There are three long-term auctions that are held for firm entry capacity, and are as follows:
Quarterly system entry capacity (QSEC)
The QSEC auction is held annually in March and can be open for up to 10 working days. Entry capacity is made available in quarterly strips from October Y+2 to September Y+16 (where Y is the current gas year).
Users may provide investment signals through the QSEC, which subject to an economic test, may increase the levels of firm entry capacity that we are obliged to release at the relevant ASEP on an enduring basis. Alternatively, we may substitute unsold firm entry capacity from one ASEP in order to wholly or partially satisfy an investment signal at another ASEP.
After the QSEC auction has closed, allocations are completed in May after we have analysed submitted bids. For more details on the QSEC auction, download the 2020 QSEC Presentation.
Annual monthly system entry capacity (AMSEC)
The AMSEC auction is run annually in February, in which entry capacity is sold in monthly strips from April Y+1 through to September Y+2. This auction is 'pay as bid' and subject to a minimum reserve price.
The auction is open for four days from 8am to 5pm. Each auction window is separated by two business days, as detailed in the UNC. The processing and allocation is completed after 5pm on each day. Any unsold quantities from AMSEC are made available in the RMTnTSEC auction and sold in monthly bundles.
Rolling monthly trade and transfer (RMTnTSEC) and rolling monthly trade initiation surrender (RMTISSEC)
The RMTnTSEC auction is held monthly, at the month ahead stage. The auction is 'pay as bid', and subject to the same reserve price as AMSEC.
Users have the opportunity to surrender any excess entry capacity they hold at this auction during the rolling monthly trade initiation surrender (RMTISSEC) stage of this auction process; however, this will only be allocated if there is demand for entry capacity at the relevant ASEP from another shipper.
We shall allocate the surrendered entry capacity first, before allocating any unsold obligated amounts. This is the ‘trade’ part of the auction. Additionally, if there is insufficient unsold obligated entry capacity at an ASEP to meet demand, then entry capacity may be transferred from a nearby ASEP that has unsold entry capacity.
This is similar to substitution but in this case, the transfer is not enduring, it only applies to the relevant month. This is the ‘transfer’ part of the auction name. The complexity of this necessitates a trade and transfer methodology statement, which you can also find on the methodologies section of the our website.