ENTSOG Tariff NC - Implementation Document 2nd Edition

CAPACITY WEIGHTED DISTANCE REFERENCE PRICE METHODOLOGY

ARTICLE 8

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.

Cost-reflectivity (cost drivers)

Not too ‘complex’

Figure 16: Balance for CWD RPM

FORECASTED CONTRACTED CAPACITY

ARTICLE 8(1)(B)

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.

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