ENTSOG Tariff NC - Implementation Document 2nd Edition

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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:

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:

Cells in red have to be filled out by the network user.

Cells in orange may be given by the TSO but can be modified or be filled out

by the network user.

Cells in blue are calculated automatically.

The logic of using the model is as follows:

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.

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.

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.

Beginning at the reference price, in cells C58–C77, the reserve prices for all

other capacity products with different duration are being calculated.