1.
Regulatory framework
Changes in the European gas market, mainly triggered
by the liberalization process, will lead to new structures
and a redistribution of responsibilities. As transmission
and distribution activities have to be legally separated from
other activities in the gas chain, responsibility for security
of supply will be a shared responsibility of all market players.
At the same time take-overs and mergers are taking place.
All relevant market players should be involved in deciding
on the required levels of security of supply and how those
levels should be implemented. The end-consumers have their
demands and they pay for it. The gas industry is responsible
for supplying what is contracted. It will be a challenge for
the total gas industry to maintain the efficiency and reliability
which the end-consumers are used to.
Current and planned regulations for the gas market have an
impact on all parts of the gas supply chain, including conditions
and tariffs for infrastructure access and internal company
structures. Since the implementation of the European Gas Directive
in the national legislation of the EU member countries and
the accession countries, access to infrastructure has to be
given on the basis of negotiated or regulated third party
access (TPA). According to the second EU Gas Directive that
has been set into force in August 2003, access to transmission
and distribution networks will be based in the EU member states
on regulated TPA, in whatever form. The member states have
to transform the Directive into national law by mid 2004.
Most countries in Europe already have a regulatory authority
in place. Regulation should support market development including
the required investments in infrastructure. For that reason
it should be restricted to providing and enabling a framework
and a level playing field for all market participants. Unnecessary
regulation would only add to overheads and lead to distortion
in the market.
With respect to security of supply we see the main responsibility
with the market participants, especially when it comes to
the application of specific measures, like the use of flexibility
in the system or interruptible contracts. As legal unbundling
will take place in the EU, in all EU countries the new entities
will have to act according to their (new) responsibilities.
However, such a full-scale unbundling may cause risks in synchronizing
decision-making in production/supply and infrastructure, and
could also increase administrative and technical expenses
in the event of overregulation.
This may have a negative impact on the efficiency of the whole
gas industry and consequently lead to unnecessary increase
of tariffs and end consumer gas prices. The main problem would
be the obvious discrepancy between decision-making on the
infrastructure and decision-making on market developments/supply.
Lower investments in the infrastructure and discrepancies
between transportation/service contracts and supply/trade
contracts could seriously affect the security of supply.
The main elements which should be reflected in any market
structure are:
