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TAR NC Implementation Document – Second Edition September 2017
Payable Price
PAYABLE PRICE: TWO APPROACHES
Responsibility: fixed payable price approach for existing capacity under a price
cap regime is subject to consultation per Article 26(1) by TSO/NRA, as NRA
decides; subject to decision by NRA
The difference between the fixed and the floating payable price approaches is the
degree of ‘knowledge’ with respect to the payable price when contracting the
capacity:
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Under the floating payable price approach, where capacity is bought for a gas
year beyond the next, the reserve price is not known. The reserve price will only
be known before the annual yearly auction that takes place prior to the
respective gas year. Therefore, the clearing price for future gas years will only
reflect an indicative reserve price. The actual payable price will only be known
upon the publication of the reserve price prior to the gas year.
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Under the fixed payable price approach, the basis and the evolution of the price
is known prior to the annual yearly capacity auctions. That is, the reserve price
is known, as is the type of index, even if the actual index value remains
uncertain. Similarly, the risk premium is known.
For both floating and fixed payable price, the auction premium may differ per
contracted yearly capacity product but is set and known for each contracted yearly
product at the time of the original auction.
ARTICLE 24