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Storage auctions

Auctions rules are established in compliance with CRE's deliberation of 27th of September 2018 relating to the implementation of regulated access of third parties to the underground natural gas storage in France.

Reserve price

During auctions, only requests from participants at prices greater than or equal to the reserve prices are considered valid.

 

Auctions for storage year N held from November N-1

The reserve prices that apply to the public auctions held from November N-1 to market storage capacities for storage year N (starting on 1 April N) are set at zero euro per megawatt hour (0 €/MWh) of working volume.

 

Auctions for storage year N held before November N-1

The reserve prices that apply to the public auctions held before November N-1 to market storage capacities for storage year N (starting on 1 April N) are based on the following formula:

Reserve Price (N) = max [spread(N)D – 0.75 ; 0]

With spread(N)D =

  • for an auction opening on a day D between November N-3 and June N-1, spread(N)D is the average difference between Winter TTF N (bid) and Summer TTF N (offer) during the ten days preceding the day D;
  • for auctions held before November N-3, spread(N)D = spread(N-1)D.

Auction type

Teréga’s storage auctions are « price fixing » auction type.

In this type of auction, all participants bid during the same time slot; there is only one auction round.

 

Bidding process:

For each storage product proposed through auction, the participant only bids for working gas volume (in MWh) and is allocated, at the end of the auction, with the number of storage units corresponding to its winning bid.

The participant communicates its bid through points [unit price in €/MWh ; requested capacity in MWh]. The number of points composing the participant’s bid curve is not limited.

At each communicated point, the requested capacity must be inferior or equal to the working gas volume offered at the auction and the price must be equal to or higher than the reserve price.

The participant must ensure that for a given price, a single capacity is requested, and that, between two points, the requested capacity at the lowest price is strictly superior to the requested capacity at the highest price.

From the whole number of points communicated by the participant, Teréga defines the complete bid curve as follows:

  • the requested capacity is considered null for a price strictly superior to the highest price communicated by the participant;
  • between two consecutive points:
    • the requested capacity is considered equal to the capacity requested at the highest price of the two points, providing that the price is strictly superior to the lowest of the two points;
    • at the lowest price of the two consecutive points, the requested capacity is considered equal to the capacity requested at the lowest price;
  • the requested capacity at a price inferior or equal to the minimum price communicated by the participant is considered equal to the capacity requested at this minimum price.

At the closure of the auction, Teréga aggregates all bids from all participants in a single bid curve and compares it with the working gas volume offered at the auction in order to determine the clearing price of the auction.

Clearing method

The clearing method applicable to the auctions is the « pay-as-clear ».

According to this method, the clearing price of the auction is the same for all successful participants and equal to the highest price above which the sum of participants’ bids is strictly inferior to the working gas volume offered at the auction.

In the case where all valid participants’ bids do not reach the working gas volume offered at the auction, the clearing price is equal to the reserve price. Then each single participant is allocated with its maximum requested capacity.

Proportional attribution

If, at the clearing price, the sum of all participants’ bids is strictly superior to the working gas volume offered at the auction, capacities are allocated as follows:

  • first, bids at prices strictly superior to the clearing price are totally allocated;
  • secondly, bids at the clearing price are equally prorated on the basis of the ratio between the remaining capacity and the sum of the bids at the clearing price.

Example of a « fixing price » auction with a « pay as clear » allocation

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