GDF SUEZ

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Balancing WorkshopImbalance settlement in the EU
a barrier to trade and competitionBrussels,
3rd April 2009
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Balancing system barriers (1/3)

• Too much complexity
• Multiple balancing zones within a TSO system and
  / or
• Multiple tolerances rules within a zone and / or
• Multiple rules and / or unclear rules to
  interpret
• Effects
• Barrier to new comers and / or small companies
• IT complexity to manage and finance
• Loss of opportunities to swell ones imbalances
  on a lager scale
• The more complex the balancing system is, the
  more it costs to the shippers to manage it.

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Balancing system barriers (2/3)

• Too much
• Constraints
• Penalizations
• Responsibility supported only by shippers
• Minimum needs to accept high level of constraints
• Alert to be expressly given by the TSO to the
  concerned shipper
• Relevant and reliable allocations
• Possibility to correct its position afterwards
  when not properly guided within day
• The higher penalties are, the more efficient
  TSOs system must be to help its shippers.

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Balancing system barriers (3/3)

• Too much
• Modifications of balancing system rules
• Too often
• Too specific evolutions
• Not even speaking of prices / penalties,
  imbalance settlement costs if it is not properly
  anticipated
• Large communication between all market players
• Needed time to prepare the integration of the new
  system on IT point of view
• Seeing to avoid too specific rules
• Evolution is desirable, not at any cost, guided
  by European best practices already in place in a
  truthful concern for harmonization.

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Elements in favour of liquidity and flexibility
circulation (1/3)

• Harmonized rules
• National specificities (legal aspects, physical
  possibilities) but TSOs cooperation (OBAs)
  opportunity
• Harmonized balancing period
• Most largely practised daily balancing system
• Best preferred daily balancing system
• Hourly balancing and / or no possibility to
  correct ones imbalances in the past acceptable
  only if reliable information available (see
  Minimum needs)
• Reasonable or no-notice tolerances
• Need to accept eventual IT and / or human
  deficiencies from all market players
• 2 plain hours for renomination minimal
  flexibility to be given to the shippers for this
  operational constraint from TSOs

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Elements in favour of liquidity and flexibility
circulation (2/3)

• Transparent cost of flexibility
• Flexibility service to buy
• Sale/purchase at sufficient penalty (no arbitrage
  use)
• Not to debate on which approach is better than
  the other, what is at stake is to be clear on the
  principles
• Transparency of costs yearly evaluation by
  shippers and NRAs
• Why is the flexibility service at a certain level
  of price?
• Why the balance system is based on an approach or
  the other?
• Why a reference is chosen and not another?
• Is every shipper under the same rules?

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Elements in favour of liquidity and flexibility
circulation (3/3)

• Easeegas CBPs implementation
• Operational rules at interconnection point Same
  rules for every market players
• Transparent rules and prices
• Allocation equals to nomination on a larger scale
• IT standards for communication between one
  another

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Thank you for your attentionContact details
Charlotte BESNIERGDF SUEZ Global Gaz
LNGE-mail charlotte.besnier_at_gdfsuez.com
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