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TAR NC Implementation Document – Second Edition September 2017 |
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CAPACITY WEIGHTED DISTANCE REFERENCE
PRICE METHODOLOGY
Responsibility: subject to consultation per Article 26(1) by TSO/NRA, as NRA
decides – only for comparison purposes with the proposed RPM; subject to
decision by NRA
CWD assumes that the share of the allowed revenue to
collect from each entry or exit point should be propor-
tionate to its contribution to the cost of the system’s ca-
pacity and to the distance between it and all exit points
or all entry points. The resulting tariff would be uniform
per unit of capacity and distance.
CWD is the only counterfactual set out in the TAR NC,
which means that all TSOs will have to compare the
tariffs under their chosen RPMs to CWD tariffs. Apply-
ing CWD without modification would eliminate the
need for any counterfactual. However, the comparison
against CWD still applies if any modifications to param-
eters and/or steps as set out in Article 8 are made,
leading to a ‘Modified CWD’. The counterfactual CWD
can calculate the reference prices for each point, for
clusters of points, or both.
As of September 2017, some European TSOs apply a
Modified CWD, such as in France, Belgium, and
Germany. In Great Britain, there has been a formal
proposal to move to apply a Modified CWD. Annexes D
and E provide a process and an example of CWD
methodology under Article 8.
FORECASTED CONTRACTED CAPACITY
Responsibility: subject to consultation per Article 26(1) by TSO/NRA, as NRA
decides; subject to decision by NRA
The CWD methodology can vary depending on the assumptions on forecasted
contracted capacity made for each entry and exit points.
Therefore, forecasted contracted capacity must aim at an objective and realistic
forecast of the contracted capacity for each entry and exit point to minimise the need
for future adjustments. Further to feedback received from stakeholders and through
ACER, ENTSOG considers that such forecast must be based on a best estimate, and
be as realistic as possible, for the forecast of the amount of capacity that it expects
to be contracted. Such best estimate is based on the TSOs input, and may be also
based on SSOs and DSOs input, and is subject to NRA approval as part of the NRA
decision-making on the RPM.
ARTICLE 8
ARTICLE 8(1)(B)
Cost-reflectivity
(cost drivers)
Not too
‘complex’
Figure 16:
Balance for CWD RPM