La Importancia del Mantenimiento en los Costos.

Section 21(1) of the Gas Network Access Ordinance (GasNZV) requires gas transmission system operators to reduce the number of market areas to a maximum of one L-gas market area and a maximum of two H-gas market areas by 1 April 2011. The gas TSOs fulfilled this requirement on time and on 1 April 2011 had integrated the former Thyssengas H-gas and Thyssengas L-gas market areas and the OGE L-gas market area with NCG’s H-gas market area. As a result, there were three market areas in Germany in April 2011: the dual-quality NCG market area plus the two single-quality market areas L-Gas 1 and Gaspool.

Further concentration of market areas took place on 1 October 2011 with the consolidation of the L-Gas 1 and Gaspool market areas. This means that the natural gas market in Germany is divided into two dual-quality market areas, or balancing zones, and it is commercially feasible to supply L-gas customers with H-gas and vice-versa. The "Konni Gas" conversion system was introduced to allocate the associated additional network operator costs appropriately. The reduction to two market areas was completed well before the deadline of 1 August 2013 stipu- lated by section 21(1) GasNZV. The geographical location of the market areas on 1 April 2011 as well as the current market area landscape are shown on the following map.

Figure 102: Market area landscape for gas on 1 April and 1 October 2011.

Three market areas as of 1 April 2011 Two market areas as of 1 October 2011

In principle the merger of market areas now means that all the exit points in one market area can be combined with all the entry points in the other market area. There are, however, points between what were previously completely separate market areas where transport flows are congested (transfer volumes). This means that the merger of market areas reduces the offer of firm and freely allocable entry-exit capacity (FZK) at the remaining booking points in the merged market area. However, the usability of the remaining capacity is significantly greater (contractually agreed range) for shippers as all exit points in the former market area A can now be supplied with a remaining firm entry capacity from the former market area B, which in the past was only possible to a limited extent or not at all.

In addition to FZK capacity, some gas TSOs also offer capacity products whose firmness and free allocability is subject to conditions (bFZK). The firmness of bFZK capacity is often de- pendent on the forecast temperature for the next day or the forecast flows at problematic in- terconnection points in the market area. Fundamentally this means that when temperatures are low, large volumes of gas flow through the network and the capacity of market area entry points is used to a greater extent, and more evenly (use of entry points to serve the needs of the network), with firm capacities as a result. When the weather is warmer and more flexible use is made of entry points owing to lower gas flows (entry primarily in the south or north), only interruptible use – depending on the ability and capacity of network operators – is availa- ble. However, this does not mean that the nominated transportation really does need to be interrupted. Interruption critically depends on the transportation capacities of gas transmission

systems and the total nominations of all shippers. It is also theoretically possible with bFZK products that a local component could increase firmness by, for example, making possible the firm use - without the risk of interruption - of a southern entry point in combination with south- ern exit points in a defined local area, regardless of the forecast temperature of the previous day. However, capacities such as these are not as yet offered by transmission system opera- tors.

The 2012 monitoring survey asked shippers – wholesalers and suppliers – about which possi- ble solutions to capacity restrictions at the remaining booking points they would prefer. The available choice was between securing firm capacity levels by obtaining flow commitments or converting firm FZK – at least in part – into capacity products with conditional firmness and allocability (bFZK). As the response options are mutually exclusive, shippers were asked to assign values of 1 or 2 to one option and values of 3 or 4 to the other option, where 1 stands for "very important" and 4 for "unimportant". The results are shown by dividing shippers into three categories: shippers who had no capacity bookings in gas year 2010/11 and shippers who, in terms of total entry and exit bookings, had booked more or less than 1 million kWh/h of capacity.

Over 80 percent (in 2011 68 percent) of shippers with high capacity bookings of over 1 million kWh/h prefer to secure firm capacity by obtaining flow commitments. Shippers with bookings of less than 1 million kWh/h are distributed equally across both response options with a slight preference of 55 as opposed to 45 percent (2011: 50/50) in favour of securing firm capacity by obtaining flow commitments. The following diagram shows the results, including the number of responses.

Evaluation by shippers of LFZ and bFZK 0 10 20 30 40 50 60 70 80 90 LFZ preferred bFZK preferred ≥ 1,000,000 kWh/h 0 to 1,000,000 kWh/h 0 kWh/h 16 77 150 4 54 94 Percent

Figure 103: Evaluation by shippers of two options (LFZ or bFZK) for presenting firm capacities in large market are- as

Compared with 2010 there would therefore appear to be a stronger preference for securing FZK by means of flow commitments. However, the number of shippers who answered the question in the reporting year 2011 was lower (number of responses in 2012: 244; 2011: 262); this led to a significant percentage shift among shippers in particular with bookings of over 1,000,000 kWh/h (number of responses 2012: 20; 2011: 25).

Shippers with high capacity bookings who prefer the (partial) transformation of capacity into bFZK to the purchase of flow commitments will probably already have acquired considerable experience with this capacity product – including in particular the low probability of interrup- tions. In addition, the remaining market areas are increasingly liquid such that procuring gas on the spot market to secure uninterrupted supplies is a genuine option. What is more, it is becoming increasingly difficult and costly to obtain flow commitments from network operators. In addition, from the shipper's point of view calling on a flow commitment is tantamount to an interruption as the shipper cannot use its actual nomination but must observe the nomination value of the flow commitment contractually agreed with the network operator. As a result, the bFZK capacity product could well become even more important in the future. However, the network operator's bFZK offer should take greater account of the local component referred to above in order to reduce the interruption scenarios even further. This would appear to be a good way of providing the large market areas in Germany with sufficient capacity offers.