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Ten-Year Network Development Plan 2017 Annex F: Methodology |
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6.4 MONETISATION PER ZONE –
PRICE SPREAD CONFIGURATION
The monetisation per Zone for price spread configuration is calculated for one infra-
structure level relative to another.
Basic principle
A split of the difference in the EU bill is calculated between what can be directly al-
located, and what cannot. The unallocated part will be split based on the difference
of marginal prices between the two configurations, weighted by the demand.
Detailed process
In the following description, the term ∆(quantity) is used to design the difference in
the values of a given quantity between two configurations (for instance LOW and AD-
VANCED).
First the difference of the adjusted EU Bill is computed:
Step 1: Allocation based on “Price Spread Adjustment Gain”
In the modelling results, a quantity named "Price Spread Adjustment Gain" is avail-
able for each Zone. This quantity is computed ex-post. It is the amount by which the
bill in the country would drop following an import price spread adjustment as a con-
sequence of the import flow reaching the minimum flow threshold.
Any difference in the “Price Spread Adjustment Gain” can be allocated directly to
the corresponding Zone.
\\
For each Zone, compute the directly allocated bill difference
\\
Compute the sum of the previous quantities (Labelled afterwards as “EU Bill
Difference Allocated”)
\\
Compute the unallocated part of the EU Bill (Labelled afterwards as “EU Bill
Difference Unallocated”)
Step 2: Allocation of the unallocated part based on the marginal prices
\\
For each Zone, compute the maximum possible consumer surplus
\\
For each Zone, compute the key to allocate the remaining part of the EU Bill
difference
\\
Compute the sum of the previous quantities (Labelled afterwards as “Total Key
Split”)
\\
For each Zone, compute the bill difference allocated indirectly
Finally
For each Zone, compute the bill difference
TYNDP 2017
Annex F
Assessment Methodology
Page 30 of 31
Monetisation per Zone - Price Spread Configuration
6.4.
The monetisation per Zone for price spread configuration is calculated for one infrastructure
level relative to another.
Basic principle
A split of the difference in the EU bill is calculated between what can be directly allocated, and
what cannot. The unallocated part will be split based on the difference of marginal prices
between the two configurations, weighted by the demand.
Detailed process
In the following description, the term
∆(quantity)
is used to de ign he difference in th values
of a given quantity between two configurations (for instance LOW and ADVANCED).
First the difference of the adjusted EU Bill is computed:
EU Bill Difference = ∆("Total EU B
i
ll adjusted Price Spread")
Step 1: Allocation based on “Price Spread Adjustment Gain”
In the modelling results, a quantity named "Price Spread Adjustment Gain" is available
for each Zone. This quantity is computed ex-post. It is the amount by which the bill in the
country would drop following an import price spread adjustment as a consequence of
the import flow reaching the minimum flow threshold.
Any difference in the “Price Spread Adjustment Gain” can be allocated directly to the
corresponding Zone.
For each Zone, compute the directly allocated bill difference
Zone direct allocation = − ∆(Price Spread Adjustment Gain)
Compute the sum of the previous quantities (Labelled afterwards as “EU Bill
Difference Allocated”)
Compute the unallocated part of the EU Bill (Labelled afterwards as
“
EU Bill Difference Unallocated
”)
TYNDP 2017
Annex F
Assessment Methodology
Page 30 of 31
Monetisation per Zone - Price Spread Configuration
6.4.
The monetisation per Zone for price spread configuration is calculated for one infrastructure
level relative to another.
Basic principle
A split of the difference in the EU bill is calculated between what can be directly allocated, and
what cannot. The unallocated part will be split based on the difference of marginal prices
between the two configurations, weighted by the demand.
Detailed process
In the following description, the term
∆(quantity)
is used to design the difference in the values
of a given quantity between two configurations (for instance LOW and ADVANCED).
First the difference of the adjusted EU Bill is computed:
EU Bill Difference = ∆("Total EU B
i
ll adjusted Price Spread")
Step 1: Allocation based on “Price Spread Adjustment Gain”
In the modelling results, a quantity named "Price Spread Adjustment Gain" is available
for each Zone. This quantity is computed ex-post. It is the amount by which the bill in the
country would drop following an import price spread adjustment as a consequence of
the import flow reaching the minimum flow threshold.
Any difference in the “Price Spread Adjustment Gain” can be allocated directly to the
corresponding Zone.
For each Zone, compute the directly allocated bi l differenc
Zone direct allocation = − ∆(Price Spread Adjustment Gain)
Compute the sum of the previous quantities (Labelled afterwards as “ ill
Diff rence Allocated”)
Compute the unallocated part of the EU Bill (Labelled afterwards as
“
EU Bill Difference Unallocated
”)
TYNDP 2017
Annex F
Assessment Methodology
EU Bill Difference Unallocated
= EU Bill Difference − EU Bill Difference Allcoated
Step 2: Allocation of the unallocated part based on the marginal prices
For each Zone, compute the maximum possible consumer surplus
Zone Max Consumer Surplus = demand ∗ ∆(Zone marginal price)
For each Zone, compute the key to allocate the remaining part of the EU Bill
difference
Zone Key Split = Zone Max Consumer Surplus − Zone direct allocation (Step1)
Compute the sum of the previous quantities (Labelled afterwards as “Total Key
Split”)
For each Zone, compute the bill difference allocated i ir l
Zone indirect allocation = EU Bill Difference Unallocated ∗ Zone Key Split
Total Key Split
Finally
For each Zone, compute the bill difference
TYNDP 2017
Annex F
Assess ent ethodology
E Bill ifference nallocated
= EU Bill Difference − EU Bill ifference Allcoated
Step 2: Allocation of the unallocated part based on the arginal prices
For each Zone, co pute the axi u possible cons r surplus
Zone ax Consu er Surplus = demand ∗ ∆(Zone marginal price)
For each Zone, compute the key to allocate the remaining part of the EU ill
difference
Zone ey Split Zone ax Consu er Surplus − Zone direct allocation (Step1)
Compute the sum of the previous quantities (Labelled afterwards as “Total Key
Split”)
For each Zone, compute the bill difference allocated indirectly
Zone indirect allocation E Bill ifference nallocated ∗ Zone ey Split
Total Key Split
Finally
For each Zone, co pute the bill difference
m t M t
l
U Bill Diff
U ll a e
ill iff
ill Diff
ll
: ll
i
ll
rt
d on th m i l ic
, m
m im m
i l
l
M
l
e
i l i
For each
,
ll
i ing rt f
ill
iff
Z ne Ke li = Zone Max Consumer Surplus − Zone direct allocation (Step1)
f
i
i i (
ll f
l
Split”)
For e h Zon ,
bill difference allocated i i
l
Zone indirect allocation = EU Bill Difference Unallocated ∗ Zone Key Split
l
li
Finally
For each Zone, comput the bill difference
TYNDP 2017
Annex F
Assessment Methodology
EU Bill Diff re ce Unallocated
= EU Bill Difference − EU Bill Difference Allcoated
Step 2: Allocation of the unallocated part based on the marginal prices
For each Zone, compute the maximum possible consumer surplus
Zone Max Consumer Surplus = demand ∗ ∆(Zon marginal price)
For each Zone, compute the key to llocate the remaining part of the EU Bill
difference
Zone Key Split = Zone Max Consumer Surplus − Zone direct allocation (Step1)
Comput the sum of the previous quantities (Labelled afterwards as “Total Key
Split”)
For each Zone, compute the bill difference allocated indirectly
Zone indirect allocation = EU Bill Difference Unallocated ∗ Zone Key Split
Total Key Split
Finally
For each Zone, compute th bill differenc
Z n bill difference = Zone direct allo ation + Zone indirect allocation