IUGS 2025/2026 cycle

April 7, 2025

About stock transfer

In the Annex to the Inčukalns Underground Gas Storage Rules, each capacity product description sets out the conditions under which stocks are transferred forward to the next storage cycle if the user actually has a natural gas stock balance at the end of the April 30 gas day.

At the end of this storage cycle (2024/2025) there is a different situation, since there are conditions for already booked products applied in the past (products that expire if they are stored are assigned a transfer product [INTP]) and conditions for new products (5-year and 1-year) that are booked for the next cycle: if this product is booked, gas from any product from the previous storage cycle can be carried over to this product in a certain amount.

Therefore:

1. If there is a stock (gas) balance at the end of the gas day on April 30, 2025, then without taking any action, the stock will be automatically transferred to the stock transfer product (INTP) and the tariff set by PUC at 4.1246 EUR/MWh will apply

2. If a user has booked a 5-year product for the 2025/2026 cycle in the auction and wishes to transfer the stock to a 5-year product, then up to 50% of the capacity of the booked 5-year product will be transferred free of charge, and above 50% for a stock transfer fee. For 5-year products booked in the 2025/2026 storage cycle the stock transfer fee is 1.00 EUR/MWh. (see the auction regulations https://www.conexus.lv/2025-gada-incukalna-pgk-jaudas-izsoles-866).

3. If a user has booked 1-year bundled product in the auction for the 2025/2026 cycle and wishes to transfer the storage to 1-year bundled product, then the entire stock will be transferred at the storage transfer fee set out in the auction rules for 1-year bundled product. As of 7.04.2024, the auction for the 1-year bundled capacity product has not yet taken place.

Please note that the user has to submit information to the operator before April 26, 2025 on how it is necessary to transfer the gas stocks held by the user to the next storage cycle on a product-by-product basis.

As regards the calculation of the stock transfer fee, please note that it is determined prior to the auction and already fixed in the auction rules for the specific storage capacity product. The transfer fee is determined by the higher of EUR 1.00/MWh for the 5-year bundled capacity product and EUR 2.00/MWh for the 1-year bundled capacity product or the average of the winter and summer price spread. The stock transfer fee cannot be less than EUR 1.00/MWh for the 5-year bundled capacity product and EUR 2.00/MWh for the 1-year bundled capacity product.

 

March 27, 2025

How is the amount to be auctioned capacity for a 5-year bundled capacity product determined?

  • Regulations Regarding the Use of Inčukalns Underground Gas Storage Facility, Annex 2, paragraph 6.5, states that the storage capacity available for booking for the 5-year bundled capacity product and the storage capacity for the reserve part of the storage facility shall not exceed 60% of the technical capacity of the storage facility.

    The forecasted technical capacity of the storage facility for the 2025/2026 storage cycle is set 24,679 TWh, the capacity of the reserve part of the storage facility totals 5,800 TWh, consisting of 4,000 TWh to be offered as the Solidarity product and 1,800 TWh for the energy supply security reserve of Latvia.

    The available capacity for the 5-year bundled capacity product is therefore calculated as follows:

    24.679 TWh x 60% = 14.8074 TWh - 4.000 TWh - 1.800 TWh = 9.007 TWh

February 06, 2025

Will the minimum bid cost for BCP 5YP be recalculated once a year (before the start of the auction series)?

  • The fee for the five-year booked product (BCP 5YP) for all five storage cycles shall be determined according to the auction results of the relevant capacity product. For the 2025/2026 auction, it shall not be less than 1.7322 EUR/MWh
  • In Auction offer must be used minimum bid cost 1.7322 EUR/MWh with 4 decimals or any bigger value with 2 decimals.

How are stocks transferred to the five-year capacity product and between storage cycles? How is the stock transfer fee applied?

  • A stock transfer fee will be applied if the stock transferred to the BCP 5YP exceeds 50% of the available capacity of BCP 5YP product for that current cycle. This principle applies to all consecutive storage cycles of BCP 5YP products.
  • If stocks are transferred to BCP 1YP, the stock transfer fee will be applied at 100%.
  • Please see calculation example.

How the 10 TWh of 5yBCP be split throughout 5 years? What will be the volume of 5yBCP offered this year and what could be the volume offered next year?

  • In this storage cycle, up to 10 TWh of capacity (not more than 60% of technical capacity) will be offered for booking in the BCP 5 YP auctions, with the remaining capacity being offered in next storage cycles accordingly.
  • In the event that the entire BCP 5YP is sold in previous auctions, anyway 1 TWh will be offered in the BCP 1YP auction on 8 May 2025.

What is the difference between auctions that offer products with tariffs and separately set the auction premium? And for products (BCP 5 YP) for which an auction cost is set?

  • The BCP 5YP auction will be set the auction cost at EUR/MWh per storage cycle, which will be payable for each consecutive storage cycle for 5 cycles. For products with a tariff and a separate auction premium, the tariff is set per storage cycle and the auction result premium in EUR/MWh is applied for the entire lifetime of the product.

Can the minimum bid price for BCP 5YP be changed by Conexus between storage dates of one particular year? Let's say in February one price, but in May already a different one? Or it is set in stone for the whole auction calendar?

  • The minimum bid price per storage cycle shall be fixed and shall be used for all auctions in that storage cycle

If I have both 2023/2025 and 2024/2026 BCP 2 YP products and I will have some inventories under BCP 2YP in the end of storage cycle, then how I should instruct Conexus, what quantities should go for the second storage cycle of 2024/2026 BCP 2 YP product and what volume should go under the stock transfer product?

  • A few days before 1 May 2025, the system user shall send information on how to split stocks between BCP 2YP products booked in different cycles.
  • The system user shall also inform the operator no later than 5 days before the end of the storage cycle of the quantity of stocks that will be transferred to the BCP 5YP at the end of the season.

How will stocks of existing products be transferred at the start of the 2025/2026 storage cycle?

Will the CO2 allowances costs only start in 2027?

Will it be possible for market participant just to transfer Co2 allowances to Conexus to cover that market participant injections?

  • At the moment, this possibility is not foreseen in the rules.

What if the spreads are negative for BCP 5YP product? Will operator pay back then?

  • No, under the terms of the storage rules, in the event of a negative spread, a fixed stock transfer fee 1.00 EUR/MWh will be applied.