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TAR NC Implementation Document – Second Edition September 2017
ENTRY-EXIT SPLIT
Responsibility: subject to consultation per Article 26(1) by TSO/NRA, as NRA
decides; subject to decision by NRA
One RPM parameter is the split between revenue derived from entry points and exit
points. The entry-exit split may be either an input to the RPM or an output.
Article 8(1)(e) requires the counterfactual CWD to use a 50/50 entry-exit split as an
input. The TAR NC does not define the entry-exit split for the proposed and approved
RPM, but Article 30(1)(b)(v)(2) requires its publication. In any case, the broader
principles established by Article 13 of the Gas Regulation always apply.
Table 4 below provides a simple example showing the result of different entry-exit
splits using the postage stamp methodology. Where the entry-exit split is an
input
,
the split sets the entry and exit revenues, which then determine the tariffs. The steps
appear in sequence from left to right. Where the entry-exit split is an
output
, the cal-
culation of the tariffs comes first. The example assumes identical entry and exit tar-
iffs under the postage stamp RPM, and the steps then proceed from right to left,
ending in the derivation of the split based on the percentage of revenue recovery
yielded by the identical tariffs. The cells show the numbering of the steps.
THE EFFECT OF DIFFERENT ENTRY-EXIT SPLITS ON THE TARIFFS
Assumptions
Transmission services revenue
€100
Forecasted contracted entry capacity
25 units
Forecasted contracted exit capacity 50 units
Calculation
1. Entry-exit
split as input
2. Total entry
revenues
2. Total exit
revenues
3. Entry tariff
3. Exit tariff
50 : 50
50% × €100 =
€50
50% × €100 =
€50
€50/25 units =
€2.0/unit
€50/50 units =
€1.0/unit
40 : 60
40% × €100 =
€40
60% × €100 =
€60
€40/25 units =
€1.6/unit
€60/50 units =
€1.2/unit
3. Entry-exit
split as output
2. Total entry
revenues
2. Total exit
revenues
1. Entry tariff
1. Exit tariff
33 : 67
25 units ×
€1.33/
unit = €33
50 units ×
€1.33/
unit = €67
€100/75 units =
€1.33/unit
€100/75 units =
€1.33/unit
Table 4:
The effect of different entry-exit splits on the tariffs
As of September 2017, European TSOs apply a different range of entry-exit splits for
their RPM. The mandatory comparison with the CWD 50/50 entry-exit split shall be
made in any case as part of the final consultation document per Article 26(1). Some
MSs do not appear in the figure displaying current entry-exit splits below: Estonia,
Finland and Latvia do not follow entry-exit tariff principles, while Cyprus and Malta
have no transmission system.
ARTICLE 8(1)(E)