dr. stefanie neveling bundesnetzagentur (federal network agency),
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Problems in the European gas market and high level overview of options Gas Target Model Workshop London, 11 April 2011. Dr. Stefanie Neveling Bundesnetzagentur (Federal Network Agency), Head of Section „ Access to Gas Transmission Networks and International Gas Trading”. Introduction. - PowerPoint PPT PresentationTRANSCRIPT
Dr. Stefanie NevelingBundesnetzagentur (Federal Network Agency),Head of Section „Access to Gas Transmission Networks and International Gas Trading”
Problems in the European gas market and high level overview of options
Gas Target Model Workshop London, 11 April 2011
2GTM Workshop in London, 11 April 2011
Introduction
The Target Model (Madrid Conclusions) should:• provide support for FG and NC development to
reach 2014 goal for completing the internal market • guidance also for Commission´s guidelines and Regional
Initiative / Int. Projects• Internal market means: real choice, more cross-border trade,
competitive prices…
• provide an outlook on the EU gas market beyond that date
Starting Point is problems the gas market faces
3GTM Workshop in London, 11 April 2011
Setting the scene
?
Challenges:• Internal market by 2014 Competition
• EU 20-20-20, integration of RES more CCGT’s? Power to Gas?
• Security of Supply N-1, Reverse Flow, access to diff. supply sourcesless domestic gas production more transit, new investment
LNGLNG
LNG
4GTM Workshop in London, 11 April 2011
Problem Identification
• 3rd Package makes Entry-Exit systems obligatory:• Large Entry-Exit Systems may reduce firm capacity
• Internal congestion may lead to cross-subsidisation• Small Entry-Exit systems are not market capable
• problem of “pan-caking” for long-distance transport
• For gas to flow where it is needed (price signal) there needs to be available capacity
• Contractual Congestion identified as a major problem, but not for all IPs• Recital 21: “There is substantial contractual congestion in the gas
networks.”• Definition: "contractual congestion" means a situation where the level of
firm capacity demand exceeds the technical capacity, Art. 2(21) Reg. 715/2009
• Commission proposal on Congestion Management
5GTM Workshop in London, 11 April 2011
Contractual Congestion
Historical utilisation rate at the intake point Baumgarten for TAG
0
1.000.000
2.000.000
3.000.000
4.000.000
5.000.000
6.000.000
Feb 2
005
Mrz
200
5
Apr 2
005
Mai
200
5
Jun
2005
Jul 2
005
Aug 2
005
Sep 2
005
Okt
2005
Nov 2
005
Dez 2
005
Jan
2006
Feb 2
006
Mrz
200
6
Apr 2
006
Mai
200
6
Jun
2006
Jul 2
006
Aug 2
006
Sep 2
006
Okt
2006
Nov 2
006
Dez 2
006
Jan
2007
Feb 2
007
Mrz
200
7
Apr 2
007
Mai
200
7
Jun
2007
Jul 2
007
Aug 2
007
Sep 2
007
Okt
2007
Nov 2
007
Dez 2
007
Jan
2008
Feb 2
008
Mrz
200
8
Apr 2
008
Mai
200
8
Jun
2008
Jul 2
008
Aug 2
008
Sep 2
008
Okt
2008
Nov 2
008
Dez 2
008
Jan
2009
Feb 2
009
Mrz
200
9
Apr 2
009
Mai
200
9
Jun
2009
Jul 2
009
Aug 2
009
Sep 2
009
Okt
2009
Nov 2
009
Dez 2
009
Jan
2010
Feb 2
010
Mrz
201
0
Apr 2
010
Mai
201
0
Jun
2010
Jul 2
010
Aug 2
010
Sep 2
010
Okt
2010
Nov 2
010
Dez 2
010
Jan
2011
Feb 2
011
Mrz
201
1
Nm
3/h
Committed Flow Rate including interruptible Measured Flow Rate including interruptible Nominal (technical)
0
100
200
300
400
500
600
700
01/
01/2
007
30/
04/2
007
28/
08/2
007
26/
12/2
007
24/
04/2
008
22/
08/2
008
20/
12/2
008
19/
04/2
009
17/
08/2
009
15/
12/2
009
14/0
4/20
10
12/0
8/20
10
10/1
2/20
10
GWh/d
technical capacity available capacity used capacity
Historical capacity utilisation of the WAG pipeline at the entry point from MEGAL (W-E)
0
100.000
200.000
300.000
400.000
500.000
600.000
700.000
800.000
Jan
2007
Mrz
200
7
Mai
200
7
Jul 2
007
Sep
200
7
Nov
200
7
Jan
2008
Mrz
200
8
Mai
200
8
Jul 2
008
Sep
200
8
Nov
200
8
Jan
2009
Mrz
200
9
Mai
200
9
Jul 2
009
Sep
200
9
Nov
200
9
Jan
2010
Mrz
201
0
Mai
201
0
Jul 2
010
m3/
h
Capacity booked Capacities used Design capacity
6GTM Workshop in London, 11 April 2011
Status of market integration in the NW region
• Significant indigenous gas production, but increasingly import dependent• Decoupled entry-exit zones implemented in almost every country• NBP most liquid hub (churn rate:14-15), Zeebrugge (4-6), TTF (3-4), NCG (2-
3) Gaspool (2-2,5), PEG Nord (1,5), trading volumes increasing• Increasing price convergence but still price differences • Significant infrastructure investments of European dimension (e.g.
Northstream)
Source: European Commission
Traded Gas Volumes on European Hubs
0 GWh
20.000 GWh
40.000 GWh
60.000 GWh
80.000 GWh
100.000 GWh
120.000 GWh
140.000 GWh
Aug
06
Okt
06
Dez
06
Feb
07
Apr 0
7
Jun
07
Aug
07
Okt
07
Dez
07
Feb
08
Apr 0
8
Jun
08
Aug
08
Okt
08
Dez
08
Feb
09
Apr 0
9
Jun
09
Aug
09
Okt
09
Dez
09
Feb
10
Apr 1
0
Jun
10
Aug
10
Okt
10
Dez
10
Feb
11
PEG North TTF NCG GPL (bis 01.10.2009 MG H-Gas Norddtl.) ZEE
7GTM Workshop in London, 11 April 2011
Status of market integration in the South-South East region
• Characteristics:• Large transit flows• Several small markets, i.e. domestic consumption between 8 and
15 bcm/a (except for Poland and Italy)• High dependency on Russian imports• Out of 10 MS in SSE, only 3 markets with reasonable
transparency on wholesale market prices• Only in some MS Entry-Exit System/VPs
• Problems:• High market concentration (wholesale and retail)• No liquid wholesale markets, few VPs• Low or no competition in retail markets• Poor West-East (reverse flow) capability• Poor North-South interconnections
8GTM Workshop in London, 11 April 2011
Status of market integration in the South region
TFC: 4,2 bcm C: 95% - U: 51%
TFC: 3,3 bcm C: 2% - U: 2%
TFC: 0,3 bcm C: 10% - U: 9%
TFC: 0,1 bcm C: 0% - U: 0%
Data: February 2011. Source ENAGAS-TIGF-REN. TFC (Total firm Capacity) – C (contracted) – U (used)
TFC: 0,15 bcmC: 80% - U: 52%
TFC: 3,1 bcmC: 92%- U: 59%
TFC: 0,9 bcmC: 100%- U: 58%
Region Characteristics:
• SGRI Demand 2010: France 52 bcm Spain 34,5 bcm - Portugal 4,3 bcm
• Highest European share of LNG supplies
• Satisfactory interconnection levels. • Available firm capacity, particularly in
LNG terminals. Absence of relevant congestions
• Security of Supply: Diversified supply origins
Relevant aspects/problems for GTM:
• Coordinated bundled capacity allocation F-S. TSOs proposal for coordinating capacity allocation between P-S
• Independent Balancing zones: France (3 zones), Portugal (1), Spain (1)• Existing Organised Markets in France. An organised market to be established soon in Spain.
• Market coupling: currently an alternative not equally achievable for all countries
9GTM Workshop in London, 11 April 2011
Overview of high level options
Improve effectiveness by realising economic pipeline investments
MECOS Model
Pillar 1:Enable functioning wholesale markets
• Establish Entry-Exit Zones (Market
Areas)
• Merge Market Areas (national or
cross-border)
• Establish Trading Region
Pillar 2:Tightly
connect markets
• Explicit auctions
•(Day-ahead) Implicit auctions/allocation
• Make available capacity for connection
(UIOLI/Overbooking)
Pillar 3:Enable secure
supply patterns
• Long term capacity auctions
• SoS Investments
10GTM Workshop in London, 11 April 2011
Overview of high level options
Source: LECG
LECG Focus on:
11GTM Workshop in London, 11 April 2011
Overview of high level options
Enable Markets: Connecting markets:• Market areas (sub-) national or
cross-border• Full vertical integration• Merging of market areas
• Taking physical connection into account
• Trading region• Merger of entry-exit systems
• Taking physical connection into account
• Seperate end-user zones with national balancing system
• Bundling of capacity• Harmonisation of products, Gas-day• Explicit Auctions• Make capacity available via UIOLI and/or
Overbooking
• Market coupling• Day-ahead implicit auctions/allocation as
possible element to be tested in pilots first
LECG + MECOS
LECG + MECOS
only MECOS
LECG + MECOS
MECOS & LECG
12GTM Workshop in London, 11 April 2011
Conclusions
• Different degrees of development; lack of Entry-Exit Systems, liquid hubs, functioning national markets• GTM needs to fit everywhere• Options in Target Model necessary;
• North-West region most developed, hub-prices converging
• Problems of contractual congestion and no perfect price alignment• Need to make spare capacity available;
• MECOS & LECG contain nearly same set of options: suitable framework for Target Model
13GTM Workshop in London, 11 April 2011
Thank you for your attention!
www.energy-regulators.eu
14GTM Workshop in London, 11 April 2011
Back-up
Source: Gas Matters, February 2011