Głowacki Law Firm

UIOSI principle
European Union Electricity Market Glossary

 

 

 

'UIOSI' (use-it-or-sell-it) principle means the rule according to which the underlying cross zonal capacity of physical transmission rights (PTRs) purchased and non-nominated is automatically made available for day-ahead capacity allocation and according to which the holder of these physical transmission rights receives remuneration from the Transmission System Operators (TSOs) (Article 2(6) of the Network Code on Forward Capacity Allocation).

 

 

Harmonised Allocation Rules (Annex I to the ACER Decision 03/2017), Articles 45, 48

 

Article 45
General principles

1. Physical Transmission Rights shall be subject to the Use it or Sell It principle.

 

2. The holder of allocated Physical Transmission Rights may nominate the Physical Transmission Rights for its physical use in accordance with Article 46. The holder of allocated Financial Transmission Rights shall not be entitled to nominate them for physical delivery.

 

3. In case the Registered Participant does not nominate its Physical Transmission Rights, the Allocation Platform shall make the underlying Cross Zonal Capacity of the non‐nominated Physical Transmission Rights available for the relevant daily allocation. The Physical Transmission Right holders who do not nominate their Physical Transmission Rights for physical use of their rights or has not reserved its Physical Transmission Rights for the balancing services shall be entitled to receive remuneration in accordance with Article 48.

 

4. Holders of Financial Transmission Rights shall be subject to the remuneration rules in accordance with Article 48.

 

5. In case the Long Term Transmission Rights holder reserves its Physical Transmission Rights for the balancing services, such Cross Zonal Capacity shall be excluded from the application of the remuneration processes as detailed in Chapter 7. The process of notification of such reservation shall be subject to the relevant rules entered into force in accordance with the applicable national regulatory regime and published by the responsible Allocation Platform.

 

Article 48
Remuneration of Long Term Transmission Rights holders for non‐nominated Physical Transmission Rights and Financial Transmission Rights


1. The Allocation Platform shall remunerate the Long Term Transmission Rights holder for the Long Term Transmission Rights which are reallocated at the relevant daily allocation. The Allocation Platform shall remunerate the Long Term Transmission Rights holder for each MW which was non‐nominated for the relevant hourly period in the case of Physical Transmission Rights and for all allocated MW per relevant hourly period in the case of Financial Transmission Rights. The remuneration shall be calculated in the case of Physical Transmission Rights as the difference between the volumes stated in the Rights Document and the final volumes nominated and accepted by the relevant TSO, in the case of Financial Transmission Rights as the volumes stated in the Rights Document, multiplied by a price, depending on the type of the day‐ahead allocation, as follows:


(a) in case of day‐ahead Implicit Allocation, including in case of fallback allocation for Implicit Allocation, the price shall be the Market Spread at the concerned Bidding Zone border for the concerned hourly period only in case the price difference is positive in the direction of the Long Term Transmission Rights of the day‐ahead Implicit Allocation in which that Cross Zonal Capacity was reallocated, and 0€/MWh, otherwise. If specified in the respective regional or border specific annexes, this price may be adjusted to reflect Allocation Constraints on interconnections between Bidding Zones as defined in Regulation (EU) 2015/1222, Article 23, paragraph 3, where these Allocation Constraints are included in the day‐ahead Cross Zonal Capacity allocation process.


(b) in case of day‐ahead Explicit Allocation different from fallback allocation for Implicit Allocation for Physical Transmission Rights, the price shall be the Marginal Price of the daily Auction at which that Physical Transmission Right was reallocated, for the concerned hourly period; and


(c) in case of fallback allocation of Implicit Allocation or Explicit Allocation where no reference price is calculated for the daily allocation timeframe the price for the Long Term Transmission Rights remuneration shall be the Marginal Price of initial Auction.

 

Where Financial Transmission Rights Obligations are in place, holders of such Rights shall be obliged to provide remuneration to the Allocation Platform if the price difference is negative in the direction of the Financial Transmission Rights Obligation. The remuneration shall be calculated as the volumes of Financial Transmission Rights Obligations stated in the Rights Document multiplied by a price, calculated in line with the principles of paragraph 1, considering that the price difference is negative.


2. The Allocation Platform shall compensate the Long Term Transmission Rights holder for the Financial Transmission Rights and non‐nominated Physical Transmission Rights which are not reallocated at the relevant daily allocation in accordance with CHAPTER 9 in case of the triggering event listed in Article 56.


3. The Allocation Platform shall compensate the Long Term Transmission Rights holder in accordance with Article 59(1) letter (a) and (b) for the Financial Transmission Rights and non‐nominated Physical Transmission Rights which are not reallocated at the relevant daily allocation for other reasons than these mentioned in paragraph 2 of this Article.

 

Also Article 45 of the Harmonised allocation rules for long‐term transmission rights (Annex I to the ACER Decision 03/2017 - HAR) stipulates that the PTRs:

 

- may be nominated for physical use and


- are subject to the UIOSI principle.

 

In case the holder does not nominate its PTRs, the allocation platform makes the underlying cross zonal capacity of the non‐nominated PTR available for the relevant daily allocation.

 

The holder may also reserve its PTRs for the balancing services, the effect of this reservation is that such cross zonal capacity is excluded from the application of the remuneration processes.

 

The PTRs holders who:

 

- do not nominate their PTRs for physical use or

 

- do not reserve its PTRs for the balancing services;

 

is entitled to remuneration, which is paid by the allocation platform.

 

Rules for the remuneration for non‐nominated and reallocated PTRs are stipulated in Article 48 of the HAR and are as follows:

 

1. the remuneration is for each MW which was non‐nominated for the relevant hourly period,


2. the remuneration is calculated as the difference between the volumes stated in the rights document and the final volumes nominated and accepted by the relevant TSO, multiplied by a price, depending on the type of the day‐ahead allocation, in accordance with the following rules:

 

(a) in case of day‐ahead implicit allocation, including in case of fallback allocation for implicit allocation, the price is equal to the market spread at the concerned bidding zone border for the concerned hourly period only in case the price difference is positive in the direction of the PTRs of the day‐ahead implicit allocation in which that cross zonal zapacity was reallocated, and 0€/MWh, otherwise (if specified in the respective regional or border specific annexes, this price may be adjusted to reflect allocation constraints on interconnections between bidding zones, where these allocation constraints are included in the day‐ahead cross zonal capacity allocation process);

 

(b) in case of day‐ahead explicit allocation different from fallback allocation for implicit allocation for PTR, the price is equal to the marginal price of the daily auction at which that PTR was reallocated, for the concerned hourly period; and

 

(c) in case of fallback allocation of implicit allocation or explicit allocation where no reference price is calculated for the daily allocation timeframe the price for the PTRs remuneration shall be the marginal price of initial auction.

 

According to Article 38(7) of the Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing if physical transmission right holders use cross zonal capacity for the exchange of balancing capacity, the capacity shall be considered as nominated solely for the purpose of excluding it from the application of the use-it-or-sell-it (‘UIOSI’) principle.

 

 

 

 

 

 

IMG 0744

    Documentation    

 

 

 

 

Network Code on Forward Capacity Allocation, Article 2(6)

 

Network Code on Electricity Balancing (Commission Regulation (EU) 2017/2195 of 23 November 2017 establishing a guideline on electricity balancing - NC EB), Article 38(7)

 

Decision of the Agency for the Cooperation of Energy Operators (ACER) No 03/2017 of 2 October 2017 on the electricity transmission system operators’ proposal for harmonised allocation rules for long-term transmission rights

 

Harmonised allocation rules for long‐term transmission rights in accordance with Article 51 of Commission Regulation (EU) 2016/1719 of 26 September 2016 establishing a Guideline on Forward Capacity Allocation (Annex I to the ACER Decision 03/2017)

 

 

 

 

 

clip2

    Links    

 

 

 

 

 

 

 

 

 

 

Last Updated on Saturday, 09 June 2018 20:20
 

Search

TwitterFacebookLinkedin
Copyright © 2009 - 2018 Michal Glowacki. All rights reserved.
The materials contained on this website are for general information purposes only and are subject to the disclaimer