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Current Issues in the Internal European Gas Market
ClEP Gas Day, 3 September 2013
Presentation by
Simon Blakey, Special Envoy, Eurogas
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Members • 32 companies • 17 associations
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Two messages for EU and national energy policies
• The internal market for gas has made considerable progress
– New rules/policies should not put this at risk
– Customers will benefit best if there is plenty of gas supply to Europe
– Good network rules are needed, but alone do not guarantee competitive prices
• Gas is still the best, quickest, and most cost-effective route to a low carbon economy
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PROGRESS MADE
Energy transition in Europe:
An industry perspective
Energy transition in Europe:
An industry perspective
Current issues in the internal European gas market
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European gas today
• The vast majority of customers in Europe are in an integrated and effective market
• Still need for implementation of Third Package rules in some regions
– detracts from market progress elsewhere
• New network codes are making progress– but need to be finalized and implemented
– Coherence among codes needed
– More European outlook from national regulators
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The geographic core of the single European gas market
2010
Our peak market – 525 bcm
Our customers – 115 million
407 bcm
87 million
customers
In this core region
– 80% of volume
– 75% of customers
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A pan-European business • Most Eurogas corporate members buy, sell
and trade gas in more than one country:
– Over one-third do so in five or more countries
– Smaller markets still mostly national in character
• Pan-European purchasing by customers began in late 1990s:
– Pulp and paper, chemicals, steel took the lead
– Power companies looked for business synergies
• Entry-exit regimes and virtual trading are more recent— now make a big difference1
1 KEMA-COWI study Entry-Exit Regimes in Gas, July 2013
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Traded gas is no longer just a British/Dutch story …
NBP
25%
TTF
18%
ZEE
6%
NCG
20%
GASPOOL
11%PSV
10%
PEG
5%
CEGH
5%
ZTP
0.4%
NBP64%
TTF12%
ZEE3%
NCG9%
GASPOOL4%
PSV3%
PEG3%
CEGH2%
ZTP0.1%
Traded volumes Delivered volumes
4th Quarter 2012
Source: IHS
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… and Italy’s hub is no longer isolated
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Jan-2010 Jul-2010 Jan-2011 Jul-2011 Jan-2012 Jul-2012 Jan-2013
€/MWh
PSV - CEGH Spread
Transport cost
Dec 2011
New balancing
regime
March 2012
Daily capacity
auctions on TAG
pipeline
April 2013:
TAG capacity on
PRISMA
Source: IHS
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PROGRESS NEEDED
Energy transition in Europe:
An industry perspective
Energy transition in Europe:
An industry perspective
Current issues in the internal European gas market
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Looking forward – an industry perspective • Continue to progress the network codes
– Focus on coherence among among the codes
– Recognize market-led innovation (e.g. on bundled products, single booking)
• Limit risk of ‘de-Europeanization’
– Worrying consequences of national climate and energy measures … need to make ETS work
– Capacity mechanisms … need to coordinate
• Investment/new supply—need to make EU gas market more interesting in global context
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In a nutshell … • Speedy and coherent implementation of
internal energy market rules
• Stable and predictable climate and energy policies offering a level playing field for all low-carbon solutions
• Encouraging new supply for the benefit of customers
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Contact details Av. de Cortenbergh 172 1000 Brussels BELGIUM Phone: +32 2 894 48 48
[email protected] www.eurogas.org
