Mr Walter Boltz

1
Status Report of the Gas Regional Initiative
Mr Walter Boltz ERGEG Gas Focus Group Chair
2
Structure of Presentation

• Background What do we want to achieve?
• Process established regions, state of evolution
• Progress achieved priorities, tangible results
  in regions
• Measurable Results - Benefits to network users,
  consumers
• Coherence and convergence
• Way forward

3
Background What do we want to achieve?

• PRACTICAL OUTPUT
• IDENTIFICATION of existing barriers to
  entry/obstacles to regional market integration
  (Set Priorities)
• market liquidity
• trading activities and competition, increase
  number of active traders in the region
• TPA efficiency through harmonised TPA rules
  market oriented and cost-based offer of transport
  services and flexibility tools sufficient
  availability of transport capacities
• security of supply and competition through
  diversification of sources and sufficient
  availability of transport capacities
• ENSURE COORDINATION AND COHERENCE BETWEEN
  REGIONS ? TOWARDS A SINGLE MARKET

4
Gas Regional Energy Markets (REMs)
5
Current state of evolution
Establishment of the Gas Regional Initiative
(GRI)
April 2006
Action Plans and Priorities have been defined
Sept 2006
First tangible results
January 2007
Work on identified priorities (IG, enabler
groups)
Feb 2007
Assuring coherence and convergence
beyond 2007
6
Common GRI Priorities

• All the regions have identified the following 4
  priorities

Inter-operability
Hubs

• Improve the functioning of existing Hubs
• Establish the Hubs

• Identify interoperability problem
• Improve interoperability

1 GRI3 regions
Transparency
Inter-connection

• Monitor the level of transparency
• Improve transparency

• Identify interconnection problems
• Increase interconnection capacity (better use
  of capacity or new capacity

7
Tangible results in each Gas REM

• North
• Day-ahead-auctions for improvement of the
  secondary capacity market (at IPs Bunde and
  Ellund)
• South
• Agreement to increase interconnection capacity
• SSE
• Detailed monitoring of the Gas Regulation
  1775/2005 - improvements in transparency and
  compliance
• Accelerated pace for conclusion of OBAs
  (Operational Balancing Agreements)

8
Translating priorities into measurable results
Priorities
Beneficiaries

• Interoperability

Consumers
Measurable Results
Hubs
Traders
Transparency
Network users
Interconnection
Producers
9
Measurable results concrete criteria

• Measurable Benefits to network-users (e.g.
  shippers) criteria
• One-stop-shop offered by TSOs
• Harmonized tariff systems
• EASEE Gas standards fully applied
• Measurable benefits to consumers criteria
• Switching behaviour/rate
• Decreasing Price differences between incumbent
  and alternative suppliers
• Harmonisation of general terms and conditions,
  especially with regard to minimum contract
  duration
• Increased competition between more market actors

10
Measurable results concrete criteria

• Measuring future success
• High level quantitative measures (e.g. new
  entrants, number of traders at hubs or price
  convergence at hubs, market share and
  concentration ratios) are indicators to the
  success of market development and market
  integration (i.e. the GRI objective).
• ERGEGs micro-level assessment of the success
  of the Regional Initiatives will focus on
• Assessment of the overall process including
  stakeholder views
• Individual solutions implemented in the regions
  which reduce barriers (e.g. increase in liquidity
  from standardising contracts at gas hubs)

11
Ensuring convergence and consistency

• ERGEG Convergence and consistency report to be
  presented to the
• next Madrid (and Florence) Forum
• How do specific solutions facilitate trade,
  market integration?
• Assess remaining barriers to market
• integration across regions
• Assess linkages between GRI
• and ERI

12
Way forward

• The next 6 months
• Further work on identified priorities
• Ongoing monitoring of compliance with Regulation
  1775/2005 ? Enforcement action where necessary
• Public consultation on
• Regional One-stop-shop service provider
• Regional entry-exit system
• Structuring the dialogue
• Regular communication with the European
  Commission on progress in the regions
• Regular communication with Ministries on progress
  in the region
• Strong involvement of all stakeholders
• The more support - the faster progress will be
  delivered

13
Is there real choice for residential gas
customers ? 2006
Actual switching rates in percentage terms (in )
Colour codedAre gas HH customers offered gas by
at least one alternative supplier cheaper than
the incumbent?
Source CEER/ERGEG, Gas Working Group, 2006
Red No
17
11
12
Green Yes
4
Green whiteonly in Flanders
lt1
Dark greyInformation notavailable
19
14
Is there real choice for residential gas
customers? 2008
Actual switching rates in percentage terms (in )
Colour codedAre gas HH customers offered gas by
at least one alternative supplier cheaper than
the incumbent?
Source CEER/ERGEG, Gas Working Group, 2006
Red No
17
11
12
Green Yes
4
Green whiteonly in Flanders
lt1
Dark greyInformation notavailable
19
15
Thank You

• More information on the
• Gas Regional Initiative (GRI) is available at
• www.ergeg.org
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