Transcript Document

ETSO-GTE
Supporting a secure and liberalized European energy market
A Joint Presentation
by
Mr Geert Joosten, GTE
Mr Juha Kekkonen, ETSO
22 January 2003
Contents
• Present role of ETSO and GTE in the European
liberalising electricity and gas market
• Overview of the European gas and electricity market
• Differences and similarities between these markets
Significance for legislative policy areas
European Transmission System Operators (ETSO)
ETSO was established in 1999 at
the request of the European
Commission
Direct membership of all
independent TSOs in the EU and
associated countries.
ETSO is the only EU wide
organisation specifically for
TSOs
31 members at present and
growing
Full Members
Associate Members
Achievements on tarification
• ETSO designed and implemented the 2002
and 2003 Cross-border transit compensation
mechanism
• Benefits for the Market
– Export fee reduced to 0.5 €/MWh. Users pay once to use the whole
European network (not distance related)
– A consistent definition by all TSOs of the “horizontal network” which
is used for international trade.
– Transparency - published regulated value of the horizontal network
Achievements on congestion management
• ETSO has proposed market-based solutions to
congestion management
• Initiated a pilot project on co-ordinated congestion
management between France, Belgium, Germany
and Netherlands.
• Transparency - Publication of commercial transfer
capacities
ACHIEVEMENTS ON CONGESTION MANAGEMENT
(2)
Strong capacity improvements on some of the most
congested interconnections in Europe: (Winter 2001/2 Winter 2002/3)
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Belgium / Germany  Netherlands:  1000 MW
France  Belgium / Germany:  700 MW
France  Spain:  300 MW
Norway  Sweden:  300 MW
France  Italy:  450 MW
Austria  Germany:  350 MW
New DC link Italy
Greece: 500 MW
New Directive and Regulation
• ETSO supports both proposals.
With the strong recommendation
that:
– TSOs should continue to be
involved in the decision-making
process
–The Florence Forum process
should continue.
Unbundling and Access
• All TSOs are compliant in regard to the
unbundling requirement
• ETSO supports legal unbundling. Many
TSOs also have ownership separation
• ETSO supports regulated access to
networks and publication of network
access tariffs
GTE members
GTE organization
Plenary
GTE secretariat
WG
WG
WG
WG
WG
Security
of
Supply
Capacity
.
Tariffs
.
LNG
.
Interoperability .
Executive Committee
www.gte.be
GTE’s vision and ambition
Vision:
The process towards a liberalized European gas market needs the
initiative and support from TSO’s to become one single competitive
market where (cross border) transport is secure and efficient.
Ambition:
GTE’s ambition is to participate in this process and to realize its
objectives.
GTE’s objectives
• Promoting the development of a fully operational and
integrated internal European gas market
• Facilitating cross-border transmission
• Supporting interoperability of the European transmission
systems
• Promoting market solutions
• Contributing to the setting of a clear and stable public
policy framework
• Voicing the opinion of the transmission companies in
Europe.
GTE activities
• Active contributor to the Madrid Process
• Communicate with stakeholders in the EU legislation and
liberalisation process
• Facilitator of cross-border transmission via website (grid map,
capacities etc.)
• Initiator of workshops with users of the grid
• Co-Founder EASEE-gas
Characteristics of
the European Gas Market
• Developed by integrated companies making production and transmission
decisions on a commercial basis.
• From the start EU gas systems have been well interconnected. However,
system characteristics of nations differ significantly due to national energy
policies.
• Gas supply is unevenly distributed geographically: 60% of EU production
already passes at least one border.
• Gas sources vary in composition: gas quality is a point of attention
• Growth market: gas use to increase up to 80% over next 30 years. EU
becomes more dependent on non-EU supply; Gas will travel longer
distances.
• Large, long term investments in infrastructure are needed to bring this
non-EU supply to the EU
Characteristics of
the European Gas transmission market
• Cross border transmission is an
essential part of EU gas market. More
than 60% crosses at least one border.
No cross border tariffs are charged
(contrary to popular belief)
GTE focuses on
interoperability; quality,
harmonisation of units
and business rules.
• Physical transport
Transmission takes compression and time;
gas travels at 20 km/hr.
Gas failure is potentially hazardous
Production and consumption are not
simultaneous; big variation in consumption
over the day, usually flat production rates.
Consumption is temperature dependent;
high but rare peaks in winter.
Role for
storage &
balancing rules
Characteristics of
the European Gas transmission market
• Congestion management
• Currently no major cross border
congestion. GTE focus on
Guidelines of Good Practice
• Security of supply
• Short term: very high but rare
consumption peaks
• Long term: Increasingly
dependent on non EU sources
• Long term: stable regulatory
and investment climate
• Long term: incentives to
contract transmission capacity
Gas vs Electricity
Similarities:
• Both are energy commodities
• Complex infrastructure (grid) needed
• Transmission grids need to be balanced
• System enhancements have long lead times and influence the
operation of existing parts of the grid
• Markets have changed substantially in the last few years and
will continue to do so for the next decade
Gas vs Electricity
Differences:
• Electricity produced at many locations, gas solely at finding location
• 60% of gas moves cross-border, approx. 9% of electricity does
• No cross border tariffs in gas
• Transit compensation in electricity
• Gas can be stored ; electricity not
• Gas competes against other fuels, electricity a universal service
• Gas only one of possible fuels for electricity production
• Gas failure may be hazardous
• Gas consumption strongly temperature dependent with very high,
but rare, peaks
Significance for policy areas
Security of Supply:
• Both gas and electricity need clear and stable investment climate
• Both gas and electricity need a balanced system for secure
operation of the grid
• LT gas supply heavily influenced by long distance investments;
• LT electricity supply requires heavy investments in local
production capacity and interconnectivity
Significance for policy areas
Congestion management and capacity allocation:
• Both gas and electricity markets benefit from transparency of available
transmission capacities. In gas confidentiality issues may play a role.
• In electricity investments in interconnections help relieve congestion and
the development of the European Electricity market
• In gas congestion in the internal market is much absent: Future
congestion depends on timely contractual arrangements between
suppliers and TSO‘s
Tariffication:
• Harmonised tariffication for electricity. No need for gas
Interoperability:
• Major point of attention for electricity and gas
Conclusion
Legislastion and regulation for gas
and electricity may have common
points.
However, differences need to be
taken into account.