Regulation

Capacity allocation

HomeRegulationRegulation Capacity allocation

CSL uses market-based mechanisms to allocate Rough capacity. These mechanisms ensure that Technical Rough Capacity* is made available on the primary market through a mix of firm and interruptible, long- and short-term, bundled and unbundled services, as in compliance with the Third Energy Package (TEP)

CAPACITY ALLOCATION MECHANISM

Rough storage capacity is sold on a rolling basis, where:

  1. Minimum Rough Capacity** and Additional Space*** is allocated to the primary market before the start of the storage year† by an objective, transparent and non-discriminatory bilateral negotiation process. The regular publication of commercial and operational data allows all users to set timely and efficient booking strategies (see "data transparency");
  2. any Minimum Rough Capacity or Additional Space which has not been sold by 30 days before the start of the relevant storage year is required to be auctioned with a marginal cost reserve price;
  3. any capacity in excess of the Minimum Rough Capacity and Additional Space* may be sold before and during the storage year through a mix of standard and non-standard products (see "What we offer").

Technical Rough Capacity means the maximum storage capacity that CSL can offer to users, taking account of system integrity and the operational requirements of the Rough storage facility. This value varies over the season and between years due to a number of factors, including plant pressure and reservoir performance constraints. See the Operational Guide for further details.

** Minimum Rough Capacity means 455 million standard bundled units (SBUs). Each SBU comprises comprising 1 kWh/day deliverability, 66.593407 kWh of space, and 0.351648 kWh/day injectability

*** Additional Space means that space into which gas can be injected over and above the Minimum Rough Capacity, which has been created as the result of the operation of Rough and which can be quantified before the beginning of the Storage Year following observations on the pattern and extent of customer withdrawal nominations in the previous Storage Year, but which in any event will be no less than 1534 GWh.

† Storage year is the period from the Gas Day 1 May in any year to (and including) Gas Day 30 April of the following year.

For the 2016/2017 Storage Year, due to a limitation of Rough’s physical capabilities (see REMIT 2015-33 revisions 1 – 5 for more details), the CMA has confirmed that it will not prioritise enforcement against CSL as long as it sells 340m SBUs and 0.13TWh ahead of the Storage Year.

CONGESTION MANAGEMENT PROCEDURE

All unused capacity is made available through a variety of supplementary interruptible products that can be purchased within day, day-ahead, weekend, weekly, monthly, and quarterly. Interruptible products are offered with a specific raking of interruption:

  1. Supplementary Interruptible Service (SIS) is offered on a pro-rata basis at seasonal capped prices; users pay for total uninterrupted utilisation only;
  2. Bronze is offered on a first-come/first-serve basis at daily negotiated prices; users pay for total uninterrupted allocation;
  3. Long-Term Bronze is offered on a first-come/first-serve basis at daily negotiated prices; users pay for total uninterrupted allocation.

The above products are offered in unbundled units and are allocated by an objective, transparent and non-discriminatory process. This market-based approach ensures that prices reflect the expected level of interruptability.

See "Interruptible and UIOLI services" for further details.

SECONDARY MARKET

Unused capacity can be freely traded among users through CSL's secure online management system "StorIT" which allows users to perform the following tasks from the same user-friendly web-enabled platform:

  • manage nominations for the allocated capacity;
  • retrieve information on available capacity;
  • bid for additional capacity;
  • trade unused capacity;
  • communicate with other users.