Cost calculation methodology

    Cost calculation methodology for local producers of green gas

    To promote the injection of green gas into the transmission network, Fluxys Belgium supports these connections and facilitates the injection in the following way:

    • Costs for the Injection Station: 50% at the expense of the producer.
    • Connection costs (pipeline): 100% covered by the producer unless the producer owns and operates the compression, see the explanation on the socialization of the connection cost.
    • Bank guarantee: The producer's share of the cost is covered by a bank guarantee corresponding to the transmission capacity to be booked for a period of 15 years.
    • Cash reimbursement: If the amount to be paid by the producer exceeds the value of the transmission capacity to be booked (at the regulated tariff) over a period of 15 years, this excess amount is covered by a cash payment. The cash portion covered by the producer will be reimbursed over a period of 15 years.
    • Electricity costs: The electricity costs for Injection Station are covered by the producer.

     

    Socialization of the pipeline costs

    In the case where the producer owns and operates the compression of the green gas into the Fluxys’ high-pressure network, the following socialization principle applies:

    • Fluxys determines the maximum amount it can socialize. This is calculated as 50% of the difference between the costs borne by Fluxys for an injection station with compression owned and operated by Fluxys, and an injection station without compression by Fluxys.
    • For a pipeline shorter than 500 m, the entire pipeline costs are socialized.
    • For a pipeline longer than 500 m:
      • The first 500 meters are socialized at 100%, calculated as follows:

    Pipeline costs × (500 m / total pipeline length)

      • The section of the pipeline longer than 500 m is socialized at 50%, calculated as follows:

    50% × pipeline costs × ((total pipeline length - 500 m) / total pipeline length)

    • This results in a new cash value of the pipeline costs, respecting the maximum socializable amount and with a minimum of €0.

    Below is a calculation example to further clarify this socialization principle for the injection of green gas into Fluxys’ high-pressure network (use of fictitious figures that are not representative):

    • Injection station costs – compression by Fluxys: 7,000 k€
    • Injection station costs – compression by the producer: 2,000 k€
    • Pipeline costs: 3,000 k€
    • Pipeline length: 1,500 m

    Applying the socialization calculation:

    • The maximum amount to be socialized is: (7,000 k€ - 2,000 k€) × 50% = 2,500 k€
    • The socialized amount for the first 500 meters: 3,000 k€ × (500 / 1,500) = 1,000 k€
    • The socialized amount for the remaining pipeline: 3,000 k€ × (1,000 / 1,500) x 50% = 1,000 k€
    • The socialized amount of 2,000 k€ is not higher than the maximum amount to be socialized of €2,500 k€.
    • The new pipeline costs are: 3,000 k€ - (1,000 k€ + 1,000 k€) = 1,000 k€

    This new value is then used to determine the bank guarantee and cash value.