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New Market Rules for Gas Balancing in Germany




KEMA study provided the basis for industry consultations

The German Regulator has decided on a new gas balancing regime. The decision is the result of industry consultations which were based on a study carried out by KEMA. Amongst other things, the new market rules include the change from the current hourly to a daily balancing system, which was proposed by KEMA.

New balancing rules for the German gas market will come into effect on 1st October 2008. The balancing of deviations between entry and exit volumes in the network through the network operator is part of network access and has to be paid by transport customers separately. The current system is criticized for its high imbalance charges as well as for being intransparent with regard to the procurement of balancing flexibility by the network operators.

Comprehensive study
In the previous year the German Regulator thus asked KEMA to prepare a comprehensive study covering both aspects of imbalance settlement and procurement of flexibilities. Based on the findings of the study, the Regulator carried out consultations with major gas associations in Germany. The resulting decision follows consolidated recommendations from the gas associations, balancing network operators and the Regulator, as well as comments from the industry.  

Daily balancing
The movement from the current hourly to a daily balancing system which was suggested by KEMA forms a major part of the new balancing regime. I.e. differences between entry and exit volumes will in future be cashed out at the end of the day and no longer on an hourly basis. At the suggestion of the network operators, a daily incentive system will in addition be introduced in order to secure the stability of the network. This will affect the supply of larger customers in particular. Remaining costs specifically for the procurement of flexibilities will be shared by all balancing groups via a special contribution.

Settlement of imbalances
The changes for the next gas year concern in essence the settlement of imbalances. The current decision does not affect recommendations in terms of flexibility procurement by network operators that were also part of the KEMA study.
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