Implementation of European codes
Snam is one of the partners of PRISMA, the international project involving the participation of 31 European gas transportation operators from 12 countries. PRISMA’s goal is to promote the harmonisation of rules for accessing and providing services, and to facilitate the creation of a single market for natural gas in Europe by offering transportation capacity through a single, shared IT platform.
Through PRISMA, since September Snam has offered users the ability to exchange secondary capacity among them (the Secondary Market), and to surrender capacity to the Shipper (the Surrender) at the network’s interconnection points with foreign transportation systems. Since November, Snam has assigned transportation capacity to gas system users at all points of entry and departure from the transportation network interconnected with foreign gas pipelines through an auction mechanism that follows the timing of the shared European calendar set by ENTSOG.
In keeping with European regulations, users may reserve monthly, quarterly or annual capacity in unbundled form, meaning only coming into or leaving the Italian transportation system, or in bundled form, i.e., by simultaneously buying capacity from Snam and the operator interconnected to the same exchange point. This initiative is a part of the shared project at the European level to harmonise rules which calls for offering daily transportation capacity through a day-ahead auction mechanism.
New European codes for regulating exchanges
In order to create a European gas market characterised by liquidity, flexibility and secure procurements, the European Community is establishing a set of rules that will have an impact on operators’ activities.
Capacity Allocation Mechanism (CAM) – The European code for capacity allocation (EU Regulation 984/2013), which is to be implemented on 1 November 2015, governs the supply of monthly capacity products on an auction basis, and later products with longer deadlines (quarterly, annual and multi-year) as well as the marketing of intra-day (within-day) products. In addition to standard (unbundled) capacity, meaning only coming into or leaving the Italian transportation system, the Code also provides for the sale of bundled capacity, i.e., on a joint basis between operators who are upstream or downstream from the same interconnection point with foreign suppliers.
Congestion Management Procedure (CMP) – These are procedures for the management of contract congestion (EU Regulation 715/2009). Their implementation was initiated in 2013 on oversubscription (offering more capacity than what is available), repurchase (in the event of physical congestion) and capacity surrender (surrender of capacity so it can be reassigned) mechanisms.
Balancing Network Code – This is the European code governing the balancing of gas in transportation networks (EU Regulation 312/2014), the application of which is scheduled for 1 October 2015. The code includes rules for operational balancing, the appointment and re-appointment of gas transportation programmes (which will later be hourly), the management of imbalances and information to be provided to operators enabling the balancing of positions.
Interoperability Network Code – This is the code, which is to be enacted in the first four months of 2016, that will regulate matters concerning exchanges at cross-border interconnection points (units of measure, gas quality, odorisation and data exchange).
Tariff Network Code - This is the European Tariff Code, which is to be implemented between October 2017 and October 2019, which will cover matters such as cost allocation, tariff methodologies, revenue guarantee mechanisms and reserve prices.