| 1. | All Nominated Electricity Market Operators (NEMOs) taking part in the Single Intraday Coupling (SIDC) have sent a letter to all National Regulatory Authorities (NRAs) where they request the NRAs to take a decision on the shipping solution for the SIDC project to be implemented in all bidding zones pursuant to Article 68(6) of the Commission Regulation (EU) 2015/1222 of 24 July 2015 establishing a guideline on capacity allocation and congestion management (CACM Regulation). |
| 2. | The need for a transit shipping solution became pressing with the go-live of the second wave of SIDC in November 2019. |
| 3. | In Multi-NEMO Arrangements (MNA) areas, a temporary solution was established and EMCO AS and EPEX SPOT SE perform the task on a rotational basis of 3 months each, with the exception of Polish bidding zone, where only one of these NEMOs performs it, in order to ensure the continuation of the second wave of SIDC. |
| 4. | The temporary rotational solution will be, based on the instructions of the NRAs delivered to the SIDC project parties, in place at least until 19 November 2020. |
| 5. | All trades can be settled among all participating parties in the current SIDC shipping solution, and there is no discrimination regarding routes of the trade. However, due to technical constraints, not all trades can be settled directly between all participating NEMOs. For some trades, a shipping agent may act as a counter party between different central counter parties for the exchange of energy. Transit shipping is therefore a result of the design of the shipping module in the SIDC algorithm (“Shipping Module”), in which the financial settlement follows the physical path of shipping border by border and does not allow for direct source-to-sink shipping. Furthermore, the volume has to be nominated to each Transmission System Operator (TSO) along the route of the trade (physical shipping/settlement) even if Shipping Module submits the information directly to the TSOs. |
| 6. | The transit shipper has no revenue from these trades, as it is neither affiliated with the source nor with the sink NEMO or NEMO’s central counter party of the trade. |
| 7. | The fact that the transit shipper is neither affiliated with the source nor with the sink NEMO or NEMO’s central counter party of the trade increases the risk for the transit because it cannot decide to stop or cancel the trade. Mechanisms of decoupling have been put in place to mitigate the risk via procedures. Transit shippers do not receive revenue and so they cannot compensate the risk. The current shipping solution does not allocate the risk efficiently. |
| 8. | In accordance with Article 6(1)(i) and 7(1)(g) of CACM Regulation, each NEMO shall be able to provide the necessary clearing and settlement services and shall be responsible for acting as a central counter party for clearing and settlement of the exchange of energy or delegate the task in accordance with Article 81 of CACM Regulation. Alternatively, shipping agents may act as counter parties between different central counter parties for the exchange of energy according to Article 68(6) CACM Regulation. |
| 9. | Because of the current design of the Shipping Module, a transit shipping activity provided either by central counter parties or by shipping agents is needed as an interim measure, until an enduring solution to the problem has been established. In monopoly areas, as well as in competitive non-MNA areas (i.e. areas where only one competitive NEMO is active, like for instance Croatia and Slovenia), the transit shipping activity is performed only by the incumbent NEMO (either monopoly or competitive) or by TSOs acting as a shipping agent. On the contrary, in MNA areas the service needs to be assigned to one of the competitive NEMOs, since it cannot be performed simultaneously by both of them. In principle, the central counter parties or shipping agents are obliged to perform shipping within each bidding zone. Nevertheless, currently in MNA areas, there is a lack of a proper mechanism to appoint the transit shipper for the interim period, which should be solved by an enduring solution to be submitted by all NEMOs and shipping agents to NRAs for approval. |
| 10. | In this context, the NRAs have cooperated closely and in a coordinated manner in order to determine the transit shipping Arrangements in accordance with Article 68 of CACM Regulation. NEMOs and TSOs have been consulted by the NRAs in the process of making the arrangements. |
| 11. | It is crucial for the development and continuation of the SIDC in accordance with the principles in Article 3 of CACM Regulation that a solution is in place to avoid disruption of SIDC. To avoid such an eventuality, a continuation of the current rotational mechanism is necessary. However, this is a short-term solution to mitigate the risk of decoupling, and shall be replaced by an enduring solution as soon as possible. It is therefore necessary to explore options available for an enduring solution, and all TSOs and NEMOs in the SIDC project shall in good faith contribute to a proposal for a satisfactory solution. The NRAs shall finally decide on what the enduring solution shall be, based on a cost benefit analysis, and with the aim of establishing a cost-efficient, robust and well-functioning framework for the SIDC in line with the objectives from article 3 of CACM Regulation. |