Germany TRAC-X Established in 2005 by German TSOs to facilitate secondary trading of gas transportation services. Web-based trading platform allowing contract holders to trade or auction capacity. In response to European gas market initiatives, in 2010 TRAC-X also tasked with auctions for primary capacity allocation for German pipelines. Short-term secondary capacity transactions are based on operational transfer and bilateral settlement Medium-term secondary capacity transactions are based on contractual transfer. Buyer takes on financial obligations direct to the TSO Trading occurs 9am-11am Monday to Friday. Seller can filter out buyers that they have not established credit support. Transactions executed on the exchange are sent straight to the relevant TSO to perform the transfer of capacity from the buyer to the seller. Buyer makes nomination direct to the TSO. Belgium France Capsquare Capsquare is a web-based platform to buy or sell natural gas transmission capacity on the secondary market in: Belgium’s Fluxys Transmission Network and Storage Installation; and France’s GRTgaz network Short to medium-term capacity transactions. Bilateral settlement. Capsquare sends details of capacity transactions to the relevant TSO so that the capacity usage rights can be transferred from the seller to the buyer.
Germany Netherlands Denmark Link4Hubs Web-based platform for the trading of cross-border pipeline capacity between Germany, Netherlands and Denmark. Day-ahead capacity product developed by TSO. Capacity available for purchase based on operators’ assessments of available capacity. Trading participants register with the relevant TSOs prior to trading. United States Open Access SameTime Information System FERC requires pipeline operators to publish details of available services, operating capacity and scheduled capacity on the Open Access SameTime Information System (OASIS) website. Information about transportation services available intraday: Unsubscribed: quantity of capacity that has not be sold that is available for sale as a firm service. Operationally available: quantity of capacity not used by shippers that is available for sale as an interruptible service.
APPENDIX D – IMPACT ASSESSMENT OF THE POLICY OPTIONS POLICY OPTION BENEFITS COSTS KEY RISKS Status Quo Existing shippers Maintenance of market positions. Nil Adequate unused capacity that would facilitate gas trade may not be offered to the market, thus limiting the ability to build market liquidity. The market may operate to the detriment of the NGO resulting in higher costs to consumers. Information Provision Industry Participants and Consumers Lower barriers to market entry for new retailers. Reduce capacity trading transaction costs, including search and negotiation costs. Improved contestability may result in wider choice of gas retailers and potentially competitive pressure could result in lower prices. Better-informed decision making. Policy Makers Better-informed decision making. AEMO Upgrading data/administrative systems. Staffing costs to manage additional information. Shippers and Pipeliners Possible upgrading of existing data/administrative systems. Staffing costs to collect and provide information to AEMO. Consultation costs associated with developing a standardised contract and responding to the regulatory changes. Australian Governments/Regulatory Agencies Legislative/regulatory change costs. Stakeholder engagement and legal costs. Enforcement costs to ensure compliance with information requirements. Incumbent shippers may not offer up sufficient unused capacity to facilitate the establishment of a meaningful market. The market may operate to the detriment of the NGO resulting in higher costs to consumers.
POLICY OPTION BENEFITS COSTS KEY RISKS 4B. Mandatory Trading Obligations: UIOSI Shippers Mitigate costs by more easily trading unused firm capacity. Pipeliners Would reveal the value of pipeline capacity rights and should assist informing efficient investment and operational decisions by pipeline owners. Industry Participants and Consumers Market participants with insufficient contracted capacity able to more easily access firm capacity to ship gas. Lower barriers to market entry for new retailers. Improved contestability may result in wider choice of gas retailers and potentially competitive pressure could result in lower prices. Transparent discovery of volume and price for secondary pipeline capacity. More efficient use of existing infrastructure. Better-informed decision making. Policy Makers Better-informed decision making. Incumbent Shippers The property rights of existing shippers would be impacted. Market Operator Trading platform establishment and operational costs. Australian Governments/Regulatory Agencies Legislative/regulatory change costs, including the development of an objective rule to define when capacity must be offered up. Monitoring and enforcement costs. Concerns may be raised regarding sovereign risk due to intervening in established contractual agreements of existing GSAs and/or GTAs. Trading/auction platform establishment and operation costs may not be justified if there is limited/inadequate demand for released firm capacity. May create uncertainty for potential underwriters of new or expanded pipeline capacity. If shippers are forced to sell capacity which they otherwise would have derived value (i.e. managing risks associated with peak demand) it may lead to inefficient allocation of capacity and undermine the incentives that underpin investment.