ERGEG Regional Initiative Region
South-South East
4th Stakeholder Group meeting
Italian Balancing Point TF
How to create regional markets
for balancing in practice
Athens 10 June 2008
1
How to create regional markets for balancing
in practice
The development of hub as Balancing points has been identified
by ERGEG as one of the “KEY objective” of the SSE Regional
Initiative
The IBP TF recognized that implementation of a balancing market
would positively impact the functioning of the overall gas market
The balancing market mechanism contributes to improve the
liquidity of the hub and the trading of gas
2
Create regional markets for balancing in practice
The TF point of view
In principle the balancing point should have a regional
extention
In practice however the SSE regional market lacks:
- an harmonized business environment
- a well meshed gas grid
- adequate available interconnection capacities
Two/three balancing points in the SSE region
is a more realistic objective
3
Create regional markets for balancing in practice
The TF point of view
 As a first step develop
two/three hubs in
the region acting as
balancing points for
their reference area.
 In the longer term the
local balancing
points could evolve
to a regional
dimension.
4
Focus on the Italian Balancing Point
The IBP Activity
 Workshop with the Italian Association
Regioni italiane of Energy Traders (Aiget) November 2007
 Meeting with the Regulatory Authority
- December 2007
- March 2008
 Meeting with the Italian Transmission
Operator (SRG)
- January 2008
 Meetings with the main Network Users
5
A balancing point for the Italian gas market
IBP TF Preferred features





Daily balancing mechanism: higher guarantee for operators with
small portfolio; easier to manage
Independent Market Operator
Anonymous exchanges
Clearing price published ex-post
Tolerance level: fixed or decreasing with the amount of demand

Ex-post trading: as long as the market is not well-functioning and
liquid

Back-up back-down services provided by the market
Giorno Gas G – 1
Giorno Gas G
Settlement (15 m+1)
Bilancio
Commerciale
Definitivo
Bilancio
Commerciale
Provvisorio
Bilanciamento
a Stoccaggio (*)/IBP
• Ex post Trading
Nuove posizioni
Shipper su IBP
•Tolerance Level
•…
 ACQ/VEN
NDM (°)
DM
Non Daily
Metered
Daily
Metered
h. 18
Pubblicazione Scambi + Esiti
IBP-intraday Market
Prezzo Medio
IBP
Pay as Bid
Determinazione
Corrispettivi
Sbilanciamento
Recupero costi TSO
Italian Balancing Point
INTRADAY MARKET
AltraWeb, SAMPEI, Polaris…
h. 12
Scambi su
Scambi su
piattaforme
Scambi su
piattaforme
relativi
a
piattaforme
relativi
a
Giorno
Grelativi
a
Giorno G
Giorno G
h. 13
comunicazione progr
trasporto e stock
Posizione
Shipper
su IBP-intraday MKT
• Consentiti scambi tra operatori
Giorno G
h. 12
registrazione
accordi PSV
x Giorno G
fino alle h. 18
offerte Acquisto/Vendita
•…
Note
(°) Eventualmente aggregati per profilo di prelievo [da verificare a quale livello
territoriale aggregabili: nazionale, area di prelievo, cabina…]
(*) In alternativa è possibile prevedere l’applicazione di corrispettivi di sbilanciamento
differenziati, meno “severi” per gli NDM
Fatturazione
sbilanciamenti
Focus on the Italian Balancing Point
Concret Developments
April 2008 First Consultation Document on “Potential Evolution of
the Balancing Service in the Natural Gas Market” (DCO 10/08)
Main topics proposed for discussion:
- Length of the Relevant Period
- Balancing responsibility
- Balancing Market Operation
- Imbalance Charges
Next steps:

Consultation Document on a Gas Exchange

Second Consultation Document on the Gas Balancing Market
8
Consultation Document on the Italian Balancing Market
Topics under discussion
Length of the Relevant Period
Choice of daily or hourly period taking into account:



Availability of info or of hedging possibilities on shippers
imbalance position over the relevant period
Possibility for gradual implementation of hourly balancing
limited to main inputs and offtakes
Harmonisation at international level needed
The Cons Doc suggests the need for a C-B analysis
Recommendation: “It is important that network users are not
exposed to undue risks that they cannot manage
effectively and/or without incurring inefficient costs
that could create barriers to entry to the market”
(GGPGB 1.9)
9
Consultation Document on the Italian Balancing Market
Topics under discussion
Balancing Responsibility
Snam Rete Gas responsible for dispatching and residual
gas balancing – buys gas from market
Centralised platform for gas balancing offers
Independent Balancing Market Operator (open)



Imbalance charges

Cost Reflective

Promote shippers efficent behaviour
10
Consultation Document on the Italian Balancing Market
Topics under discussion
Operation of the Balancing Market

Shipper offer “balancing gas” (day a-head)

Criteria for selection of offers

Price for selected offers
Recommendation: “In the absence of a well functioning/liquid within day
market, allowing market participants to manage their
imbalance positions efficiently, the TSO should have or
should allow systems to be put in place to facilitate the
pooling and trading of imbalance positions.” (GGPGB
1.18)
11
How to create regional markets for balancing in practice




Create two-three active balancing points in the southsouth east region
Given the present actual possibilities for short term gas
trading, the points should be based on compatible
balancing regimes (fully harmonised in perspective)
Attention should be paid that regimes evolves with
increasing short term trading possibilities
The proposal for the Italian Balancing Market is in line with
the above requirements
12