ACER finds still contractual congestion in European Gas Networks

Contractual congestion, a situation where firm capacity demand exceeds the technical capacity, has been detected at 17% of the entry and exit sides at interconnection points (IPs) across the EU. The Agency’s Annual Congestion Report includes a list specifying at which interconnection points the so-called Firm Day-Ahead Use-It-Or-Lose-It (FDA UIOLI) mechanism will have to be applied as a congestion management procedure (CMP) from 1 July 2016.

The report analyses data from ENTSOG’s Transparency Platform (TP) from 2015 to 2017, as well as 2015 auction data from the 3 capacity booking platforms (PRISMA, RBP, GSA).

ACER’s main findings

• How much congestion? Contractual congestion was identified at 41 IP sides, out of which 20 had already been found congested in the previous report. Congestion was mainly triggered by the non-offer of firm capacity products with a duration of at least one month; while in some cases it was triggered by the occurrence of auction premia.

• Where? Contractual congestion was found at some borders all across the EU, although in the North-West region congestion is mitigated by active secondary trading and CMP application resulting in firm day-ahead capacity offers.

• Is there progress? Congestion Management Procedures are increasingly applied at IPs in the EU. Together with the use of interruptible capacity and secondary capacity trading, contractual congestion was alleviated in some cases, as also confirmed by the latest auction results of March 2016.

• What comes next? At 19 congested individual IP sides (of the 247 IP sides within the scope of the CMP Guidelines), the FDA UIOLI is not yet implemented. National regulatory authorities should require the respective transmission system operators to implement and apply the FDA UIOLI at the respective IP sides by 1 July 2016.

 ACER’s main recommendations

• Improve data reliability: Although progress on transparency and data availability on ENTSOG’s TP was made, TSOs and ENTSOG are requested to ensure that all data are fully available on the TP, reliable, checked and consistent (e.g. with PRISMA auction data).

• Refining congestion definition: ACER requests the Commission to consider clarifying and extending the scope of “contractual congestion”.

ACER Annual Congestion Report 2016