1 / 20

22 January 2009

Cross-border gas transmission ‏ Investment project (I1) Update to RCC at account of project leader Erik Rakhou. Project is delivered in co-operation with I2. 22 January 2009. Agenda update. Recap on conclusions 14 November 2008 and project as a whole Interim results: where do we stand ?

whitby
Télécharger la présentation

22 January 2009

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Cross-border gas transmission‏ Investment project (I1) Update to RCC at account of project leader Erik Rakhou Project is delivered in co-operation with I2 22 January 2009

  2. Agenda update • Recap on conclusions 14 November 2008 and project as a whole • Interim results: where do we stand ? • Timetable on way forward • VT: in-depth update and discussion on key parameters • Annex

  3. 1. Recap 2008 (a) • Large support to proceed with enhancement of regional investment climate • The support was informed by common input of TSOs, Regulators and Shippers. • Eg. work on principles, questionnaire. • Questionnaire and SG proved need of a common regional approach with room for national specifics (“adapter” metaphore) • 14 nov. ‘08 workshop signalled support of Ministries • (in view of very recent events support and interest is likely to be even much stronger)

  4. 1. Recap 2008 (b) • Work on 3 (strongly correlated) topics, with strongest accent and therefore workload on the test case: • Manual (with overview of current regulatory practices) • Report on incentives (how to stimulate performance in relation to investments) • Virtual test (=VT) case (simulation on building virtual pipelines in as real as possible environment) • All 3 elements directed at 1 goal: • By end of ‘09 to reach (path to) agreed regional investment framework • This path consists of insight in working of incentive mechanisms, overview of current regulatory practices and recommendations (if required) on how to enhance current practices and rules

  5. 2. Interim results: where do we stand? Manual: final draft to be distributed after 26-27 Feb workshop on VT, to be focused on key input parameters, tested in VT re: status quo reg. practices on investment Report on incentives: A slowdown due to illness of 1 of authors; in AG of 20.1 a ‘PP draft’ was presented, a final presentation shall be done in 26/27 Feb VT workshop. Virtual test case: ToR approved. Now detailed proposals are worked out. 16 February first material distributed for 26-27 Feb kick-off workshop VT. Work in progress

  6. 3. Timetable on way forward in 2009 22 January Update to RCC 2 February Small working mtg with EFET/Operators to pre-discuss materials for workshop ‘VT’ X February Telco with AG on VT workshop 10 February (Only if required) possibility to inform PB X February Proposal to inform (technical) RCC 16 February Material for workshop is distributed 26 – 27 February Kick-off meeting virtual test (Brussels) May 2nd Meeting virtual test (location ?) May/June SG September 3rd Meeting virtual test (location ?) November Conclusions workshop virtual test (location ?) December Final results communicated

  7. 4. General. Why a virtual test? (a) • Support from stakeholders and TSOs (SG and approval TOR): • gas transmission infrastructure investment decisions should be made on the basis of an “economic test” • a rapid test to assess the viability and acceptability by using a business simulation approach (a or some “virtual case tests”). • Developing a virtual case provides the opportunity to better understand how all the parameters at stake interact within an investment process and how to address them to facilitate a common approach to capacity development. This would hardly be possible studying a concrete case due to the lack of generality related to its specifics. • Seeking to learn of the implications of this hypothesis and the “test” should involve regulators, stakeholders and TSOs. • the necessary detail that would need to be defined and the environmental (attitude, regulatory, legal) changes that might need to happen to implement such an approach. • The approach, to be tested within the GRI NW by all or a subset of TSOs/regulators. • It is envisaged that the project would involve both pre-work and homework for regulators, TSOs and stakeholders as well as attendance and participation during 2009. • At least 1/d month, at certain period involving up to “Excel”-experts

  8. 4. Outcomes (b): ToR. • Quote ToR (p.4): “do the findings show that under tested framework(s) regional x-border investments shall happen in timely, efficient and sufficient manner?” • If findings are supported, an advise on enhancement shall be addressed to governments and other relevant parties by end of December. Shippers TSOs Regulatory framework balances risk/reward in market (incl. Consumers interest)

  9. 4. How shall test look like in detail? (c) Summary based on insights from AG in Bonn, building on earlier work Goals, striven for, next to ToR, could be more precised as: Content output: Test key parameters of (regional) regulatory systems and resulting effects on investment behavior of TSOs/shippers Test innovative suggestions to incentivize investment, where appropriate Process output: Valuable learning by real experts in test environment on co-operation/co-ordination Rework the results in advise report to policy makers In qualitative but realistic terms Accounting key assumptions and simplifications (and therefore not investigated parameters) Agree on (Scope all elements of) “Decision tree” of the test in/by kick-off workshop 26-27 February See next slide Define objectives of participants during the VT See next slide In

  10. 4. How shall test look like in detail? (d) Summary based on insights from AG in Bonn, building on earlier work Scope of test Step 1: Define 4-5 scenarios of regulatory framework (see minutes AG and an illustrative VT parameters summary) Frameworks could be based on i.a. connecting hubs of NL, GE, FR, BE. by a virtual pipeline. For trigger it is simplified that “physical congestion” between hubs is proven. Elements from other regional frameworks could be tested as well in 1 of the scenarios. Frameworks should reflect that there are various frameworks at different sides of the border (key to realism). Steps 2-4 are: Define commitment process (“tender” letter by TSOs) Define how shippers react (eg several iterations like in VT suggested, via ‘price schedule’) “crucial to organise realistic input and therefore possibly anonymity” An execution step: eg at certain NPV-level investment is done (that is more outcome, then input) Agree on Objectives of the “participants during test” Eg Regulators strive to maximize consumer welfare Eg TSOs shall invest if X (50%) of NPV test is met Eg Shippers want capacity at max. cost x, depending on their market view (use common “shipper roles” according to which shippers shall adopt a certain risk appetite) In

  11. 4. How do we see VT on 26 and 27 february and afterwards? (e) • 26 and 27 February is the “scoping” kick-off w.s. • 26 February • Why Test ? • Input from Manual work and Incentive study on current investment climate • Walk through test steps and make choices • 27 February • 2nd Walk through the test • Definitive choices and homework for May • May, September • Moments to present, check outcomes • Most work in between • November • Conclusions and recommendations

  12. 4. Main question to RCC (f):what parameters do we find key to take aboard in VT? • Discussion of key parameters (see hand-out)

  13. 5. Annex: project details

  14. Recap on project in 1 slide • The projects goals is by end of 2009 to have a (path to) “agreed framework for sound (regional) investment climate • This path consists of insight in working of incentive mechanisms, overview of current regulatory practices and recommendations (if required) on how to enhance current practices and rules • 2008 delivered as result large support to proceed with enhancement of regional investment climate AND an (informed by large knowhow) path on how we get to enhancement “Manual” Current framework from 1 perspective “Incentives study” Current framework from other perspective • Virtual Test • => • Advise on agreed framework

  15. Annex: “crystall ball” on VT: Possible preview of some statements by end of 2009... • “We solved part of the problem”, more work to be done... • The investment experts learned in practice what new common approach could be, hopefully this helps real projects... • We learned that especially detailed assumptions can radically change outcomes: key is in compatible national detailed approaches... • We found 100 problems, but now feel we should at least solve the following 3... • Key was getting from drawing table to actually doing it...

  16. THE MANUAL FOR NEAR TERM INVESTMENT PROCEDURES FOR (X-BORDER) TRANSMISSION Table of Contents • Introduction • Regulatory model • Type of investment • Investment Planning • Determining whether an investment proposal is efficient, required and sufficient • Allocation of risks (cross border only) • Allocation of costs (tariff based only) • Bearing the costs and risks • Determining allowed return Annex - Definitions UNDER DRAFT. To be focused at key parameters Needed for VT.

  17. Incentives study: work in progressAspects of investment climate to be analysed further (a) (in virtual test case/experiment) Open Seasons/identifying demand signals about future demand long-term commitment by shippers (risk sharing) Regulatory schemes higher rate of returnfor taking on more risk (risk sharing) longer regulatory period The role ofex ante approval Coordination how to achieve coordinated investment plans What happens if TSOs don’t build? UNDER DRAFT.

  18. Incentives study: work in progressAspects to be considered further (b) Theories underpinning incentives Reward risk taking/penalise poor decisions Risk sharing – consumers/shippers/network companies Encouraging efficiency Different treatment for replacement and extension Problems in applying principles Informational asymmetry – do regulators know enough? To adapt to cross-border, how could benefits and costs be shared on either side of the border? Persuading network operators to develop an appetite for risk The role network companies play may need to significantly evolve UNDER DRAFT.

  19. a. What shall be projects outcome by end of ’09? Roadmap steers... Quote Roadmap from “9 building blocks of our successful regional market by 2012”: “The investment climate should be such that investments in capacity… are sufficient and timely and persistent physical congestion is avoided. Investments should facilitate gas supplies from diverse sources to meet the need for secure gas supplies” See point III, p. 10 Encourage(d)‏ Sound Regional Investment Climate By end of 2009

  20. b. What shall be projects outcome by end of ‘09? Projectplan details... • Agreed framework for a sound (regional) investment climate • By means of a thorough confirmation via market consultation • Using common principles proposed by NW-EU TSOs • Leading to a ‘side-letter to MoU’ between Regulators and any additionally, based on consultation outcome, required measures (e.g. testing in pilot projects)‏ • Mechanism(s) for incentives for TSO’s, encouraging regulated investment • By means of a report on incentives • Including addressing question of alternatives (next) to user commitments as basis for investment • Leading, if required, to advise of GRI NW on adjustment of regulatory framework by either governments and/or regulators Encourage(d)‏ Sound Regional Investment Climate By end of 2009

More Related