Achieving results together Colin Lyle Colin.Lyle@efet.org Colin - - PowerPoint PPT Presentation

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Achieving results together Colin Lyle Colin.Lyle@efet.org Colin - - PowerPoint PPT Presentation

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North & Northwest Europe Gas Regional Initiative 1 st Steering Group Meeting The Hague 09/10/2006 European Federation of Energy Traders Achieving results together Colin Lyle Colin.Lyle@efet.org Colin Lyle The Hague 9 October 2006 1

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Achieving results together Colin Lyle

Colin.Lyle@efet.org North & Northwest Europe Gas Regional Initiative 1st Steering Group Meeting The Hague 09/10/2006

Colin Lyle The Hague 9 October 2006

European Federation of Energy Traders

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Colin Lyle 2 The Hague 9 October 2006

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Colin Lyle 3 The Hague 9 October 2006

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Colin Lyle 4 The Hague 9 October 2006

  • Priorities for the GRI Process
  • What can be achieved by the N/NW GRI?
  • Commitment and value

N/NW Europe Gas Regional Initiative - Achieving results together

Contents:

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Colin Lyle 5 The Hague 9 October 2006

VNG

Energinet

Svenska Kraftnät GTS Fluxys

EON-R.T.

National Grid Gas

EON-R.T.

E O N

  • R

. T . Board Gáis GSO G R T g a z ( H ) GRTgaz west

GRTgaz east

Enagas Snam Rete Gas

BEB

GRTgaz south Soteg Gassled Zone D Galp Transgas OMV/AGGM DEPA Gasum PGNiG MOL Slovtrans Eesti Gaas Latvijas Gaze Lietuvos Dujos Geoplin W ingas

3 H-gas zones

EON- R.T.

VNG

Energinet

Svenska Kraftnät GTS Fluxys

EON-R.T.

National Grid Gas

EON-R.T.

E O N

  • R

. T . Board Gáis GSO G R T g a z ( H ) GRTgaz west

GRTgaz east

Enagas Snam Rete Gas

BEB

GRTgaz south Soteg Gassled Zone D Galp Transgas OMV/AGGM DEPA Gasum PGNiG MOL Slovtrans Eesti Gaas Latvijas Gaze Lietuvos Dujos Geoplin W ingas

3 H-gas zones

EON- R.T.

  • NB. Not all trading

locations are shown

Virtual hub (in-grid balancing point) N B P

TTF

Huberator @ Zeebrugge Physical hub ( e.g border point) CEGH @ Baumgarten Less liquid gas trading locations

Priorities for the GRI Process Gas trading is developing across Europe

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Colin Lyle 6 The Hague 9 October 2006

Priorities for the GRI Process A European perspective

  • lead to convergence on a consistent market approach, not a series
  • f incompatible geographic markets within the EU
  • be structured in a completely transparent manner with information

accessible to all stakeholders on an equal basi

  • have ambitious and achievable targets that build on lessons both

from the electricity market and from the experience at gas hubs

  • have a clear timetable and commitment to implement

improvements

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Colin Lyle 7 The Hague 9 October 2006

progress on these issues will benefit the whole of Europe.

Providing information transparency and offering the maximum capacity to the market for the use of all main infrastructure, particularly storage and necessary services. Achieving fully effective unbundling of all main infrastructure

  • perators so that there is non-discriminatory access to all

services needed to enable trading at and between hubs. Addressing barriers resulting from historical agreements (e.g. for long distance transportation) through capacity release, re-negotiation and/or other stimuli to capacity trading. Aiming for large market-based (daily) balancing zones throughout Europe, and the provision of within-day information by the TSOs.

Priorities for the GRI Process The N/NW region can lead by example

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Colin Lyle 8 The Hague 9 October 2006

  • Priorities for the GRI Process
  • What can be achieved by the N/NW GRI?
  • Commitment and value

Contents:

N/NW Europe Gas Regional Initiative - Achieving results together

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Colin Lyle 9 The Hague 9 October 2006

  • Regulation
  • Transportation
  • Operability
  • Markets

What can be achieved by the N/NW GRI?

Workstreams:

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Colin Lyle 10 The Hague 9 October 2006

Quick win – Agree consistent obligations and incentives on TSOs.

E.g. “provide capacity to deliver gas to meet all reasonable demands for firm gas supplies”

What can be achieved by the N/NW GRI? Regulatory Coordination and Investment

Longer term deliverable – Evaluate and present findings for improved Cross-Border Regulation Quick win – Ensure full and consistent compliance with the Gas Transmission Regulation EC/1775/2005 Quick win and Longer term deliverable – a consistent regional supply/demand outlook report in compliance with national requirements in EU Directives

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Colin Lyle 11 The Hague 9 October 2006

  • Regulation
  • Transportation
  • Operability
  • Markets

What can be achieved by the N/NW GRI?

Workstreams:

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Colin Lyle 12 The Hague 9 October 2006

Improved access to Europe’s gas routes remains essential for market integration

Source: Eurogas Infrastructure map

What can be achieved by the N/NW GRI? Primary and secondary capacity markets

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Colin Lyle 13 The Hague 9 October 2006

At the May 2006 Madrid forum, EFET set out a 10 point plan for the fair allocation of x-border capacity. This included…

  • Greater transparency
  • Market based allocation mechanism
  • Correct treatment of existing capacity
  • Variety of contracts

What can be achieved by the N/NW GRI? Primary and secondary capacity markets

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Colin Lyle 14 The Hague 9 October 2006

GTS ERG BEB EnergiNet TTF VP-North VEP GTF Gassco

What can be achieved by the N/NW GRI? Primary and secondary capacity markets

Trial daily capacity auctions to improve liquidity and connection in the Northern region Cross Border Capacity Co-ordinated auctions at: Bunde-Oude Statenzijl Emden Ellund

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Colin Lyle 15 The Hague 9 October 2006

Quick win – Implement co-ordinated capacity auctions on a trial basis

E.g. Daily capacity auctions implemented early 2007 at specific cross border points to complement trading.

What can be achieved by the N/NW GRI? Primary and secondary capacity markets

Longer term deliverable – Compatible and consistent capacity products for all TSOs

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Colin Lyle 16 The Hague 9 October 2006

  • Regulation
  • Transportation
  • Operability
  • Markets

What can be achieved by the N/NW GRI?

Workstreams:

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Colin Lyle 17 The Hague 9 October 2006

A shared (H gas) quality specification setting out clearly defined parameters will help to facilitate greater cross- border trade. Gas meeting this quality specification that is delivered at any cross-border or inter-TSO point within the EU must not be refused on grounds of quality. The responsibility for investment to ensure that this can be achieved lies clearly with the TSOs overseen by their national regulators.

What can be achieved by the N/NW GRI? Gas quality uncertainties must be resolved.

Source www.EFET.org September 2006

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Colin Lyle 18 The Hague 9 October 2006

Rich LNG Rich LNG Richer Norwegian gas Richer Norwegian gas Enough lean gas to blend? Enough lean gas to blend? Capacity to move lean gas to IZT? Capacity to move lean gas to IZT? Can IUK accept the gas? Can IUK accept the gas? Can Bacton blend? Can Bacton blend? Enough lean gas to blend? Enough lean gas to blend? Source: GIE website for map www.gte.be

What can be achieved by the N/NW GRI? Gas quality uncertainties must be resolved.

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Colin Lyle 19 The Hague 9 October 2006

expected residual expected residual residual residual primary primary primary primary

End of the “day” Hour H

Primary interventions by shippers and traders, residual interventions by the TSO, cash-out at market price

What can be achieved by the N/NW GRI? Active market-based balancing helps liquidity

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Colin Lyle 20 The Hague 9 October 2006

Quick win – Full acceptance that gas quality is the responsibility of the TSO once gas is in a transmission system

E.g. Regulators bring TSOs/others together to implement

  • ptimum gas quality solution for transport of (comingled) gas

between Belgium and UK and publication of information affecting capacity.

What can be achieved by the N/NW GRI? Gas quality and interaction of balancing regimes

Longer term deliverable – Consistent regional implementation of market-based daily balancing with intraday trading and cash-out at the market price.

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Colin Lyle 21 The Hague 9 October 2006

  • Regulation
  • Transportation
  • Operability
  • Markets

What can be achieved by the N/NW GRI?

Workstreams:

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Colin Lyle 22 The Hague 9 October 2006

Congested entry points Expansion planned Part expansion planned

Source: ERGEG ERGEG assess there to be congestion in EU pipelines ERGEG assess there to be congestion in EU pipelines -

  • but limited TSO

but limited TSO plans for expansion. Is congestion physical or contractual? plans for expansion. Is congestion physical or contractual?

What can be achieved by the N/NW GRI? Information transparency and gas hubs

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Colin Lyle 23 The Hague 9 October 2006

What can be achieved by the N/NW GRI? Information transparency and gas hubs

Quick win – improve our standards of information provision to match ‘best in class’ (see August 2006 paper on gas information transparency)

Including full compliance with EC/1775/2005 and the GGPSSO before the next Madrid Forum.

Quick win – Participation of each network operator and the biggest local supplier at each hub, as set out in September 2006 paper on liquidity providers.

Agree an action plan and start implementation early 2007

Longer term deliverable – Larger and better connected hubs throughout the region.

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Colin Lyle 24 The Hague 9 October 2006

  • Priorities for the GRI Process
  • What can be achieved by the N/NW GRI?
  • Commitment and value

Contents:

N/NW Europe Gas Regional Initiative - Achieving results together

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Colin Lyle 25 The Hague 9 October 2006

Gas Information position paper August 2006

All available at www.EFET.org

September 2006 Note on liquidity providers Letter on N/NW Regional Initiative Gas Quality position paper October 2006 Gas capacity auction proposal

N/NW Europe Gas Regional Initiative – Commitment and value - recent publications

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Colin Lyle 26 The Hague 9 October 2006

N/NW Europe Gas Regional Initiative – Commitment and value – timing and focus

Quick wins – complete in less than 6 months Longer term deliverables – up to 2 years

Less questionnaires … more action