Market model

Description of the new 2013 gas market model

In accordance with the provisions of the Gaswirtschaftsgesetz (GWG, Natural Gas Act) 2011 and the Gas-Marktmodell-Verordnung (GMMO-VO, Gas Market Model Ordinance), the gas market in Austria was restructured as of 1 January 2013. The amended regulations focus on balance groups and the customers represented by them.

Within the framework of the new gas market model, the former control areas were transformed into market areas (Eastern, Tyrol and Vorarlberg market areas), whereas only the Eastern market area also comprises transmission lines (previously referred to as transit lines). The distribution areas in each market area exclusively comprise distribution systems.

The market area manager (MAM) is responsible for coordinating system operation jointly with the distribution area manager (DAM). Among other duties, the MAM and the DAM are responsible for establishing a uniform methodology for the calculation and announcement of capacity at the entry/exit point and for coordinating the development and maintenance of the transmission and distribution network. Apart from these rather technical responsibilities, the MAM also has to manage the balance groups operating in the Eastern market area. Each customer is a direct or indirect (i.e. via their supplier) member of a balance group.

The previous capacity booking system based on contractual transport paths was replaced in the Eastern market area by an entry/exit system. According this new entry/exit system, capacities can be booked and traded independently of each other at the entry and exit points. On the basis of these capacity bookings at the entry points, the traders and suppliers have the right to inject gas into the transmission network of the respective market area and transport it to the market area’s virtual trading point (VTP). The capacity bookings at the exit points entitle the holders to transport gas from the virtual trading point and to withdraw it from the transmission network. The virtual trading point, which is not assigned to a physical entry or exit point, enables market participants to purchase and sell natural gas without having to book capacity. Gas can be injected at an entry point regardless of whether gas is withdrawn at the exit point and vice versa, thanks to the coordination – and active balancing where required – of all gas transports in the market area by the MAM and DAM.

The DAM books and balances the entry and exit capacities in the market area between the transmission and distribution systems in order to ensure uninterrupted handover to the suppliers. In addition, the DAM is responsible for coordinating the entry and exit capacities at the small cross-border interconnection points within the distribution area and oversees the gas transports to the production and storage facilities. The DAM also controls the gas flow and is responsible for pressure maintenance within the distribution area.

A strictly formalised, automatic exchange of gas flow data takes place among the various market participants (market area managers, distribution area managers, transmission system operators, distribution system operators, balance groups and suppliers as well as operators of virtual trading points). The individual gas flows for the intended injections and withdrawals are allocated to the participants, and balancing energy is used (ex ante) by the MAM to make up for imbalances. By accepting balancing energy offers from the gas exchange at the VTP and the merit order list of the balance group coordinator, the DAM continuously balances the scheduled capacities and those actually consumed, thus ensuring system stability and security of supply in the distribution areas. The actual delivery and consumption quantities as well as any imbalances encountered are, as previously, allocated by the balance group coordinator (ex post).

Chart - Eastern market area model:

The COSIMA gas market model was successfully established in the Tyrol and Vorarlberg market areas as of 1 October 2013, in this way connecting the Tyrol and Vorarlberg market areas to the NetConnect Germany (NCG) gas market. COSIMA was required because the Tyrol and Vorarlberg market areas are not connected to the Eastern market area, but do have physical access to the NCG market area. Although there are specific regulations for the Tyrol and Vorarlberg market areas, they largely correspond to those applicable the Eastern market area. As part of COSIMA, the DAM books exit capacities with the upstream transmission operator in Germany and withdraws balancing energy from the German NCG market area. The transfer of the gas for Tyrol and Vorarlberg takes place through nomination at NCG’s VTP. The DAM accepts the gas at the German VTP and arranges its transport to the Tyrol and Vorarlberg market areas. In line with the ‘allocated as nominated’ principle, gas flows handed over at the German VTP are considered injected directly in the Tyrol or Vorarlberg market areas. There are no other distinctive features to be taken into account by the German balancing groups regarding transports to the Tyrol and Vorarlberg market areas. The gas transfer from the German balancing groups at the German VTP are allocated to the corresponding balancing groups in Austria. The schedule messages relating to the supply to consumers in Tyrol and Vorarlberg that are submitted by these balancing groups are netted and set off against the gas flows transferred at the German VTP by the corresponding balancing groups in each case. These gas volumes are subject to the mechanisms for settling balancing energy as specified by the Austrian market rules. The competent balance group coordinator is responsible for settling balancing energy. In addition, the tasks of the balance group coordinator include the management of the balance groups in the Tyrol and Vorarlberg market areas.

Chart – COSIMA market model

On changing over to the entry/exit system, a new tariff calculation scheme was introduced. Besides fundamentally reforming the distribution of capacity rights, the charging system underwent comprehensive restructuring. Whereas in the past the costs of the transmission system and the distribution system were charged to consumers as part of network tariffs, as of 1 January 2013 the supplier is invoiced for the charges to be paid at the entry and exit points (entry and exit fees), i.e. the applicable share of the transmission costs is no longer charged as part of the network tariffs but as part of the price for the natural gas. The system utilisation charges levied at entry points for natural or biogenic gas are to be paid by the producer of the natural or biogenic gas, and the charges for withdrawing natural or biogenic gas are to be paid by the gas storage operators. The costs of the individual distribution networks are to be paid, as previously, by the end users connected to the respective distribution network based on energy and capacity. 


AGGM’s responsibilities as the distribution area manager for all of Austria (DAM in Austria’s three market areas, i.e. the Eastern, Tyrol and Vorarlberg market areas) are laid down in section 18 of the Austrian Gastwirtschaftsgesetz 2011 (GWG, Natural Gas Act) and the Energielenkungsgesetz (EnLG, Energy Intervention Powers Act). These responsibilities mainly include network access and capacity management, gas flow control, long-term planning for the Level 1 distribution network as well as crisis management in supply emergencies.