IMPROVEMENT OF THE GTS CODE

IMPROVEMENT OF THE GTS CODE:
DAILY BALANCING IMPLEMENTATION
ROMAN SHYKERYNETS
Head of Methodology and Project Division
PJSC UKRTANSGAZ
2017

CONTENT
1. BAL NC: OVERVIEW OF BALANCING PROCESSES
2. MAIN PRINCIPLES OF DAILY BALANCING
3. BALANCING PORTFOLIO
4. NOMINATION, RENOMINATION, ALLOCATION: TIME FRAMES
5. SUPPLY REGISTER
6. INFORMATION PROVISION MODEL
7. ALLOCATIONS TO BALANCING PORTFOLIO
8. IMBALANCE QUANTITY, IMBALANCE CHARGE, APPLICABLE PRICE
9. FINANCIAL SECURITY
10. NEUTRALITY MECHANISM

1. BAL NC: OVERVIEW OF BALANCING PROCESSES

2. MAIN PRINCIPLES OF DAILY BALANCING
• Balancing zone: single zone for Ukraine that comprises national GTS and all DSO
systems
• Balancing period: gas day as provided by NC BAL
• The Network User is a holder of the balancing portfolio and is the ‘balance responsible
party’ (holds responsibilities towards UTG for any imbalance of the balancing
portfolio)
• Any input into and any off-take from the balancing zone needs to be allocated into a
‘balancing portfolio’
• Daily balancing with full cash-out and application of tolerances for penalties
• No within-day obligations
• No mandatory balanced nominations and self-balancing after the end of the day
• No end-consumer nominations but Supply register
• Information provision model: base case
• DSOs as forecasting parties

3. BALANCING PORTFOLIO

4. NOMINATION, RENOMINATION, ALLOCATION: TIME FRAMES
Initial allocation for IDM, DM
and NDM off-takes
Renomination
(renomination cycle every hour within
the re-nomination period)
Confirmed quantity
(within two hours from the start of each
re-nomination cycle)
Nomination
1. Update of forecast of NDM off-takes
2. IDM measured flows
Initial allocation, initial imbalance
quantity and initial imbalance charge
М+1
13:00
15:00
17:00
13:00
17:00
04:00
17:00
18:00
07:00
Forecast of NDM off-takes
D-1 07:00 D 07:00
D+1
Final allocation /
Final imbalance charge D+9 M+1
Invoicing (imbalance charge) D+14 M+1
Financial settlement D+20 M+1
Invoicing (neutrality charge) D+23 M+1
Financial settlement D+30 M+1

5. SUPPLY REGISTER
SUPPLY REGISTER is the centralized information exchange system that contains
data of effective Points of Delivery (all end-consumers EIC’s) and provides to Network
User metering point information, profiles and forecasts.
Functions:
• metering data collection and reporting;
• profiling;
• forecasting;
• support of supplier switching;
• determination of the non-supplied end-consumer to be disconnected.
Main aim – to provide transparent data access to Network User.
SUPPLY REGISTER speeds up, simplifies and clears complex market processes like
supplier switching or preparing settlement.
No end-consumer nominations but aggregated nomination for exit points to gas
distribution systems.

6. INFORMATION PROVISION MODEL
DSO
TSO
Network user
D-1
Forecast of NDM off-takes
Forwarding
Forecast of required inputs to cover
off-takes on D
D
Update of forecast of NDM off-takes
IDM measured flows
Forwarding
Forwarding
Forecast of required inputs to cover
off-takes on D
D+1
Initial allocation for NDM off-takes
Initial allocation for IDM and DM
Calculation of initial imbalance and
daily cash-out
Financial planning and securities
M+x
Final allocation for NDM off-takes
Final allocation for IDM and DM
Calculation of final imbalance and
invoicing
Financial settlement

7. ALLOCATIONS TO BALANCING PORTFOLIO
D-1/D D+1
M+x
Balancing Portfolio
Balancing Portfolio
Balancing Portfolio
Input
Off-take
Input
Off-take
Input
Off-take
VTP
Notifications D
Notifications D
Confirmed
quantity D
Confirmed
quantity D
Confirmed
quantity D
Confirmed
quantity D
IP
(Re)
Nominations D
(Re)
Nominations D
Confirmed
quantity D
Confirmed
quantity D
Confirmed
quantity D
Confirmed
quantity D
Stor.
(Re)
Nominations D
(Re)
Nominations D
Confirmed
quantity D
Confirmed
quantity D
Confirmed
quantity D
Confirmed
quantity D
Prod.
(Re)
Nominations D
—
Confirmed
quantity D
—
Confirmed
quantity D
—
IDM
DM
—
—
—
Initial
allocation D
—
Final
allocation D
NDM
—
Forecast
—
Initial
allocation D
—
Final
allocation D
Initial imbalance amount D
Final daily imbalance amount D
Remark: for simplicity trade notifications are also referred to as (re-)nominations

8. IMBALANCE QUANTITY, IMBALANCE CHARGE, APPLICABLE PRICE
Daily Imbalance Quantity
Daily Imbalance Quantity shall be shall be calculated as the difference between its Inputs to and Offtakes for each Gas Day:
• Inputs = Entry Allocations + VTP Buy Allocations
• Offtakes = Exit Allocations + VTP Sell Allocations
Daily Imbalance Charge
Daily Imbalance Charge shall be calculated by the TSO for each Network User for each Gas Day:
•Daily Imbalance Charge = Negative Daily Imbalance Quantity x Marginal Buy Price, or
•Daily Imbalance Charge = Positive Daily Imbalance Quantity x Marginal Sell Price.
Marginal Buy Price and a Marginal Sell Price
Marginal Sell Price is calculated as the lower of:
• the lowest price of any gas balancing trade to which the TSO is a party in respect of a balancing period, or
• the weighted average price of gas traded in respect of that day, minus Small Adjustment .
Marginal Buy Price is calculated as the higher of:
• the highest price of any gas balancing trade to which the TSO is a party in respect of a balancing period, or
• the weighted average price of gas traded in respect of that day, plus Small Adjustment.
Small Adjustment shall be equal to 10% for determination of applicable Marginal Sell Price or Marginal Buy Price.
Tolerance Limit is calculated for each Gas Day and equals 5% of Offtakes.
Daily Imbalance Charge shall not include Small Adjustment if Daily Imbalance Quantity does not exceeds Tolerance Limit.

9. FINANCIAL SECURITY
The Network User independently determines the size and form of his financial security for all its financial obligations to TSO
TSO shall verify the financial security of the Network User for the purpose of its sufficiency
Amount of
sufficient
financial
security
Total
amount of
financial
security
Accounted /
invoiced
fees/charges
M-1
Initial
imbalance
charge
1 st D to D
Initial
imbalance
charge
D
Irreducible
ammount of
financial
security
The volume of required financial security of the Network User cannot be less than zero.
20% of the cost of gas that can be transported in accordance with the total value of the
contracted capacity of the exit points to a gas distribution system and/or to a direct consumer,
which was allocated to the Network User for the gas month of transportation; or
Irreducible ammount of financial security -
maximum value of: :
20% of the cost of gas consumed by the the Network User’s Customers, registered by him in the
Supply Registry, in total for the previous gas month; or
20% of the cost of gas consumed by the Network User’s consumers registered by him in the Supply
Register for the corresponding gas month of the previous gas year.
The cost of natural gas shall be calculated on the basis of marginal buy price

10. NEUTRALITY MECHANISM
Cash inflow
Cash outflow
Selling of gas on balancing
platform
Purchase of gas on
balancing platform
Commodity prices of gas bought/sold on balancing
platform
Selling of imbalance
quantities beyond tolerance
Purchase of imbalance
quantities beyond tolerance
Settlement of quantities which exceed tolerance level
based on marginal prices and penalty
Selling of imbalance
quantities within tolerance
Purchase of imbalance
quantities within tolerance
Settlement of quantities within tolerance level with
‘neutral gas price’ to achieve full daily cash-out
Interest gains
Interest payments
Interest paid/received for account balance
Neutrality charge
Other costs of balancing
Liquidity reserve
Transaction fees, financing costs, compensation of
payment defaults and income neutrality charge
Cash reserve to compensate for plan-actual deviations,
payment delays, etc. and to ensure sufficient account
balance
Neutrality account balance

Thank you for your attention!
Roman Shykerynets
Head of Methodology and Project Division
PJSC UKRTANSGAZ
shikerinetc-ri@utg.ua
0(50) 373-49-36
0(44) 461-28-35

ADDITIONAL SLIDES
1. INFORMATION PROVISION MODEL
1.1. DAILY BALANCING CYCLE: M-x
1.2. DAILY BALANCING CYCLE: D-1
1.3. DAILY BALANCING CYCLE: D
1.4. DAILY BALANCING CYCLE: D+1
1.5. DAILY BALANCING CYCLE: M+x
2. SUPPLIER SWITCHING PROCESS

1.1. DAILY BALANCING CYCLE: M-x
TSO
GTS operator
Disconnection of non-supplied EICs
(direct consumers)
5
DSO
Registration of supplied EICs
3
Balancing entity /
Supplier register
Register of EICs
1
Forecasting party
Network user
VTP operator
4
Distribution system
operator
2
Check suppliers registration and
supplies switching (if applicable)
Register of
supplied EICs
SSO
Disconnection of
non-supplied EICs
5
Consumer
PSO

1.2. DAILY BALANCING CYCLE: D-1
Forecasting of
necessary input to
balance portfolio
3
Entry/exit nomination
4
TSO
GTS operator
Forecasts for NDM
Forecast for NDM off-takes
off-takes
Balancing entity /
2 1
Supplier register
DSO
Forecasting party
Network user
Entry/exit nomination
4
VTP operator
Distribution system
operator
Confirmed quantity
6
Entry/exit nomination
4
SSO
6 Matching
PSO

1.3. DAILY BALANCING CYCLE: D
Update of forecast
of necessary input
to balance portfolio
3
Entry/exit renomination
4
Forecast update for NDM off-takes
Information on IDM off-takes
2
TSO
GTS operator
Balancing entity /
Supplier register
Forecasts update
for NDM off-takes
1a
DSO
Forecasting party
Network user
Entry/exit renomination
4
VTP operator
1b
Distribution system
operator
Confirmed quantity
6
Information on IDM
off-takes
Entry/exit renomination
4
SSO
6 Matching
PSO

1.4. DAILY BALANCING CYCLE: D+1
Initial allocations,
initial imbalance quantity and
imbalance charges for D
TSO
GTS operator
Allocations of confirmed quantities
and Initial allocations of
IDM/DM off-takes
1c
Initial allocations
of NDM off-takes
Balancing entity /
3 1a
Supplier register
DSO
Forecasting party
Network user
2
Calculation of initial imbalance
quantity and imbalance
charges for D
VTP operator
1d
Allocations of
confirmed trade
notifications
1b
Initial allocations
of IDM/DM offtakes
Distribution system
operator
SSO
PSO

1.5. DAILY BALANCING CYCLE: M+x
Final allocations,
final imbalance quantity and
imbalance charges for each D of M
TSO
GTS operator
Final allocations of
IDM/DM off-takes
Final allocations of
NDM off-takes
Balancing entity /
3 1a 1
Supplier register
1c
DSO
Forecasting party
Network user
2
Calculation of final imbalance
quantity and imbalance
charges for each D of M
VTP operator
1b
Final allocations
of IDM/DM offtakes
Distribution system
operator
SSO
PSO

2. SUPPLIER SWITCHING PROCESS
Regulator
Old Supplier Consumer
New Supplier
TSO DSO
Signs contract with
new supplier
Signs contract with
new supplier
Information on
change of supplier
Information on
change of supplier
Information on
change of supplier
1) confirmation of
change of supplier
2) rejection of
change of supplier
Confirmation of
registration
Rejection of registration
1) confirmation of
registration
2) rejection of
registration
Decision
Appeal
Execution of decision
Register of
non-supplied EICs
Refusal from customer:
1) with disconnection;
2) without disconnection
Refusal from customer
Order to disconnect
Disconnection
Meter value on date of
switch
Meter value on date of
switch
Meter value on date of
switch
Meter value on date of
switch
Receives meter value
on date of switch
Meter value on date of
switch