CHAPTER X

INTERIM MEASURES

Interim measures: general provisions
Article 45
1
In the absence of sufficient liquidity of the short term wholesale gas market, suitable interim measures referred to in Articles 47 to 50 shall be implemented by the transmission system operators. Balancing actions undertaken by the transmission system operator in case of interim measures shall foster the liquidity of the short term wholesale gas market to the extent possible.
2
The resort to an interim measure is without prejudice to the implementation of any other interim measure(s) as an alternative or additionally, provided that such measures aim at promoting competition and liquidity of the short term wholesale gas market and are consistent with the general principles set out in this Regulation.
3
The interim measures referred to in paragraph 1 and 2 shall be developed and implemented by each transmission system operator, in accordance with the report, referred to in Article 46(1), approved by the national regulatory authority in accordance with the procedure set out in Article 46.
4
The report shall foresee the termination of the interim measures no later than five years as from the entry into force of this Regulation.

Interim measures: annual report
Article 46
1
Where the transmission system operator foresees implementing or continuing to implement interim measures, it shall prepare a report which shall specify:
a
a description of the state of development and the liquidity of the short term wholesale gas market at the time of preparing the report, including, where available to the transmission system operator, inter alia:
1. the number of transactions concluded at the virtual trading point and the number of transactions in general;
2. the bid/offer spreads and the volumes of bids and offers;
3. the number of participants having access to the short term wholesale gas market;
4. the number of participants having been active on the short term wholesale gas market during a given period of time;
b
the interim measures to be applied
c
the reasons for the application of the interim measures:
1. an explanation why they are needed due to the state of development of the short term wholesale gas market referred to in point (b);
2. an assessment of how they will increase the liquidity of the short term wholesale gas market.
d
an identification of the steps that will be taken to remove the interim measures, including the criteria for making these steps and an assessment of the related timing.
2
The transmission system operator shall consult stakeholders on the proposed report.
3
Following the consultation process, the transmission system operator shall submit the report to the national regulatory authority for the approval. The first report shall be submitted within six months as from the entry into force of this Regulation and the subsequent reports updating it, if necessary, shall be submitted annually.
4
The national regulatory authority shall take and publish a motivated decision within six months following the receipt of the complete report. ... In deciding whether to approve the report, the national regulatory authority shall assess its effect on balancing regimes’ harmonisation, facilitation of market integration, ensuring non-discrimination, effective competition and the efficient functioning of the gas market.
5
The procedure as set out in Article 27(2) applies.

Balancing platform
Article 47
1
Where the short term wholesale gas market has or is anticipated to have insufficient liquidity or where temporal products and locational products required by the transmission system operator cannot reasonably be procured on this market, a balancing platform shall be established for the purpose of transmission system operator balancing.
2
The transmission system operators shall consider whether a joint balancing platform may be implemented for adjacent balancing zones in the framework of cooperation between the transmission system operators and non-UK TSOs or where there is sufficient interconnection capacity and such joint balancing platform is deemed efficient to be implemented. If a joint balancing platform is established, the concerned transmission system operators must endeavour to operate it in cooperation with any concerned non-UK TSOs.
3
In case the situation described under paragraph 1 has not fundamentally changed after five years the national regulatory authority may, without prejudice to Article 45(4) and after making the appropriate amendment of the report, decide to continue the operation of the balancing platform for another period of no more than five years.

Alternative to a balancing platform
Article 48
Where the transmission system operator can demonstrate that as a result of insufficient interconnection capacity between balancing zones a balancing platform cannot increase the liquidity of the short term wholesale gas market and cannot enable the transmission system operator to undertake efficient balancing actions, it may use an alternative, such as balancing services, subject to the approval by the national regulatory authority. Where such an alternative is used, the terms and conditions of the subsequent contractual arrangements as well as the applicable prices and duration shall be specified

Interim imbalance charge
Article 49
1
Where interim measures referred to in Article 45 are necessary, the price derivation may be calculated in accordance with the report referred to in Article 46 which shall substitute the daily imbalance charge calculation methodology.
2
In that case, the price derivation may be based upon an administered price, a proxy for a market price or a price derived from balancing platform trades.
3
The proxy for a market price shall seek to satisfy the conditions provided for in Article 22(6). The design of this proxy shall consider the potential risk for market manipulation.

Tolerance
Article 50
1
Tolerances may only be applied in case network users do not have access:
a
to a short term wholesale gas market that has sufficient liquidity;
b
to gas required to meet short term fluctuations in gas demand or supply; or
c
to sufficient information regarding their inputs and off-takes.
2
Tolerances shall be applied:
a
with regard to network users’ daily imbalance quantity;
b
on a transparent and non-discriminatory basis;
c
only to the extent necessary and for the minimum duration required.
3
The application of tolerances may reduce a network user’s financial exposure to the marginal sell price or the marginal buy price in respect of a part of or the network user’s entire daily imbalance quantity for the gas day.
4
The tolerance level shall be the maximum quantity of gas to be bought or sold by each network user at a weighted average price. If there is a remaining quantity of gas that constitutes each network user’s daily imbalance quantity which exceeds the tolerance level, it shall be sold or bought at marginal sell price or marginal buy price.
5
The design of the tolerance level shall:
a
reflect the transmission network’s flexibility and network user’s needs;
b
reflect the level of risk to the network user in managing the balance of its inputs and off-takes;
c
not undermine the development of the short term wholesale gas market;
d
not result in an unduly excessive increase of the transmission system operator’s balancing actions’ costs.
6
The tolerance level shall be calculated on the basis of each network user’s inputs and off-takes, excluding trades at the virtual trading point, for each gas day. The subcategories shall be defined under the applicable national rules.
7
The tolerance level applicable for a non daily metered off-take defined under the applicable national rules shall be based upon the difference between the relevant forecast of a network user’s non daily metered off-takes and the allocation for non daily metered off-take.
8
The tolerance level may include a component calculated taking into account the application of the deviation of the forecast of a network user’s non daily metered off-takes which is the amount by which the relevant forecast:
a
exceeds the allocation for non daily metered off-take in case the daily imbalance quantity is positive;
b
is less than the allocation for non daily metered off-take in case the daily imbalance quantity is negative.
Words in Art. 46(4) omitted (31.12.2020) by virtue of The Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/531), reg. 1(2), Sch. 2 para. 13; 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 47(2) inserted (31.12.2020) by The Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/531), reg. 1(2), Sch. 2 para. 14(2)(a); 2020 c. 1, Sch. 5 para. 1(1)
Words in Art. 47(2) substituted (31.12.2020) by The Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/531), reg. 1(2), Sch. 2 para. 14(2)(b); 2020 c. 1, Sch. 5 para. 1(1)
Word in Art. 47(3) substituted (31.12.2020) by The Gas (Security of Supply and Network Codes) (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/531), reg. 1(2), Sch. 2 para. 14(3); 2020 c. 1, Sch. 5 para. 1(1)