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TAR NC Implementation Document – Second Edition September 2017
Annex C
Article 5 – Example of Cost
Allocation Assessments
This Annex describes the case of a TSO applying the CAA on capacity-based and
commodity-based transmission tariffs.
In the following sections, calculations are explained step by step based on a fiction-
al TSO network. Tables with exemplary figures are added to provide for easier under-
standing.
Table A: Distances between Entries and Exits
1)
TABLE A: DISTANCES BETWEEN ENTRIES AND EXITS
Distance (km)
Exit
IP 1
IP 2
IP Exit 5
IP 3
Consumption
Entry
LNG
650
820
840
420
460
IP 1
0
350
520
360
200
IP Entry 4
150
480
660
430
270
IP 2
350
0
230
430
270
IP 3
360
430
440
0
170
Table 25:
Distances between Entries and Exits
The first Table shows the distance from each exit point to each entry point of the sys-
tem. While ‘IP Exit 5’ and the local consumption are just noted as exits, ‘IP Entry 4’
and the point ‘LNG’ are specified as entries only. All three other IPs function as an
entry and exit point. The consumption in this model is representative for many exits
and can be assimilated to a cluster. By building the weighted centre of those single
consumption exits, all are summarized to this one location. The distances are then
determined according to the approach chosen for CAA by the TSO or NRA (no man-
datory approach in the TAR NC)
2)
.
Two parts are considered.
\\
Part I
presents the CAA for the capacity-based transmission tariffs
(all TSOs use such tariffs, therefore this CAA is mandatory for all TSOs).
\\
Part II
presents the CAA for the commodity-based transmission tariffs
(optional, only for TSOs which apply such tariffs).
1) Consumption refers to ‘intra-system network use’. It is forecasted contracted capacity, as per Article 5 provisions.
2) For distance calculations between entry and exit points, one assumes here that the concept of ‘flow scenario’ referred to
in Article 8 on the CWD counterfactual is also applied to the CAA. E. g. it is impossible to flow gas from IP 1 seen as an
entry point to IP 1 seen as an exit point. Therefore, for the calculation of the average distance for exit point IP 1, it is
necessary to remove the capacity value of entry point IP 1 from the denominator. If this adjustment is not made, average
distances will be underestimated at entry (resp. exit) points where flow scenarios do not exist with at least some exit
(resp. entry) points. However, for the CAA it is also possible to assume that the concept of flow scenario does not apply,
since Article 5 on CAA does not make it a requirement.