RBP IP TP

3.1.2 (j) Rules applicable for connection to the system operated by the transmission system operator


​“Transmission system operators shall publish at least the following information about their systems and services:

(j) the rules applicable for connection to the system operated by the transmission system operator;"

The rules applicable for connection to the system operated by the transmission system operator are governed by the following legislative and internal regulations:


1. Section 67 of Act XL on Natural Gas Supply

CONNECTION, ACCESS, CAPACITY ALLOCATION

Connection to transmission and distribution pipelines

Section 67 (1)  The Transmission System Operator (TSO), with respect to the transmission pipeline, and the natural gas distributor relative to its service area shall comply with any request for access to the natural gas supply system, with the exception if:

  1. a) connection is not possible for technical reasons;
    b) there is any legal impediment;
    c) the applicant refused to pay the initial connection charges referred to in Subsection (1) of Section 108, and refused to accept the conditions laid down in the specific legislation for connection to the network;
    d) the necessary official permit as prescribed in the specific legislation is not available.

(2) The TSO and the natural gas distributor may refuse connection to the transmission or distribution pipeline with respect to any specific connection point due to technical reasons relating to the transmission and/or distribution pipeline in question. If the TSO or the natural gas distributor refused connection citing the reasons referred to in Paragraph a) of Subsection (1), the required conditions for connection shall be indicated.

(3) If the TSO or the natural gas distributor refused connection to the transmission or distribution pipeline, the Office shall adopt a decision concerning connection at the applicant’s request, and may order the authorized system operator affected to comply with the request for connection if the customer agrees to pay the connection charges in the amount defined in the specific legislation.

(4) Authorized system operators are responsible for ensuring the medium and long-term ability of the system to meet reasonable demands for the transportation of gas through their transmission and distribution pipelines as indicated in the relevant accession protocols and other capacity declarations made to authorized system operators.

Section 68 The technical and business parameters for the connection of customers to the interconnected natural gas system shall be checked as prescribed in the specific legislation. The customer’s purchased capacity, and the conditions for using such purchased capacity shall be fixed in the accession protocol concluded by the customer and the authorized system operator affected.

Section 69 If a customer is connected to a distribution pipeline, the natural gas distributor concerned shall contact the relevant TSO to secure the necessary natural gas transmission capacity. The rules and detailed conditions concerning the cooperation of the TSO and the natural gas distributor relating to connection are laid down in the specific legislation.

Section 70 Producers of natural gas, where gas is extracted by mining operations, producers of biogas and gas from biomass or other types of gas equivalent to natural gas shall be given preferential treatment in terms of connection to the transmission and distribution pipelines. The conditions for connection to the transmission and distribution pipelines, the quality requirements relating to injected gases, and the regulations pertaining to delivery and measurement are laid down in this Act and in the specific legislation.


2. Sections 63-72 of the Decree on the Execution of Act XL on Natural Gas Supply

(to Sections 67-70 of the Act on Natural Gas Supply)
Connection to transmission and distribution pipelines

Section 63 The detailed rules of connecting to the distribution pipeline are specified in the Gas Distribution Regulation (hereinafter referred to as: “GDR”) and in the specific regulation on the connection charges as contained in Annex I of the present Decree.

Section 64 The rules of procedure must be established in the Network code (BCC) by natural suppliers and natural gas distributors in regard to
a) the frequency and subject of negotiations regarding purchased capacities,
b) the harmonization of end user and resource side capacities,
c) the determination of development costs relating to costumers and the allocation of connection charge.

Section 65 The TSO and the natural gas distributor shall accept the request for capacity increase with regard to their systems submitted by the natural gas storage facility or natural gas producer unless, considering its development plan, such increase necessitates the development of the system for hydraulic purposes. If, considering its development plan, the increase necessitates system development, the system operator shall provide the applicant with a detailed proposal within 60 days and, if the applicant accepts such proposal, the system operator shall initiate the amendment of the operating licence at the Office.

Section 66 In applying the present decree, biogas with a quality equivalent to natural gas and gases produced from biomass or other artificially produced, combustible types of gas and mixtures thereof, as specified in Paragraph 26 of Section 3 of GSA, shall qualify as natural gas.

  1. § (1) The TSO and the natural gas distributor shall provide the applicant with a detailed proposal regarding the technical-economic conditions of establishing a connection point ontheir system within 60 days upon request.

(2) The natural gas producer’s request shall include:
a) the exact location of the natural gas production facility,
b) the daily and hourly amounts of natural gas planned to be injected into the system until the end of the production cycle, but at most 15 years, for each year, and in the case of the first year, for each month,
c) the physical and chemical characteristics of the natural gas to be injected.

(3) The proposal of the TSO and the natural gas distributor shall include:
a) the connection point of the transmission or distribution pipeline that is the most favourable in terms of the interconnected natural gas system and that is determined based on the policy of least cost, where the natural gas producer can connect to the system,
b) the technical and financial conditions of connecting the pipeline starting from the natural gas producer to the interconnected natural gas system,
c) a declaration issued by the TSO connecting to the distribution pipelines regarding the conditions of facilitating the partially isolated system,
d) the conditions of partially isolated system with regard to the distribution pipeline,
e) the measuring and accounting specifications applicable to the entry and connection points.

(4) The contribution paid for the connection to the transmission or distribution pipeline shall not exceed the reasonable and justified costs of the investment. The natural gas producer may agree with the system operator on the implementation of the necessary equipments, for which no connection charge can be levied but in which case the system operator is the owner of the equipment.

(5) The operating and accounting conditions of the isolated operation developed for the connection to the transmission and distribution pipeline shall be published on the system operator’s website, and shall be observed by system users. 

(6) If the holder of authorization does not respond to the proposal request as described in paragraph (1) or the proposal does not contain the information specified under Paragraph (3), the Office imposes the sanctions described in Subsections (1) and (2) of Section 119 of GSA.

(7) The natural gas supplier and the natural gas distributor shall file the request for license modification with the Office and attach the agreements entered into with the natural gas  producer to the request. The Office may permit the development of partially isolated systems exclusively.

  1. § (1) The natural gas producer connecting to the transmission or distribution pipeline shall:
    a) enter into a cooperation agreement with the system operator, which includes the procedures regarding natural gas traffic according to the provisions specified in network code (BCC),
    b) provide the connecting system operators with information regarding regular operations,
    c) under the cooperation agreement entered into with the connecting system operator, shall provide warranty for covering damages – especially those resulting from production loss – in cases when delivery fails due to reasons attributable to the natural gas supplier and, as a consequence, the system operator or the system coordinator has to impose limitations,
    d) regularly provide the dispatch service of the natural gas supplier connecting to the distribution pipeline with data regarding the amount of natural gas injected into the natural gas distribution system,
    e) enter into an agreement with the natural gas supplier regarding the procedures to be followed in the case of reduced production or production loss,
    f) participate in the official approval of natural gas quality differing from that of the natural gas distributed in the previous gas year and comply with the pertaining official regulations,
    g) ensure the connection pressure.

(2) The natural gas supplier and the connecting system operator shall agree on the measurement of the quantity and quality of natural gas, the circle and property rights of the assets to be employed and the relating certification.

(3) At the transfer-acceptance point of the distribution pipelines, the natural gas supplier shall operate measuring and quality control devices suitable for purifying and odorizing natural gas as well as measuring the quantity, pressure, temperature, composition and calorific value thereof. The measuring and quality control devices instruments shall, at all times, comply with the regulations applicable to measurement.

(4) The quality parameters to be examined shall be specified in the agreement entered into by the connecting system operators and natural gas suppliers.

(5) The natural gas suppliers shall have an IT system that is appropriate for real time data transmission into the IT system of the connecting system operators.

(6) The natural gas producer shall carry out its daily natural gas distribution activity under the conditions specified in BCC.

(7) The natural gas supplier shall promptly report any change in the quantity and quality of production as compared to its forecasts reported to the connecting system operators. If the system operator does not accept or the natural gas producer fails to report such discrepancy, the natural gas supplier shall reimburse the system operator for all the relating, verified expenses and losses incurred.

  1. § (1) The system operator, based on the quantity and quality information provided and guaranteed by the system operator in the BCC for a specific date, based on production data forecasted for a 5-year period, shall determine the date when the devices need to be reset or the technologies that make such resetting unnecessary need to be implemented.

(2) If the devices need to be reset, the system operator shall inform the system operator concerned of the planned date of such resetting two gas years in advance. The system operator shall inform the users of the necessity and process of resetting the devices.

(3) The natural gas producer shall assume liability for damages resulting from non-compliance or failure in regard to the fulfilment of the data reporting provisions specified in paragraph (1).

  1. § (1) Users connecting to the isolated system shall be informed of the peculiarities of isolated system, especially of the purchase and setting of user devices and the costs of resetting the devices as a result of a potential change in the quality of natural gas.

(2) In the case of fully isolated systems, the natural gas supplier shall commence the transformation of the fully isolated operation into a partially isolated system – with the Office’s approval – at least two gas years prior to the date when, based on production and consumption data forecasted for a 5-year period, the production level falls behind consumption level.

(3) The Network code (BCC) shall contain the procedure of changing traders for users participating in the isolated system, the schedule of the coordination of daily gas distribution and accounting, as well as the obligations of the natural gas producer.

(4) Natural gas distributors with isolated systems shall publish the order of quality accounting of the given isolated system in its business regulations.

  1. § (1)In the case of partially or fully isolated systems, the Office may permit the distribution of natural gas of a quality different from that of the natural gas distributed in the previous year unless it requires the resetting of the existing heating devices. If the devices need to be reset or technologies that make such resetting unnecessary need to be implemented, and the natural gas producer bears all the relating costs by offering appropriate financial guarantees, the permission can be issued.

(2) The natural gas distributor shall develop an accounting method for system users with regard to the natural gas of different quality injected into the distribution pipeline and publish such method in its business regulations.

(3) Network code (BCC) shall contain the method of accounting for natural gas of different quality employed by natural gas traders and the rules of procedure.

(4) In the case of the Office’s permit specified in paragraph (1), the natural gas producer and the connecting system operator enter into an agreement which sets forth the obligations that the contracting parties shall meet, if the conditions specified in the permit are fulfilled. 

  1. § In the case of biogas producers, the rules pertaining to natural gas producers shall apply mutatis mutandis.

(to Sections 71-76 of GSA)

Capacity allocation and access to the interconnected natural gas system

Section 73 (1) The purchased capacity is a right of a productive character relating to the connection point at the service location possessed by the current owner of the connection point. If there is a change in the identity of the owner of the service location concerned or the service location or the connection point is transferred, the available capacity shall be given to the new owner.

(2) If the user has not contracted its purchased capacity or part of that capacity for two consecutive gas years, such capacities may be utilized as of the first day of the second gas year following the submission of request, unless the connecting party and the system operator have agreed on another date.

(3) Upon concluding the accession protocol, the natural gas supplier and the natural gas distributor shall record the purchased and registered capacity in the registry of the service location. In recording the resource side capacity in the registry, the resource declarations issued by gas sellers until 31 December 2003 and capacity declarations issued by the natural gas supplier until 31 December 2003 under Act XLI of 1994 on Gas Supply shall be governing.

(4) As to the capacity contracts regarding the supply and storage capacities for the transmission of self-produced gas through the state borders of the Republic of Hungary, natural gas and biogas producers qualify as users. The registered capacity of the natural gas producer for a given gas year shall be the highest production capacity value reported by the natural gas producer to the connecting system operator.
 

3. Business and Commercial Code (BCC)/Network Code

”CONNECTION TO THE NATURAL GAS SYSTEM

THE CONDITIONS OF CONNECTING TO THE NATURAL GAS TRANSMISSION SYSTEM in the case of new requests and capacity increases

(a) The connection can be established if the applicant meets the relating provisions of GSA  and ED  and none of the conditions specified in paragraph (d) exists.

(b) The TSO shall evaluate the submitted request under Point 7.5.4. of the present Code.

(c) In order to evaluate the request for connection, a feasibility examination shall be carried out, which shall include the determination of the technical and financial conditions of the connection:

  1. If the development necessary for the establishment of the connection is included in the development plan of the natural gas supplier and the request fulfils the requirements specified in paragraph (a), the TSO approves such developments.
    ii. If the development necessary for the establishment of the connection is not included in the development plan of the TSO  but the request fulfils the requirements specified in paragraph (a), the TSO shall consult the applicant regarding the potential technical and financial conditions of the connection.

(d) The TSO may reject the request for connection, if:

  1. the connection is not possible due to technical reasons;
    ii. there is any legal impediment;
    iii. the applicant refuses to pay the initial connection charges and accept the conditions laid down in the specific legislations  regarding network connection;
    iv. the applicant does not have the access permission as specified in paragraph (a) of section 3.1.3.


Request for connection rejected due to financial reasons

If the request for connection is rejected due to financial reasons, the applicant may request the establishment of the connection at its own cost, on condition that the technical requirements set by the TSO are fulfilled. The owner of the device and the TSO shall agree on the ownership, operation and technical design of the connection point financed by the applicant. The TSO shall inform the Office about the agreement and the completion of the facility.


Connection Agreement

(a) The technical specifications and time schedule of gas transmission system connection point shall be stipulated in the connection agreement concluded between the TSO and the market player requesting the establishment of the connection point, which shall form an integral part of the capacity booking and natural gas transmission contract.

(b) The capacity booking and natural gas transmission contract may only be concluded on the increased capacity from the date when, at the exit point concerned, the network capacity becomes available.

(c) The connection agreement shall include:

  1. the location of the connection point;
    ii. the owner of the connection point;
    iii. the purchased capacity of the exit point;
    iv. the registered capacity of the exit point;
    v. the capacity available at the input point of the natural gas transmission system under the applicable section of the ED ;
    vi. the amount of the connection fee as well as the mode and date of performance thereof;
    vii. the date as of which the purchased network point capacity is available and the consumption may be commenced;
    viii. the financial, technical and other conditions of providing the purchased capacity, including the ownership of the investment under construction;
    ix. the cases constituting the breach of contract and the legal consequences thereof;
    x. the provisions applicable to the expiry and termination of contract.


The natural gas producer’s connection to the natural gas distribution system

(a) The natural gas producer may only inject natural gas into the natural gas transmission or distribution system if the quality of natural gas meets the requirements specified in section 4.2. The TSO or the natural gas distributor may reject the connection for injecting natural gas of a different quality.

(b) Should the produced natural gas not fulfil the quality requirements specified in section 4.2., the producer shall terminate the injection of natural gas immediately. If not, the injecting system user and the natural gas producer shall assume liability for losses resulting from injecting the natural gas of inadequate quality.

(c) The natural gas producer shall, at its own cost, install technical equipments that are appropriate for the immediate termination of injecting the natural gas of inadequate quality.
 

THE CONDITIONS OF CONNECTING TO THE NATURAL GAS DISTRIBUTION SYSTEM

The conditions of connection to the natural gas distribution system

The conditions of connection to the natural gas distribution system in the case of new requests and capacity increases

(a) The connection can be established if the applicant meets the pertaining provisions of GSA  and ED  and none of the conditions specified in paragraph (e) exists.

(b) The natural gas distributor shall evaluate the submitted request under its business regulations.

(c) If the registered capacity, including the capacity purchased by the new user, reaches 90% of the transfer facility’s maximum capacity, the natural gas distributor shall inform the natural gas supplier about the request for connection. If the natural gas supplier informs the natural gas distributor that the required free capacity is not available, the tasks described in section 5.1. shall also be carried out.

(d) In order to evaluate the request for connection, a feasibility examination shall be carried out, which shall include the determination of the technical and financial conditions of the connection:

  1. If the required capacity indicated in the request is available and the request fulfils the requirements specified in paragraph (a), the natural gas distributor shall provide the purchased capacity, once the charge specified in the charge regulations for connection to the interconnected natural gas system is settled.
    ii. If the required capacity indicated in the request is not available but the request fulfils the requirements specified in paragraph (a), the natural gas distributor shall consult the applicant regarding the technical and financial conditions of the connection.

(e) The distribution system operator (DSO) may reject the request for connection, if:

  1. connection is not possible due to technical reasons;
    ii. there is any legal impediment;
    iii. the applicant refuses to pay the initial connection charges and accept the conditions laid down in the specific legislation regarding network connection;
    iv. the applicant does not have the connection agreement as specified in point (b) of section 3.1.3.

(f) The DSO shall publish the user request form on its website.

(g) The user submits its request by delivering its user request to the natural gas distributor.

(h) The DSO shall examine if the user’s increasing capacity demand can be met and inform the user within 30 days.

(i) Simultaneously with delivering the information, the natural gas distributor shall make a proposal relating to the accession protocol for the natural gas distribution system.

(j) If the DSO  cannot or, in terms of economies, will not fulfil the request for capacity increase submitted, the user may initiate the construction of a direct line or another natural gas distribution connection.

(k) By concluding the accession protocol with the natural gas distributor, the user purchases a capacity for the required location, which shall be granted for an indefinite period of time.

(l) The user is entitled to be allocated the distribution system capacity at the service location up to the amount of the purchased capacity.

(m) If there is a capacity demand exceeding the capacity purchased for the exit point of the distribution pipeline, and there is enough network capacity available to fulfil such capacity demand, the user may purchase capacity under connection agreement.

(n) If there is a capacity demand exceeding the capacity purchased for the given exit point of the distribution pipeline, and there is not enough network capacity available to fulfil such capacity demand, the user and the system owner shall enter into a connection agreement for network development.

(o) The DSO shall regularly update the records of the capacities purchased for accessing the natural gas distribution network (the distribution network  system accession capacities otherwise obtained previously and the capacities determined in the business regulations of the distributor).


Rejection of the request for connection

If the request for connection is rejected, the applicant may request the establishment of the connection at its own cost, on condition that the technical requirements set by the natural gas distributor are fulfilled. The owner of the device and the DSO shall agree on the ownership, operation and technical design of the connection point financed by the applicant.

Connection Agreement

(a) The technical specifications and time schedule of gas distribution system connection point shall be stipulated in the connection agreement concluded between the natural gas distributor and the market actor requesting the establishment of the connection point.

(b) The connection agreement shall include:

  1. the location of the connection point;
    ii. the owner of the connection point;
    iii. the purchased capacity of the exit point;
    iv. the registered capacity of the exit point;
    v. the amount of the connection fee as well as the mode and date of performance thereof;
    vi. the date as of which the purchased system capacity is available and the consumption is commenced;
    vii. the financial, technical and other conditions of providing the purchased capacity, including the ownership of the investment under construction;
    viii. the cases constituting the breach of contract and the legal consequences thereof;
    ix. the provisions applicable to the expiry and termination of contract;
    x. information regarding the usage of natural gas distribution system;
    xi. the sanctions regarding the use of capacity without concluding a natural gas distribution contract.”
  2. Business regulations

The TSO sets forth the conditions for connection in a capacity declaration based on the study prepared in regard to the hydraulic and technical conditions of capacity provision.

The financial conditions of connecting to the natural gas supply system or capacity increase are the following:

  • Users with a consumption of 2000 m3/h or less cannot be supplied with natural gas through the natural gas supply system as gas transmission system users, hence only consumers with a consumption exceeding 2000 m3/h can connect to the transmission pipeline. 
  • Connection shall mean a direct connection to the basic instruments specified in Appendix 2 of the licence for the supply of natural gas in compliance with safety and professional requirements. The establishment of connection points shall not include pipeline development or extension. 
  • In the case of connection or capacity increase, the owner of the natural gas supply system and the consumer intending to connect, or the consumer of the transmission pipeline requesting additional capacity and the network owner shall stipulate the conditions for connection in a written agreement. 
  • The enacting provisions of the agreement shall include that the Hungarian Energy Office permits the extension of the basic instruments of the natural gas supply system with the instruments necessary for the connection or capacity increase. 
  • The cost implications of the investment to be implemented in order to facilitate the connection to the natural gas supply system reflected in the transmission charges cannot result in the increase of the determined transmission fee. The examination shall be carried out for the first full gas year of the contract capacity. In the case of an allocated capacity of HUF 100 million and below, the arithmetic average of the capacities to be allocated in the first two years, in the case of an allocated capacity between HUF 100 million and HUF 500 million the arithmetic average of the capacities to be allocated in the first three years, and in the case of an allocated capacity of above HUF 500 million, the arithmetic average of the capacities to be allocated in the first four years shall be taken into account. The Hungarian Energy Office is entitled to examine the calculations regarding the change of transmission fee during the licensing procedure. 
  • If the establishment of the connection point results in the increase of the transmission fee, the party requesting the connection shall provide the development funds for establishing the connection point with a non-refundable resource in the amount that corresponds to the cost implications specified in the previous paragraph.
  • The part of the development resources needed for facilitating the connection or capacity increase that can be reflected in the determined fee without a resulting increase in fees, shall be provided by the party requesting the connection in the form of an interest-free loan. The loan shall be repaid in two equal instalments in the case of a loan amount of HUF 100 million and below; in three equal instalments in the case of a loan amount between HUF 100 million and HUF 500 million, and in four equal instalments in the case of a loan amount above HUF 500 following the installation of the transmission pipeline, once a year on the 30th day after the end of the given gas year, considering the below. 
  • In the case of each instalment, it shall be examined if the forecasted capacity has been allocated. If the capacity forecasted at the time when the development was approved has not been allocated following the connection or capacity increase, the consumer of the transmission pipeline and the owner of the connecting system shall pay a default penalty to the owner of the natural gas supply system. The amount of such penalty shall equal the amount of the instalment indicated in the previous section. By involving the requesting party in financing, it can be ensured that the project risks are assumed by the requesting party and not the other consumers.
  • The loan shall be repaid by bank transfer and by taking into account the default penalties charged under Subsection (1) of Section 296 of the Civil Code.
  • The data needed for the capacity examination procedure shall be provided to the TSO as specified in the Network Code.​