On September 5, ANRE approved new modifications and brought completions to the Network Code for the National Gas Transmission System. They contribute to the alignment with the European regulations in the field (EU Regulations 312/2014 and 715/2009), the Authority points out in a press release posted on the website www.anre.ro. Most of the provisions relate to the “Natural Gas Balancing Market”, which will replace the mechanism for trading imbalances through the Gas Transmission Facility (FTG).

Where we come from

Until 2016, the monthly balance for each of the participants in the natural gas market was made after the end of the month of delivery, within about 15 days. On the basis of nominations, the natural gas producers launched their entire quantity in the national transport system (NTS), and if there were volumes extracted from warehouses or imported, they also entered the system on the same basis. After the end of the month, within a period of 15 days, Transgaz communicated to the market participants what consumption each had, from what type of gas, and it sent them a monthly balance for the interval. This was the basis for payments and settlements for all market participants.

As of December 1, 2016, the Network Code has been modified to the effect that deliveries must be closed on a daily basis. “Thus, Transgaz has not issued that monthly balance anymore, and we have remained with unclear papers for months; although each of us knew the volumes it had, but not the differences, which have later been called ‘imbalances’, and received different treatment”, explained Vasile Ciolpan, Director of Energy Trading Department in Romgaz, answering a question from energynomics.ro.

The temporary solution must be dropped

Meanwhile, temporary solutions have been found for daily imbalances, among them the Gas Transmission Facility, which is currently in practice.

“Since 1 October, there is an intention that this facility will no longer exist, since Regulation no. 312/2014 establishing a network code for the balancing of gas transport networks asks that imbalances to be eliminate within the consumption timeframe”, Ciolpan said. “It has not yet been decided by which methods we will meet this requirement. We are going to find solutions; is a concern for all market participants, because we all suffer an impact every day”, Ciolpan said.

At present, the Day Ahead Market (DAM) platforms are operational at OPCOM and RCE. Romgaz official pointed out, however, that “DAM means a deal for tomorrow, and tomorrow’s imbalances will not be known until the day after tomorrow, so you cannot trade it today!” This way of extinguishing imbalances – through a transaction on the DAM market, which is post, is obviously a solution that takes place only after the day of consumption, after the consumption period, and this does not meet the requirements of the European regulation, says director Romgaz.

The market has to accept any new mechanisms

That is why ANRE proposes that Transgaz be the part responsible with balancing; the system operator should buy and sell the needed quantities each day, in order to meet short term fluctuations in gas demand or supply, and inform network users.

By the newly adopted Order (167/2018), the Authority introduced “the Transmission System Operator’s incentive mechanism […] which involves the active involvement of TSO in the trading of standardized short-term products and remuneration or penalty, as the case may be, on the basis of the performance gained from the balancing activity of the NTS”. Transgaz does not yet have a functional model of this mechanism, and if this solution is to be maintained, it can only be implemented in the future.

What is most difficult at present, according to Ciolpan, is that for the Q4 of 2018,”ANRE says “no way to continue with the FTG’, while Transgaz would prefer to prolong their usage to have a way [to eliminate imbalances]”.

It remains the option to use the day ahead platforms, DAM, which allow a balance to be made, not monthly, as it was the case before 2016, but daily, with data communicated the next day. “But even this data will not be final, because Transgaz can only communicate provisional data on imbalances, and then other regularization is also needed,” Vasile Ciolpan explained.

What solutions will be found remains to be seen. “Everyone is trying to propose something, but this must also be accepted by the market,” concluded the expert.