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TAR NC Implementation Document – Second Edition September 2017
Annex R
Article 30(2)(b) – Examples of
Simplified Tariff Models
The examples given below are for information purposes only and represent only one
possible way of how to design simplified tariff models. In practice it depends on the
applied RPM and system characteristics.
The simplified tariff model presented in the first example is designed for a system in
which the postage stamp RPM is used. It is supposed to enable network users to
forecast future tariffs for different capacity products by creating their own capacity
forecast. The example below is only a screen shot of the actual model, the link to the
Excel file is:
https://entsog.eu/publications/tariffs#TAR-NC-IMPLEMENTATION
Since there is no distinction between entry and exit tariffs, the assumption is that the
entry-exit split results from the forecasted contracted capacity. Within-day products
are not being considered by the model. The discount for interruptible capacity prod-
ucts is considered to be 10%. The multipliers are 1.4 (daily capacity product), 1.25
(monthly capacity product) and 1.1 (quarterly capacity product).
The colour code is:
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Cells in red have to be filled out by the network user.
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Cells in orange may be given by the TSO but can be modified or be filled out
by the network user.
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Cells in blue are calculated automatically.
The logic of using the model is as follows:
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The input given by the TSO in this example are the allowed revenue projections
in row 3 and the expected capacity sales for the upcoming year in cells C7–C26.
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In cells C32–C50, the amount of non-yearly capacity is adjusted by multipliers,
duration of capacity products and applied discounts. In that way, all forecasted
capacity sales for all capacity products are ‘standardised’ to the yearly firm free-
ly allocable capacity product so that there is a yearly equivalent of non-yearly
capacity sales. For example, for quarterly firm freely allocable capacity product
the following calculation is done: the forecast of capacity sales is multiplied by
the product duration and the respective multiplier and then, divided by 365
being the number of days in a year.
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Dividing the allowed revenue (C3) by the sum of the standardised forecasted
capacity sales (C31–C50) results in the reference price for the yearly firm freely
allocable capacity product.
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Beginning at the reference price, in cells C58–C77, the reserve prices for all
other capacity products with different duration are being calculated.