)

the weighted average price of gas in respect of that gas day, minus a small adjustment.

(b) a marginal buy price is the higher of:

(i)

the highest price of any purchases of title products in which the transmission system operator is involved in respect of the gas day; or

(ii)

the weighted average price of gas in respect of that gas day, plus a small adjustment.

3. For the purpose of determining the marginal sell price, the marginal buy price and the weighted average price, the related trades shall be made on trading platforms that are pre-identified by the transmission system operator and approved by the national regulatory authority. The weighted average price shall be the energy weighted average price of trades in title products carried out at the virtual trading point in respect of a gas day.

4. A default rule shall be defined in case paragraph 2(a) and (b) do not allow for the derivation of a marginal sell price and/or a marginal buy price.

5. Subject to the approval of the national regulatory authority, the price of locational products may be taken into account for the purpose of determining the marginal sell price, the marginal buy price and the weighted average price, where proposed by the transmission system operator with corresponding consideration of the extent of the transmission system operator’s use of locational products.

6. The small adjustment shall:

(a) incentivise network users to balance their inputs and off-takes;

(b) be designed and applied in a non-discriminatory manner in order to:

(i)

not deter market entry;

(ii)

not impede the development of competitive markets;

(c) not have a detrimental impact on cross-border trade;

(d) not result in network users’ excessive financial exposure to daily imbalance charges.

7. The value of the small adjustment may differ for determining the marginal buy price and the marginal sell price. The value of the small adjustment shall not exceed ten percent of the weighted average price unless the transmission system operator concerned can justify otherwise to the national regulatory authority and have it approved pursuant to Article 20.

Article 23 U.K. Daily imbalance charge

1. To calculate daily imbalance charges for each network user, the transmission system operator shall multiply a network user’s daily imbalance quantity by the applicable price determined in accordance with Article 22.

2. Daily imbalance charges shall be applied as follows:

(a) if a network user’s daily imbalance quantity for the gas day is positive then this network user shall be deemed to have sold gas to the transmission system operator equivalent to the daily imbalance quantity and therefore shall be entitled to receive a credit in respect of daily imbalance charges from the transmission system operator; and

(b) if a network user’s daily imbalance quantity for the gas day is negative then this network user shall be deemed to have purchased gas from the transmission system operator equivalent to the daily imbalance quantity and therefore shall be obliged to pay daily imbalance charges to the transmission system operator.