Core CCR TSOs’ proposal for the regional design of long-term transmission rights in accordance with Article 31 of Commission

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BETREFT Voorstel van Core TSOs voor het regionale ontwerp van langetermijnrechten betreffende de transmissie op basis van artikel 31 van de Verordening (EU) 2016/1719 (GL FCA)

Geachte heer Don,

Hierbij ontvangt u het voorstel voor de langetermijnrechten betreffende de transmissie dat door de gezamen- Iijke Core TSO's is opgesteld op basis van de Verordening (EU) 2016/1719 van 26 september 2016 tot vast- stelling van richtsnoeren betreffende capaciteitstoewijzing op de langere termijn (afgekort: GL FCA):

. "Core TSOs’ proposal for the regional design of long-term transmission rights in accordance with Article 31 of Commission Regulation (EU) 2016/1719" dd. 13 april 2017.

Bij het voorstel is een Explanatory Document gevoegd, waarin tevens verantwoording wordt afgelegd over de venNerking van de resultaten van de raadpleging die overeenkomstig artikel 6 van de GL FCA is gehou- den.

Het voorstel bevat geen vertrouwelijke gegevens en kan integraal door u gepubliceerd worden.

U wordt verzocht dit voorstel vast te stellen krachtens artikel 4, vijfde lid, van de GL FCA.

Hoogachtend, TenneT TSO B.

Jan-Paul Dijckmans

Senior Manager Regulation NL

Openbare versie

15139331] 45-

Postbus 718, 6800 AS Arnhem, Nederland DATUM 14 april 2017

Autoriteit Consument en Markt UW REFERENTIE

T.a.v. de heer dr, F_J_H‘ Don ONZE REFERENTIE REC-N 17-019

Postbus 16326 BEHANDELD noon —

2500 EH DEN HAAG TELEFOON maecr —

E-MAIL -i@tennet.eu

BETREFT Voorstel van Core TSOs voor het regionale ontwerp van langetermijnrechten betreffende de transmissie op basis van artikel 31 van de Verordening (EU) 2016/1719 (GL FCA)

Geachte heer Don,

Hierbij ontvangt u het voorstel voor de langetermijnrechten betreffende de transmissie dat door de gezamen- Iijke Core TSO's is opgesteld op basis van de Verordening (EU) 2016/1719 van 26 september 2016 tot vast- stelling van richtsnoeren betreffende capaciteitstoewijzing op de langere termijn (afgekort: GL FCA):

. "Core TSOs’ proposal for the regional design of long-term transmission rights in accordance with Article 31 of Commission Regulation (EU) 2016/1719" dd. 13 april 2017.

Bij het voorstel is een Explanatory Document gevoegd, waarin tevens verantwoording wordt afgelegd over de venNerking van de resultaten van de raadpleging die overeenkomstig artikel 6 van de GL FCA is gehou- den.

Het voorstel bevat geen vertrouwelijke gegevens en kan integraal door u gepubliceerd worden.

U wordt verzocht dit voorstel vast te stellen krachtens artikel 4, vijfde lid, van de GL FCA.

Hoogachtend, TenneT TSO B.

Jan-Paul Dijckmans

Senior Manager Regulation NL

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Core CCR TSOs’ proposal for the regional design of long-term transmission rights in accordance with Article 31 of Commission

Regulation (EU) 2016/1719

13 April 2017

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Core CCR TSOs’ proposal for the regional design of long-term transmission rights in accordance with Article 31 of Commission

Regulation (EU) 2016/1719

13 April 2017

“J A—

4% Amprion ADI: creos Ceplp‘s. IiELES @ﬁ’a" M'Hops

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Core CCR TSOs’ proposal for the regional design of long-term transmission rights in accordance with Article 31 of Commission

Regulation (EU) 2016/1719

13 April 2017

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Table of Contents

Whereas ... 3

Article 1 Subject matter and scope ... 4

Article 2 Definitions and interpretation ... 4

Article 3 General principles ... 4

Article 4 Bidding zone borders covered ... 5

Article 5 Type of long-term transmission rights ... 5

Article 6 Forward capacity time frames ... 6

Article 7 Form of product ... 6

Article 9 Language ... 7

Table of Contents Whereas ... 3

Article 2 Deﬁnitions and interpretation ... 4

Article 6 Forward capacity time frames... 6

Article 9 Language... 7

Table of Contents Whereas ... 3

Article 2 Deﬁnitions and interpretation ... 4

Article 6 Forward capacity time frames... 6

Article 9 Language... 7

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TSOs of the Core CCR, taking into account the following,

Whereas

(1) The European Commission has established Regulation (EU) 2016/1719 laying down detailed rules on cross-zonal capacity allocation in the forward markets (hereinafter referred to as the “FCA Regulation”), which entered into force on 17 October 2016.

(2) Article 31 of the FCA Regulation requires TSOs of a capacity calculation region (CCR), where long-term transmission rights exist, to jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the CCR (hereafter referred to as "Core CCR TSOs' LTR proposal).

(3) No later than six months after entry force of the FCA Regulation or no later than six months after respective decision by the NRAs of the CCR to introduce long- term transmission rights in accordance with Article 30 (2) of the FCA Regulation, the TSO proposal shall be submitted to the regulatory authorities of the capacity region in accordance with Article 4 of the FCA Regulation.

(4) This is a joint proposal by the TSOs of the Core CCR, as defined in the decision No 06/2016 of the Agency on 17 November 2016 pursuant to Article 15(1) of the Commission Regulation (EU) 2015/1222.

(5) Article 4(8) of the FCA Regulation requires that the expected impact of this proposal on the objectives of the FCA Regulation is described. The Core CCR TSOs’ LTR proposal contributes to and does not in any way hinder the achievement of the objectives of Article 3 of FCA Regulation. The impact is presented below in point 6 of this Whereas section.

(6) This Product Proposal identifies a clearly defined range of long-term transmission rights that can be offered across Core CCR bidding zone borders.

A clearly defined list of long-term transmission rights provides a consistent product across a range of bidding zone borders and supports flexible range of options for cross-zonal hedging opportunities (objective 3a and 3f)on a non- discriminatory basis subject to them meeting market requirements for participation (objective 3c).

Submit the following proposal to the national regulatory authorities of the Core CCR:

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Whereas

The European Commission has established Regulation (EU) 2016/1719 laying down detailed rules on cross-zonal capacity allocation in the forward markets (hereinafter referred to as the “FCA Regulation”), which entered into force on 17 October 2016.

Article 31 of the FCA Regulation requires TSOs of a capacity calculation region (CCR), where long-term transmission rights exist, to jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the OCR (hereafter referred to as "Core CCR TSOs' LTR proposal).

No later than six months after entry force of the FCA Regulation or no later than six months after respective decision by the NRAs of the OCR to introduce long- term transmission rights in accordance with Article 30 (2) of the FCA Regulation, the T80 proposal shall be submitted to the regulatory authorities of the capacity region in accordance with Article 4 of the FCA Regulation.

This is a joint proposal by the TSOs of the Core CCR, as defined in the decision No 06/2016 of the Agency on 17 November 2016 pursuant to Article 15(1) of the Commission Regulation (EU) 2015/1222.

Article 4(8) of the FCA Regulation requires that the expected impact of this proposal on the objectives of the FCA Regulation is described. The Core CCR TSOs’ LTR proposal contributes to and does not in any way hinder the achievement of the objectives of Article 3 of FCA Regulation. The impact is presented below in point 6 of this Whereas section.

This Product Proposal identifies a clearly defined range of long-term transmission rights that can be offered across Core CCR bidding zone borders.

A clearly defined list of long-term transmission rights provides a consistent product across a range of bidding zone borders and supports flexible range of options for cross-zonal hedging opportunities (objective 3a and 3f)on a non- discriminatory basis subject to them meeting market requirements for participation (objective 30).

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Whereas

The European Commission has established Regulation (EU) 2016/1719 laying down detailed rules on cross-zonal capacity allocation in the forward markets (hereinafter referred to as the “FCA Regulation”), which entered into force on 17 October 2016.

Article 31 of the FCA Regulation requires TSOs of a capacity calculation region (CCR), where long-term transmission rights exist, to jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the OCR (hereafter referred to as "Core CCR TSOs' LTR proposal).

No later than six months after entry force of the FCA Regulation or no later than six months after respective decision by the NRAs of the OCR to introduce long- term transmission rights in accordance with Article 30 (2) of the FCA Regulation, the T80 proposal shall be submitted to the regulatory authorities of the capacity region in accordance with Article 4 of the FCA Regulation.

This is a joint proposal by the TSOs of the Core CCR, as defined in the decision No 06/2016 of the Agency on 17 November 2016 pursuant to Article 15(1) of the Commission Regulation (EU) 2015/1222.

Article 4(8) of the FCA Regulation requires that the expected impact of this proposal on the objectives of the FCA Regulation is described. The Core CCR TSOs’ LTR proposal contributes to and does not in any way hinder the achievement of the objectives of Article 3 of FCA Regulation. The impact is presented below in point 6 of this Whereas section.

This Product Proposal identifies a clearly defined range of long-term transmission rights that can be offered across Core CCR bidding zone borders.

A clearly defined list of long-term transmission rights provides a consistent product across a range of bidding zone borders and supports flexible range of options for cross-zonal hedging opportunities (objective 3a and 3f)on a non- discriminatory basis subject to them meeting market requirements for participation (objective 30).

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Article 1

Subject matter and scope

1. This document is the Core CCR TSOs’ LTR proposal required by Article 31 of the FCA regulation.

2. This Core CCR TSOs’ LTR proposal is subject to approval in accordance with Article 4.7.(c) of the FCA Regulation.

3. The amount of cross-zonal capacity to be offered on each bidding zone border shall be determined in accordance with the methodology for calculating long-term capacity required by Article 10 of the FCA Regulation and the methodology for splitting long-term cross-zonal capacity required by Article 16 of the FCA Regulation from such a time these methodologies have been approved and implemented.

4. Long-term transmission rights as discussed in this proposal shall be offered by all TSOs within the Core CCR to market participants through the single allocation platform established in accordance with Article 48 of the FCA Regulation.

5. Long-term transmission rights as discussed in this Core CCR TSOs' LTR proposal shall be allocated with respect to harmonized allocation rules according to Article 51 of the FCA Regulation.

Article 2

Definitions and interpretation

1. Terms used in this Core CCR TSOs’ LTR proposal shall have the meanings defined in Article 2 of the FCA regulation, Article 2 of Regulation (EU) 2015/1222, Article 2 of Regulation (EC) No 714/2009, Article 2 of Commission Regulation (EU) No 543/2013 as well as Article 2 of Directive 2009/72/EC of the European Parliament and of the Council.

2. In this Core CCR TSOs’ LTR proposal, unless the context requires otherwise:

a. the singular includes the plural and vice versa;

b. the table of contents and headings are inserted for convenience only and do not affect the interpretation of this Core CCR TSOs’ LTR proposal;

c. references to an “Article” are, unless otherwise stated, references to an article of this Core CCR TSOs’ LTR proposal; and

d. any reference to legislation, regulations, directive, order, instrument, code or any other enactment shall include any modification, extension or re- enactment of it then in force.

Article 3 General principles

1. The proposed design of long-term transmission rights aims at a harmonized and simple design of long-term transmission rights within the Core CCR in order to promote the objectives set out in Article 3 of the FCA Regulation.

Article 1

Subject matter and scope

This document is the Core CCR TSOs' LTR proposal required by Article 31 of the FCA regulation.

This Core CCR TSOs’ LTR proposal is subject to approval in accordance with Article 4.7.(c) of the FCA Regulation.

The amount of cross-zonal capacity to be offered on each bidding zone border shall be determined in accordance with the methodology for calculating long-term capacity required by Article 10 of the FCA Regulation and the methodology for splitting long-term cross-zonal capacity required by Article 16 of the FCA Regulation from such a time these methodologies have been approved and implemented.

Long-term transmission rights as discussed in this proposal shall be offered by all TSOs within the Core CCR to market participants through the single allocation platform established in accordance with Article 48 of the FCA Regulation.

Long-term transmission rights as discussed in this Core CCR TSOs' LTR proposal shall be allocated with respect to harmonized allocation rules according to Article 51 of the FCA Regulation.

Article 2

Definitions and interpretation

Terms used in this Core CCR TSOs' LTR proposal shall have the meanings defined in Article 2 of the FCA regulation, Article 2 of Regulation (EU) 2015/1222, Article 2 of Regulation (EC) No 714/2009, Article 2 of Commission Regulation (EU) No 543/2013 as well as Article 2 of Directive 2009/72/EC of the European Parliament and of the Council.

In this Core CCR TSOs’ LTR proposal, unless the context requires otherwise:

0. references to an “Article" are, unless othenNise stated, references to an article of this Core CCR TSOs’ LTR proposal; and

Article 3 General principles

The proposed design of long-term transmission rights aims at a harmonized and simple design of long-term transmission rights within the Core CCR in order to promote the objectives set out in Article 3 of the FCA Regulation.

Article 1

Subject matter and scope

This document is the Core CCR TSOs' LTR proposal required by Article 31 of the FCA regulation.

This Core CCR TSOs’ LTR proposal is subject to approval in accordance with Article 4.7.(c) of the FCA Regulation.

The amount of cross-zonal capacity to be offered on each bidding zone border shall be determined in accordance with the methodology for calculating long-term capacity required by Article 10 of the FCA Regulation and the methodology for splitting long-term cross-zonal capacity required by Article 16 of the FCA Regulation from such a time these methodologies have been approved and implemented.

Long-term transmission rights as discussed in this proposal shall be offered by all TSOs within the Core CCR to market participants through the single allocation platform established in accordance with Article 48 of the FCA Regulation.

Long-term transmission rights as discussed in this Core CCR TSOs' LTR proposal shall be allocated with respect to harmonized allocation rules according to Article 51 of the FCA Regulation.

Article 2

Definitions and interpretation

Terms used in this Core CCR TSOs' LTR proposal shall have the meanings defined in Article 2 of the FCA regulation, Article 2 of Regulation (EU) 2015/1222, Article 2 of Regulation (EC) No 714/2009, Article 2 of Commission Regulation (EU) No 543/2013 as well as Article 2 of Directive 2009/72/EC of the European Parliament and of the Council.

In this Core CCR TSOs’ LTR proposal, unless the context requires otherwise:

0. references to an “Article" are, unless othenNise stated, references to an article of this Core CCR TSOs’ LTR proposal; and

Article 3 General principles

The proposed design of long-term transmission rights aims at a harmonized and simple design of long-term transmission rights within the Core CCR in order to promote the objectives set out in Article 3 of the FCA Regulation.

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2. The bidding zone borders covered by the regional design of long-term transmission rights are set out in Article 4 of this Core CCR TSOs' LTR proposal.

Article 4

Bidding zone borders covered

1. The bidding zone borders covered by this regional design of long-term transmission rights include all borders between two bidding zones, which are part of the Core CCR.

2. The regional design of long-term transmission rights does not apply to bidding zone borders for which the competent regulatory authorities have adopted coordinated decisions not to issue long-term transmission rights in accordance with Article 30(1) of the FCA Regulation.

3. In case of the introduction of new bidding zone borders or the deletion of bidding zone borders within the Core CCR, the Core CCR TSOs’ LTR proposal shall be amended accordingly, as set out in Article 9 (12) of the FCA Regulation.

Article 5

Type of long-term transmission rights

1. The type of long-term transmission rights applied for relevant individual bidding zone borders covered by this Core CCR TSO’s LTR proposal shall be FTRs - options or physical transmission rights pursuant to the UIOSI principle.

2. The type of long-term transmission rights that shall be applied on each bidding zone border covered by this Core CCR TSO’s LTR proposal is defined in the Table I (see next page).

The bidding zone borders covered by the regional design of long-term transmission rights are set out in Article 4 of this Core CCR TSOs' LTR proposal.

Article 4

Bidding zone borders covered

The bidding zone borders covered by this regional design of long-term transmission rights include all borders between two bidding zones, which are part of the Core CCR.

The regional design of long-term transmission rights does not apply to bidding zone borders for which the competent regulatory authorities have adopted coordinated decisions not to issue long-term transmission rights in accordance with Article 30(1) of the FCA Regulation.

In case of the introduction of new bidding zone borders or the deletion of bidding zone borders within the Core CCR, the Core CCR TSOs’ LTR proposal shall be amended accordingly, as set out in Article 9 (12) of the FCA Regulation.

Article 5

Type of long-term transmission rights

The type of long-term transmission rights applied for relevant individual bidding zone borders covered by this Core CCR TSO’s LTR proposal shall be FTRs - options or physical transmission rights pursuant to the UIOSI principle.

The type of long-term transmission rights that shall be applied on each bidding zone border covered by this Core CCR TSO’s LTR proposal is defined in the Table | (see next page).

The bidding zone borders covered by the regional design of long-term transmission rights are set out in Article 4 of this Core CCR TSOs' LTR proposal.

Article 4

Bidding zone borders covered

The bidding zone borders covered by this regional design of long-term transmission rights include all borders between two bidding zones, which are part of the Core CCR.

The regional design of long-term transmission rights does not apply to bidding zone borders for which the competent regulatory authorities have adopted coordinated decisions not to issue long-term transmission rights in accordance with Article 30(1) of the FCA Regulation.

In case of the introduction of new bidding zone borders or the deletion of bidding zone borders within the Core CCR, the Core CCR TSOs’ LTR proposal shall be amended accordingly, as set out in Article 9 (12) of the FCA Regulation.

Article 5

Type of long-term transmission rights

The type of long-term transmission rights applied for relevant individual bidding zone borders covered by this Core CCR TSO’s LTR proposal shall be FTRs - options or physical transmission rights pursuant to the UIOSI principle.

The type of long-term transmission rights that shall be applied on each bidding zone border covered by this Core CCR TSO’s LTR proposal is defined in the Table | (see next page).

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Table I Long-term transmission rights type of each Core bidding zone border

Core CCR borders Type of long-term transmission right

NL-BE FTR- options

NL-DE/LU Physical transmission rights pursuant to UIOSI principle

BE-FR FTR- options

BE-DE/LU No LTRsdefined yet

FR-DE/LU Physical transmission rights pursuant to UIOSI principle PL-DE/LU Physical transmission rights pursuant to UIOSI principle PL-CZ Physical transmission rights pursuant to UIOSI principle CZ-DE/LU Physical transmission rights pursuant to UIOSI principle PL-SK Physical transmission rights pursuant to UIOSI principle

AT-DE/LU¹ No LTRsdefined yet

AT-CZ Physical transmission rights pursuant to UIOSI principle AT-SI Physical transmission rights pursuant to UIOSI principle SI-HR Physical transmission rights pursuant to UIOSI principle HR-HU Physical transmission rights pursuant to UIOSI principle AT-HU Physical transmission rights pursuant to UIOSI principle HU-SK Physical transmission rights pursuant to UIOSI principle HU-RO Physical transmission rights pursuant to UIOSI principle

CZ-SK No LTRsdefined yet

SI-HU² Physical transmission rights pursuant to UIOSI principle

Article 6

Forward capacity time frames

Long-term transmission rights shall be issued for the forward capacity time frames month and year.

Article 7 Form of product

1. Long-term transmission rights shall be issued in form of base load products with a fixed amount of MW over the product period.

2. The product form may include reduction periods, i.e. specific calendar days and/or hours within the product period, in which Cross Zonal Capacities with a reduced amount of MW are offered, taking into account a foreseen specific network situation (e.g. planned maintenance, long-term outages, foreseen balancing problems).

1AT-DE/LU bidding zone border will become effective according to Annex 1 Article 5 point 3 of CCR decision (ACER Decision No 06/2016).

2SI-HU bidding zone border will become effective according to Annex 1 Article 5 point 4 of CCR decision (ACER Decision No 06/2016).

Table l Long-term transmission rights type of each Core bidding zone border

Core CCR borders Type of long-term transmission right

NL'BE FTR- options

NL'DE/LU Physical transmission rights pursuant to UIOSI principle

BE'FR FTR- options

BE'DE/LU No LTRs defined yet

FR-DEILU Physical transmission rights pursuant to UIOSI principle PL-DEILU Physical transmission rights pursuant to UIOSI principle PL-CZ Physical transmission rights pursuant to UIOSI principle CZ-DEILU Physical transmission rights pursuant to UIOSI principle p|_-SK Physical transmission rights pursuant to UIOSI principle

AT'DE/LU1 No LTRs defined yet

AT-CZ Physical transmission rights pursuant to UIOSI principle AT-Sl Physical transmission rights pursuant to UIOSI principle Sl-HR Physical transmission rights pursuant to UIOSI principle HR-HU Physical transmission rights pursuant to UIOSI principle AT-HU Physical transmission rights pursuant to UIOSI principle HU-SK Physical transmission rights pursuant to UIOSI principle HU-RO Physical transmission rights pursuant to UIOSI principle

CZ'SK No LTRs defined yet

SI'HUZ Physical transmission rights pursuant to UIOSI principle

Article 6

Forward capacity time frames

Long-term transmission rights shall be issued for the fonlvard capacity time frames month and year.

Article 7 Form of product

1 AT—DE/LU bidding zone border will become effective according to Annex 1 Article 5 point 3 of CCR decision (ACER Decision No 06/2016).

2 Sl-HU bidding zone border will become effective according to Annex 1 Article 5 point 4 of CCR decision (ACER Decision No 06/2016).

Table l Long-term transmission rights type of each Core bidding zone border

Core CCR borders Type of long-term transmission right

NL'BE FTR- options

NL'DE/LU Physical transmission rights pursuant to UIOSI principle

BE'FR FTR- options

BE'DE/LU No LTRs defined yet

FR-DEILU Physical transmission rights pursuant to UIOSI principle PL-DEILU Physical transmission rights pursuant to UIOSI principle PL-CZ Physical transmission rights pursuant to UIOSI principle CZ-DEILU Physical transmission rights pursuant to UIOSI principle p|_-SK Physical transmission rights pursuant to UIOSI principle

AT'DE/LU1 No LTRs defined yet

AT-CZ Physical transmission rights pursuant to UIOSI principle AT-Sl Physical transmission rights pursuant to UIOSI principle Sl-HR Physical transmission rights pursuant to UIOSI principle HR-HU Physical transmission rights pursuant to UIOSI principle AT-HU Physical transmission rights pursuant to UIOSI principle HU-SK Physical transmission rights pursuant to UIOSI principle HU-RO Physical transmission rights pursuant to UIOSI principle

CZ'SK No LTRs defined yet

SI'HUZ Physical transmission rights pursuant to UIOSI principle

Article 6

Forward capacity time frames

Long-term transmission rights shall be issued for the fonlvard capacity time frames month and year.

Article 7 Form of product

1 AT—DE/LU bidding zone border will become effective according to Annex 1 Article 5 point 3 of CCR decision (ACER Decision No 06/2016).

2 Sl-HU bidding zone border will become effective according to Annex 1 Article 5 point 4 of CCR decision (ACER Decision No 06/2016).

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3. Where the product to be auctioned includes reduction periods, the auction specification shall include for each reduction period information on the duration of the reduction period and the amount of offered capacities.

Article 8

Implementation timeline

1. The regional design of long-term transmission rights shall be implemented on all bidding zone borders of Core CCR where long term transmission rights existed at the time of entry into force of the FCA Regulation no later than for the first auction for the time frame 2019.

2. On bidding zone borders where long term transmission rights did not exist at the time of entry into force of the FCA Regulation, the regional design of long- term transmission rights shall be implemented after competent regulatory authorities have adopted coordinated decisions to issue long-term transmission rights in accordance with Article 30(2) of the FCA Regulation on respective borders.

Article 9 Language

1. The reference language for this proposal shall be English. For the avoidance of doubt, where TSOs need to translate this proposal into their national language(s), in the event of inconsistencies between the English version published by TSOs in accordance with Article 4(13) of Regulation 2016/1719 and any version in another language the relevant TSO shall, in accordance with national legislation, provide the relevant national regulatory authorities with an updated translation of the proposal.

.AnkﬂeB

Implementation timeline

Article 9 Language

.AnkﬂeB

Implementation timeline

Article 9 Language

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Explanatory Document to Core CCR TSOs’

proposal for the regional design of long-term transmission rights in accordance with Article

31 of Commission Regulation (EU) 2016/1719

13 April 2017

DISCLAIMER

This document is submitted by all Core transmission system operators (TSOs) to all Core NRAs for information purposes only accompanying the Core TSOs’ proposal for regional design of long-term transmission rights in accordance with Article 31 of Commission Regulation (EU) No 2016/1719 of 26 September 2016 establishing a Guideline on Forward Capacity Allocation (“FCA Regulation”).

Explanatory Document to Core CCR TSOs’

proposal for the regional design of long-term transmission rights in accordance with Article

31 of Commission Regulation (EU) 2016/1719

13 April 2017

DISCLAIMER

Explanatory Document to Core CCR TSOs’

proposal for the regional design of long-term transmission rights in accordance with Article

31 of Commission Regulation (EU) 2016/1719

13 April 2017

DISCLAIMER

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Content

1. Introduction ... 2 2. Relation of Core CCR TSOs' LTR proposal to the harmonized allocation rules ... 2 3. Explanation on changing type of long-term transmission rights ... 3 4. Implemetation timeline ... 4 5. Assessment of stakeholders’ comments ... 4

1. Introduction

This explanatory note is written to provide information and clarification in the choices made in the "Core CCR TSOs’ proposal for the regional design of long-term transmission rights in accordance with Article 31 of Commission Regulation (EU) 2016/1719" (hereafter "the Core CCR TSOs’ LTR proposal").

This explanatory note is published to support the consultation of the Core CCR TSOs’ LTR proposal and it is submitted to the relevant regulatory authorities.

In case of discrepancies between the explanatory note and the Core CCR TSOs' LTR proposal, the Core CCR TSOs' LTR proposal shall prevail.

Terms used in this document are understood as defined in (i) the FCA Regulation, Regulation (EC) No714/2009 of the European Parliament and of the Council of 13 July 2009 on conditions for access to the network for cross-border exchanges in electricity (“Regulation (EC) No 714/2009”) and (ii) CACM Regulation, Regulation (EC) No 714/2009 of the European Parliament and Commission Regulation (EU) No 543/2013 of 14 June 2013 on submission and publication of data in electricity markets and amending Annex I to Regulation (EC) No 714/2009 of the European Parliament and of the Council.

2. Relation of Core CCR TSOs' LTR proposal to the harmonized allocation rules

The FCA Regulation requires a description of the type of long-term transmission rights on each bidding zone border in the provisions of the Core CCR TSO's LTR proposal for the regional design of long-term transmission rights (Article 31) and in the provisions for the harmonized allocation rules (Article 52).

Content

1. Introduction ... 2 2. Relation of Core CCR TSOs' LTR proposal to the harmonized allocation rules...2 3. Explanation on changing type of long-term transmission rights ... 3 4. lmplemetation timeline ... 4 5. Assessment of stakeholders’ comments ... 4

1. Introduction

2. Relation of Core CCR TSOs' LTR proposal to the harmonized allocation rules

The FCA Regulation requires a description of the type of long-term transmission rights on each bidding zone border in the provisions of the Core CCR TSO's LTR proposal for the regional design of long-term transmission rights (Article 31) and in the provisions for the harmonized allocation rules (Article 52).

Content

1. Introduction ... 2 2. Relation of Core CCR TSOs' LTR proposal to the harmonized allocation rules...2 3. Explanation on changing type of long-term transmission rights ... 3 4. lmplemetation timeline ... 4 5. Assessment of stakeholders’ comments ... 4

1. Introduction

2. Relation of Core CCR TSOs' LTR proposal to the harmonized allocation rules

The FCA Regulation requires a description of the type of long-term transmission rights on each bidding zone border in the provisions of the Core CCR TSO's LTR proposal for the regional design of long-term transmission rights (Article 31) and in the provisions for the harmonized allocation rules (Article 52).

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proposal. In this understanding the harmonized allocation rules determine the way how long- term transmission rights (physical transmission rights and financial transmission rights) are allocated and not e.g. what type of long-term transmission rights are allocated on each border.

This decision is also in line with ACERs shadow opinion from 23 February 2017 regarding the all TSOs' proposal on harmonized allocation rules (Section 3.1):

„The type of LTTR to be allocated per border is part of the proposals on the regional design of LTTRs to be developed by each CCR. The information should be deleted from the HAR as this may pre-empt future decisions on regional design of LTTRs”

FCA Regulation Article 31-3:

"[…] TSOs in each capacity calculation region […] shall jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the capacity calculation region.[…]"

FCA Regulation, Article 31-4:

"The proposals referred to in paragraph 3 shall include a time schedule for implementation and at least the description of the following items specified in the allocation rules:

a) type of long-term transmission rights;

b) forward capacity allocation time frames;

c) form of product (base load, peak load, off-peak load);

d) the bidding zone borders covered."

"The harmonised allocation rules for long-term transmission rights shall follow the principles of non-discrimination and transparency and at least contain the following general requirements:[…]

d) a description of the types of long-term transmission rights which are offered, including the remuneration principles pursuant to Article 35; […]"

"The harmonised allocation rules may also contain regional or bidding zone border specific requirements in particular for, but without limitation to: […]

a) the description of the type of long-term transmission rights which are offered on each bidding zone border within the capacity calculation region pursuant to Article 31; […]"

3. Explanation on changing type of long-term transmission rights

To change the type of long-term transmission rights on a bidding zone border as specified in Article 5 of this Core CCR TSOs' LTR proposal the amendment provisions of Article 4-12 of the FCA Regulation apply. This means that TSOs and NRAs may propose changes in the LTR design, but all Core CCR NRAs need to approve the proposed change within six months (FCA Regulation Article 4-7c and 9) from the submission of the amendment proposal.

proposal. In this understanding the harmonized allocation rules determine the way how long- term transmission rights (physical transmission rights and financial transmission rights) are allocated and not e.g. what type of long-term transmission rights are allocated on each border.

,, The type of LTTR to be allocated per border is part of the proposals on the regional design of LTTRs to be developed by each CCR. The information should be deleted from the HAR as this may pre-empt future decisions on regional design of LTTRs”

"[...] TSOs in each capacity calculation region [...] shall jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the capacity calculation region.[...]"

" The proposals referred to in paragraph 3 shall include a time schedule for implementation and at least the description of the following items speciﬁed in the allocation rules:

a) type of long-term transmission rights;

b) forward capacity allocation time frames;

0) form of product (base load, peak load, off-peak load);

d) the bidding zone borders covered."

" The harmonised allocation rules for long-term transmission rights shall follow the principles of non-discrimination and transparency and at least contain the following general requirements:[. . .]

d) a description of the types of long-term transmission rights which are offered, including the remuneration principles pursuant to Article 35; [...]“

" The harmonised allocation rules may also contain regional or bidding zone border speciﬁc requirements in particular for, but without limitation to: [...]

a) the description of the type of long-term transmission rights which are offered on each bidding zone border within the capacity calculation region pursuant to Article 31; [. . .]"

3. Explanation on changing type of long-term transmission rights

To change the type of long-term transmission rights on a bidding zone border as specified in Article 5 of this Core CCR TSOs' LTR proposal the amendment provisions of Article 4-12 of the FCA Regulation apply. This means that TSOs and NRAs may propose changes in the LTR design, but all Core CCR NRAs need to approve the proposed change within six months (FCA Regulation Article 4-70 and 9) from the submission of the amendment proposal.

proposal. In this understanding the harmonized allocation rules determine the way how long- term transmission rights (physical transmission rights and financial transmission rights) are allocated and not e.g. what type of long-term transmission rights are allocated on each border.

,, The type of LTTR to be allocated per border is part of the proposals on the regional design of LTTRs to be developed by each CCR. The information should be deleted from the HAR as this may pre-empt future decisions on regional design of LTTRs”

"[...] TSOs in each capacity calculation region [...] shall jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the capacity calculation region.[...]"

" The proposals referred to in paragraph 3 shall include a time schedule for implementation and at least the description of the following items speciﬁed in the allocation rules:

a) type of long-term transmission rights;

b) forward capacity allocation time frames;

0) form of product (base load, peak load, off-peak load);

d) the bidding zone borders covered."

" The harmonised allocation rules for long-term transmission rights shall follow the principles of non-discrimination and transparency and at least contain the following general requirements:[. . .]

d) a description of the types of long-term transmission rights which are offered, including the remuneration principles pursuant to Article 35; [...]“

" The harmonised allocation rules may also contain regional or bidding zone border speciﬁc requirements in particular for, but without limitation to: [...]

a) the description of the type of long-term transmission rights which are offered on each bidding zone border within the capacity calculation region pursuant to Article 31; [. . .]"

3. Explanation on changing type of long-term transmission rights

To change the type of long-term transmission rights on a bidding zone border as specified in Article 5 of this Core CCR TSOs' LTR proposal the amendment provisions of Article 4-12 of the FCA Regulation apply. This means that TSOs and NRAs may propose changes in the LTR design, but all Core CCR NRAs need to approve the proposed change within six months (FCA Regulation Article 4-70 and 9) from the submission of the amendment proposal.

(12)

This amendment procedure is relevant as e.g. the type of long-term transmission rights on the Belgium borders recently changed from physical transmission rights to FTR Options and TSOs assessing the possibility to change also on other borders. As all Core CCR NRAs are required to approve any amendments, including changes on specific bidding zone borders, good and fast coordination of the amendment process is important to allow for progressive changes of the design of long-term transmission rights in the Core CCR, in accordance with local market needs.

4. Implemetation timeline

In the Core CCR a few bidding zone borders exist where no long-term transmission rights exist. Therefore Article 30-2 and Article 31-3 second sentence of the FCA Regulation apply.

FCA regulation Article 30-2:

"Where long-term transmission rights do not exist on a bidding zone border at the entry into force of this Regulation, the competent regulatory authorities of the bidding zone border shall adopt coordinated decisions on the introduction of long-term transmission rights no later than six months after the entry into force of this Regulation."

FCA regulation Article 31-3, second sentence:

"[…] No later than six months after the coordinated decisions of the regulatory authorities of the bidding zone border to introduce long-term transmission rights pursuant Article 30(2), TSOs of the concerned capacity calculation region, shall jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the concerned capacity calculation region.[…]"

The proposed implementation timeline of the Core CCR TSOs’ LTRs proposal Article 8 takes into account the decisions of competent regulatory authorities to issue long-term transmission rights in accordance with Article 30(1) of the FCA Regulation on respective borders. In case of new bidding zone borders such as BE-DE/LU, AT-DE/LU, CZ-SK, SI-HU the Core CCR TSOs LTR proposal needs to be amended accordingly and the implementation timeline is to be decided.

5. Assessment of stakeholders’ comments

In accordance with Article 31 of Commission Regulation (EU) 2016/1719 Core TSOs have elaborated on a LTR proposal which was then consulted upon between 10 March and 10 This amendment procedure is relevant as e.g. the type of long-term transmission rights on the Belgium borders recently changed from physical transmission rights to FTR Options and TSOs assessing the possibility to change also on other borders. As all Core CCR NRAs are required to approve any amendments, including changes on specific bidding zone borders, good and fast coordination of the amendment process is important to allow for progressive changes of the design of long-term transmission rights in the Core CCR, in accordance with local market needs.

4. lmplemetation timeline

In the Core CCR a few bidding zone borders exist where no long-term transmission rights exist. Therefore Article 30—2 and Article 31-3 second sentence of the FCA Regulation apply.

"Where long-term transmission rights do not exist on a bidding zone border at the entry into force of this Regulation, the competent regulatory authorities of the bidding zone border shall adopt coordinated decisions on the introduction of long-term transmission rights no later than six months after the entry into force of this Regulation. "

"[...] No later than six months after the coordinated decisions of the regulatory authorities of the bidding zone border to introduce long-term transmission rights pursuant Article 30(2), TSOs of the concerned capacity calculation region, shall jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the concerned capacity calculation region.[...]"

The proposed implementation timeline of the Core CCR TSOs’ LTRs proposal Article 8 takes into account the decisions of competent regulatory authorities to issue long-term transmission rights in accordance with Article 30(1) of the FCA Regulation on respective borders. In case of new bidding zone borders such as BE-DE/LU, AT-DE/LU, CZ-SK, Sl-HU the Core CCR TSOs LTR proposal needs to be amended accordingly and the implementation timeline is to be decided.

5. Assessment of stakeholders’ comments

In accordance with Article 31 of Commission Regulation (EU) 2016/1719 Core TSOs have elaborated on a LTR proposal which was then consulted upon between 10 March and 10 This amendment procedure is relevant as e.g. the type of long-term transmission rights on the Belgium borders recently changed from physical transmission rights to FTR Options and TSOs assessing the possibility to change also on other borders. As all Core CCR NRAs are required to approve any amendments, including changes on specific bidding zone borders, good and fast coordination of the amendment process is important to allow for progressive changes of the design of long-term transmission rights in the Core CCR, in accordance with local market needs.

4. lmplemetation timeline

In the Core CCR a few bidding zone borders exist where no long-term transmission rights exist. Therefore Article 30—2 and Article 31-3 second sentence of the FCA Regulation apply.

"Where long-term transmission rights do not exist on a bidding zone border at the entry into force of this Regulation, the competent regulatory authorities of the bidding zone border shall adopt coordinated decisions on the introduction of long-term transmission rights no later than six months after the entry into force of this Regulation. "

"[...] No later than six months after the coordinated decisions of the regulatory authorities of the bidding zone border to introduce long-term transmission rights pursuant Article 30(2), TSOs of the concerned capacity calculation region, shall jointly develop a proposal for the regional design of long-term transmission rights to be issued on each bidding zone border within the concerned capacity calculation region.[...]"

The proposed implementation timeline of the Core CCR TSOs’ LTRs proposal Article 8 takes into account the decisions of competent regulatory authorities to issue long-term transmission rights in accordance with Article 30(1) of the FCA Regulation on respective borders. In case of new bidding zone borders such as BE-DE/LU, AT-DE/LU, CZ-SK, Sl-HU the Core CCR TSOs LTR proposal needs to be amended accordingly and the implementation timeline is to be decided.

5. Assessment of stakeholders’ comments

In accordance with Article 31 of Commission Regulation (EU) 2016/1719 Core TSOs have elaborated on a LTR proposal which was then consulted upon between 10 March and 10