Does technical delivery of natural gas for gasification purposes or emergency delivery has to be reported under REMIT?
A “service company” has been asked by TSO or DSO to provide natural gas in case of network failure/damage. This action can take up to 2-3 days of delivery realized for a relatively small group of final consumers within specific area of the network, where regular delivery is not possible due to supply failure. Sometimes such delivery is not direct, but one service company sells natural gas to another service company. Does such contract have to be reported under REMIT?
As volumes are very small, transaction has no influence on the market and this delivery has semi-balancing purpose, it does not have to be reported.
A “service company” is a firm which repairs a transmission or distribution network in case of its damage. Let’s say that there is a small village supplied with gas by a single pipe. This pipe has been damaged due to some construction works. A service company has been called to repair the pipe. The repair work has been scheduled for two business days. During this time the village is without gas supply. To avoid such gas supply interruption (especially during the winter), the service company provides gas to the village, usually using LNG cistern and small regasification station (short time emergency delivery).
In such situation a service company does not sell gas to the final customers, it just provides gas to the network and sells it to the operator (in our understanding this is for balancing purposes). Sometimes there are two service companies due to technical specifics of repair works and it happens that one service company (main contractor of repair works) sells gas to another service company (subcontractor of repair works).
Our question is whether such contracts should be subject to REMIT reporting. In our view this is balancing (or filling the network) so it is not subject to REMIT reporting.
In the Agency’s view, based on the information provided above, this contract seems to be a contract for the supply of gas for a period of maintenance, and not for a balancing service.
In the Agency’s view, balancing trades are well defined in Articles (2)9 to (2)11 of COMMISSION IMPLEMENTING REGULATION (EU) No 1348/2014, in the sense that they are related to balancing energy and services:
(9) ‘balancing energy’ means energy used by TSOs to perform balancing;
(10) ‘balancing capacity (reserves)’ means the contracted reserve capacity;
(11) ‘balancing services’ means,
- for electricity: either or both balancing capacity and balancing energy;
- for natural gas: a service provided to a TSO via a contract for gas required to meet short term fluctuations in gas demand or supply.
Last update: 20/07/2018
There are different views within the industry about the reporting of purchase seller agreement when transactions consist of different parts. For example:
- Company A can sell electricity to Company B in accordance with the terms and conditions of their purchase seller agreement; but also
- Company B can sell electricity to Company A in accordance with the terms and conditions of their purchase seller agreement
How should such a contract be reported?
- Some market participants believe that the contract should be split in two different reporting streams: one contract for the sold quantity and one contract for the bought quantity
- Other market participants suggested to report one contact using C as buy/sell indicator
This different views may result in the reporting of the same contract with different formats:
- Company A reports a Table 2 with a “C” as buy/sell indicator;
- Company B report two separate Table 2, one for the sold quantity and one contract for the bought quantity
What is the right way to report such purchase seller agreement transaction?
In the Agency’s view, purchase-seller agreements should be reported with Table 2, as per the examples available in Annex II to the TRUM provided by the Agency’s stakeholders.
With regard to the reporting of a transaction under a purchase-seller agreement with Table 2, if market participants have different views on the reporting of such contracts, they can report their purchase-seller agreement with Table 2 either as one contract with a “C” as buy/sell indicator, or two separate contracts, one as “B” for Buy and one as “S” for Sell, provided that the meaning of the reports is the same.
As a result, any EXECUTION under that framework agreement should be reported with Table 1. Please see examples in Annex II to the TRUM.
Last update: 20/07/2018