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TAR NC Implementation Document – Second Edition September 2017
The TAR NC states that the discount
‘may be’
different at different IPs. The discount
can therefore be the same at all IPs, at some IPs, or it can differ from one IP to
another.
Pro factor
‘Pro’ is the probability of interruption, calculated in accordance with the following
formula:
Pro = ×
Where:
N
is the expectation of the number of interruptions over D;
D
int
is the average duration of the expected interruptions expressed in hours;
D
is the total duration in hours of the respective type of standard interruptible
capacity product;
CAP
av.int
is, for each interruption, the expected average amount of interrupted
capacity related to the respective type of standard interruptible product;
CAP
is the total amount of interruptible capacity for the respective type of standard
capacity product for interruptible capacity.
The detail in the above formula seeks to improve transparency by specifying all
components. The TAR NC envisages separate calculation of the Pro factor for every
type of standard interruptible capacity product offered. The CAM NC establishes five
categories of standard capacity products: yearly, quarterly, monthly, daily and with-
in-day. For interruptible capacity, the TAR NC deals with ‘types’ within the same
category of standard capacity product. Various ‘types’ of products differ in their
probability of interruption
1)
. Such types can be the same at all IPs, at some IPs, or
they can differ from one IP to another.
‘A’ factor
An adjustment factor ‘A’ applies to reflect the estimated economic value of the type
of standard interruptible capacity product. In practice, it reflects that the costs of
hedging interruption for a network user are higher than the probability of interrup-
tion. Therefore, factor ‘A’ should help to increase the ex-ante discount if needed to
reflect the actual value of the capacity.
As with the Pro factor, the TAR NC contemplates separate calculation of the ‘A’ factor
for every type of standard interruptible capacity product offered. If the economic
value of such products is the same then the level of the A factor can be the same.
In addition, the TAR NC permits the calculation of the ‘A’ factor for each, some or all
IPs. The ‘A’ factor can be the same at all IPs, at some IPs, or it can differ from one
IP to another.
Please see Annex N for an example of an ex-ante discount for a given monthly
standard interruptible capacity product.
1) For example, there can be two yearly interruptible capacity products offered one with the probability of interruption 0.2
and the other with the probability of interruption 0.4.
N × D
int
D
CAP
CAP
av.int