In the first auctions of Inčukalns underground gas storage capacity, total demand has significantly exceeded the amount offered
On 15 March, the first Inčukalns underground gas storage (UGS) capacity auctions were completed in which system users were assigned 12 876 643 MWh, the single operator of the natural gas transmission and storage system JSC “Conexus Baltic Grid” (Conexus) informed. It is important that the total amount of capacity requested by users during the auctions has exceeded nearly 2 times the maximum available capacity of Inčukalns UGS in the auctions.
In the auction of capacity of the one-year grouped capacity product Inčukalns UGS, the total capacity requested amounted to 19 812 843 MWh, which is 1.8 times the maximum available capacity of Inčukalns UGS for a single-year grouped capacity product. In the auction of capacity of the two-year grouped capacity product Inčukalns UGS, the total requested capacity volume reached 5 670 439 MWh, which is 2.8 times the maximum available two-year grouped capacity product under auction.
Conexus Board Chairman Uldis Bariss points out that the introduction of the auction principle, along with the approval of new storage tariffs, has been a necessary solution to ensure transparency for market participants in storage capacity reservation: “The high interest in participation in the first auctions of Inčukalns underground gas storage capacity has justified the need to apply this type of capacity reservation. An auction as a mechanism is a widely used practice in Europe that has proven its effectiveness while allowing us, as a service provider, to ensure transparent storage use for market participants. It should be stressed that these auctions, thanks to tariffs approved by the regulator for a five-year period, mark the beginning of the next five-year cycle, which ensures predictability of service costs and facilitates medium-term operational planning."
As a result of the auctions, 10 876 643 MWh have been allocated to the 2021./2022storage cycle for the one-year grouped capacity product and 2 000 000 MWh for the 2021./2023cycle for the two-year grouped capacity product. The premium applicable to the volume of the one-year grouped capacity product allocated to system users is EUR 0,31/MWh, while the premium applicable to the amount of the two-year grouped capacity product awarded is EUR 0,72/MWh.
The next capacity auctions of Inčukalns UGS are scheduled to be conducted in accordance with the schedule of storage cycle capacity auctions published on the Conexus website.