TRANSMISSION ACCESS - INTERCONNECTORS

1
TRANSMISSION ACCESS - INTERCONNECTORS

• Current Arrangements
• Addressing TRs Five Questions
• Implications of TA Vision
• Consideration of European Developments
• Other Comments
• What Interconnectors would want from any Access
  Regime

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Current Arrangements

• Not without issue, but in general
• Treated as a generator and demand and charged the
  same as any other connectee
• Capacity rights are for max capability and for
  duration of project
• Rights are contracted through CUSC and bilaterals
  between Interconnector Owner and NGC and are
  considered firm
• Connection and TNUoS charges made to IOs and
  recharged to Interconnector Users
• BSUoS charges made to IUs directly
• Have also been reasonably and successfully
  adapted under different contract structures since
  1990

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Addressing TRs 5 Questionsunder Current
Arrangements

• Rights are allocated to IO once security
  established, firm for duration of project
  although no absolute surety of price
• IOs could trade those rights in theory and can
  contract on
• Breaching contract terms could ultimately require
  disconnection and termination charges as
  appropriate
• Initially the IO is the contracted party with NGC
  and has the prime contractual responsibility
• NGCs transmission investment driven by needs of
  the customer building the interconnection and the
  need to meet the planning standards. No different
  from other users and prospective users.
• Sufficient information currently available - CUSC
  processes Charge out rules, transparent
  tendering, 7yr Statement

4
Implications/Questions of TA Vision

• Access rights will only be allocated for several
  years. Then? Auctions?
• IOs obtain access rights? One-way or two-way
  rights?
• IUs contract/auction for I/C and Trans. Capacity?
  Are they separable?
• Who and how do you invest in new
  interconnections?
• Possible incorporation of Interconnection assets
  into Transmission? Inter-system trades done at
  mid-point?
• Existing contracts for use of the
  Interconnections? Some have 2 yrs to run, some
  have 30yrs. Explicit duration and rights.
  Compensation?
• Should there be different rules for
  interconnections from rest of system or between
  existing and future ones?
• Is the SO always going to be wanting to buy back
  the rights in the direction most likely to
  aggravate a transmission constraint? Or, will it
  always wait until short term when trades have
  been agreed? Will this be in the energy market or
  the access market?

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Consideration of European Developments

• Interconnections allow Cross Border trading, but
  are regarded as psuedo-generators at the border
• CBT debate likely to lead to fixed or zero charge
  for use of transmission for cross border trades,
  therefore
• Replacing Connection and TNUoS and/or any TA
  regime?
• System to System trading? When? Who? Rights to
  use?
• Use of interconnectors in Europe considered firm
  except when potential loss of demand results.
• Increasing interest in ICRP model in Europe
• Is Interconnection ownership an issue? Conflicts
  of interest?

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Other Comments

• Any present or future interconnection transfer
  could flow disadvantageously wrt the Transmission
  System.
• Interconnection transfers can reverse and if seen
  to be a long term possibility then the system
  could be reinforced accordingly. The judgement
  will be one of constraints costs versus
  investment costs.
• Hence it is important to consider this at the
  investment planning stage this will impact on
  system reinforcement requirements or in level of
  charges.
• Ability should be retained to allow transfers to
  be curtailed to prevent (or in the event of)
  demand disconnection.

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What Interconnectors Want From Any Access Regime

• Entry and Exit Access rights to each system
  agreed to IO for the life of the Interconnection,
  min 25yrs and possibly 40yrs.
• Proper recognition of Two-Way flow and
  Superposition.
• Ability to act as a Trading Unit and a party
  acting as aggregator.
• Equitable treatment of Interconnectors within the
  overall charging regime, reflective of their
  impact on the system.
• Trading opportunities for IUs in all timescales
  are maximised, not frustrated, especially if
  charges are the same as other users.
• Interconnection investment opportunities can be
  realised.
• The ability and option to have firm and non-firm
  access rights.
• The auctioning of Interconnection Capability
  automatically gives rights of access to the
  Transmission System.
• Only pass-thru costs are BSUoS and CBT. Other
  costs are IOs.
• Equitable treatment with rest of Europe.