Transcript PowerPoint Sunusu

Prepared by Barış EKDİ
Competition Law & Policy
in
Natural Gas Market
Cengiz SOYSAL
Coordinator of Dept. No. I
[email protected]
1
Prepared by Barış EKDİ
ISSUES IN THE TRANSITION TOWARDS LIBERALISATION
•
Change in the Role of the Government
•
Privatization
•
Competition, Regulation/Deregulation/Re-regulation
•
Emergence of the Independent Regulatory Agencies
•
Turkish Competition Authority (TCA)
1997
•
Energy Market Regulatory Authority (EMRA)
2001
2
Prepared by Barış EKDİ
Change in the Role of the Government
Emergence of the INDEPENDENT REGULATORY AGENCIES
State-owned
enterprises
PRIVATIZATION
Private
ownership
Success of Liberalization
Regulatory Governance
INDEPENDENT REGULATORY AGENCIES
3
Prepared by Barış EKDİ
Good Regulatory Governance
Competition Authorities and Sector Specific Regulators
Clarity of roles
:
and objectives
There should not be confusion between the functions of regulators and
Ministries or other agencies.
Accountability
:
legal system - ‘formal accountability’ about the decisions of the IRAs
Participation
:
contribution of regulated industry, consumers and other related parties
during regulatory process.
4
Prepared by Barış EKDİ
Good Regulatory Governance
Competition Authorities and Sector Specific Regulators
Transparency
:
Reasoning of decisions is important to reduce the risk of
unfairness.
Predictability
:
It is important to private investors to know that ‘the rule of
the game’ will not change.
Proportionality
:
The reason of the regulation (that is the market failure) and
the level of regulation
Autonomy
:
Administrative and financial
(Risk of CAPTURE  Political Capture, Regulatory Capture,
Self-Capture…)
5
Prepared by Barış EKDİ
Comparison between IRAs and Competition Authorities
•Goals/Objectives
•Basic Method or Approach
•Timing (ex ante vs. ex post)
•Frequency of Intervention
•Information Available
•Third Party Access - Çeaş Case (2002)
6
Prepared by Barış EKDİ
Scope of the Competition Act
– Restrictive Agreements, (Article 4, 5),
– Abuse of dominance (Article 6),
and
– mergers and acquisitions (Article 7).
– And COMPETITION ADVOCACY
» Natural Gas Sector Inquiry
» Electricity Wholesale and Retail Markets Inquiry
(Ongoing)
7
Prepared by Barış EKDİ
Demand / Infrustructure
Natural Gas Sector Inquiry
“Four Step Evolutionary Model”
Infancy
Growth
Time
Development
Maturity
Prepared by Barış EKDİ
Natural Gas Industries and Liberalisation Process
“Four Step Evolutionary Model”
WHOLESALE MARKET
INFRASTRUCTURE
DEMAND
STRUCTURE
Infancy
(0-15 years)
Initially, large-scale
customers are served.
State-owned vertically
integrated monopoly.
Under State control as the
rest of the industry.
Low number of participants.
Growth
(15-20 years)
Accelerated demand increase
Expansion of the
infrastructure by the state
Increase in the number of
participant
Development
(20-40 years)
Demand is approaching to
maturity
Sophisticated network
management,
infrastructure/network
companies’ profit
maximization requires
optimization of the use of the
network
High number of participants;
Increaseing customer
eligibility,
Increase in the churn ratio
Maturity
(40+ years)
Maturity in demand,
Price is formed in the market
in line with supply and
demand curves.
Sophisticated Network Code,
flexible network.
Reasonable profit margins
(competitive level of prices),
numerous market
participants,
Sophisticated financial and
derivatives market,
high levels of churn ratio.
Prepared by Barış EKDİ
Evolution of Turkish Natural Gas Market
14.000
INFANCY
12.000
GROWTH
11593
11332
12215
11130
10.000
9798
8.000
8333
km
7809
6078
6.000
5245
4510
4.000
2.000
3490
2000
845
Infancy stage
Growth stage starts
: 1987 - 2001
: 2001 -
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
Yıllar
20
02
20
01
20
00
19
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
19
89
0
Prepared by Barış EKDİ
Issues Confronted in the Liberalization Process of Natural Gas Markets
•
Competition in Wholesale Markets
•Horizontal competition
•Vertical integration/arrangements
•
Regulatory Framework Regarding the Infrastructure
•Third Party Access
•Balancing
•Transparency
•
Demand Structure
•Gas sales to the power plants
•Gas sales to the distribution utilities
Prepared by Barış EKDİ
Liberalization of Natural Gas Wholesale Market
90
Nijerya (LNG)
80
Cezayir (LNG)
Milyar Sm3
70
60
Azerbaycan
50
İran
40
30
Rusya (Mavi
Akım)
Rusya Batı (97)
20
Rusya Batı (86)
10
Türkiye Talep
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
20
10
20
13
20
16
20
19
20
22
20
25
20
28
0
Yıllar
Developments in International Natural Gas Markets
• Conventional long-term contracts with take-or-pay obligations
• Establishing trade hubs
• Spot prices in price indexation (alongside oil-indexation)
Prepared by Barış EKDİ
Liberalization of Natural Gas Wholesale Market
90
Nijerya (LNG)
80
Cezayir (LNG)
Milyar Sm3
70
– Liberalization of imports
– Opting out from contract release method
Azerbaycan
50
İran
40
30
Rusya (Mavi
Akım)
Rusya Batı (97)
20
Rusya Batı (86)
10
Türkiye Talep
0
19
86
19
89
19
92
19
95
19
98
20
01
20
04
20
07
20
10
20
13
20
16
20
19
20
22
20
25
20
28
• Horizontal Competition
60
Yıllar
• EU Energy Commissioner Günther Oettinger The game of 'divide et impera' (divide and rule), or a game of this type proposed by
Moscow cannot be and will not be accepted by EU member states – 2.5.2014
– Emphasizing gas release method
– Concentrations and Joint Ventures (co-operation and concentration)
• Decision Prima-Enerco, 18.7.2013, 13-46/585-256
– Gazprom/Gazprombank
– Coordinated effects of JVs
• Vertical Integration
– Forward integration of the resource countries’ exporters
• Vitality of sector-specific regulations on the control of vertical integration until growth stage ends.
Prepared by Barış EKDİ
Development of Natural Gas Markets in terms of Infrastructure
•
Third Party Access
– An efficient Exemption Regime for promoting ex novo entry (for Storage and LNG investments)
•
Balancing
– Completion of network stations investments by the distribution companies, related customers and BOTAŞ
• Sophisticated infrastructure and several market players
• Transparency
– Data relating to network availability, generation and storage should be available in a non-discriminatory
manner to ensure a level playing field
– Ensure that no collusion takes place on the basis of the published information
Prepared by Barış EKDİ
Development of Natural Gas Markets in terms of
Demand Structure
• Gas sales to the power companies and large industrial customers
• Gas sales to the distribution utilities (small industrial and commercial customers, households)
Prepared by Barış EKDİ
Interdependency between Gas and Electricity Markets
• Consumption profile of power plants is different than the rest of gas customers
• Power plants can facilitate wholesale gas market development
• Pre-requisites: strong and flexible gas physical networks, more storage capacity, sophisticated
financial and legal framework
Prepared by Barış EKDİ
Electricity Industry and Natural Gas Markets’ Development
• Power plants’ integration into gas industry (backward integration)
• Purchase Contracts between Power Plants and Gas Suppliers
• Duration
• Exclusivity
• Right of re-sales
• Interruptible vs. non-interruptible contracts
Prepared by Barış EKDİ
Gas Sales to Distribution Utilities
•
Balance: Competition vs. Consumer Protection
•
The role of the state in retail pricing of gas
•
Default supply / supplier of last resort practices and their improvement for more efficient retail
markets