EFET
market is constrained by limited interconnection capacity with Overall, transparency about the use of energy infrastructure
the rest of the EU. Important gas trading developments are also reduces risk, provides confidence and allows efficiency,
underway in other countries, notably at the Italian ‘virtual liquidity and security of supply to improve.
point’ and in Austria on the border with the Slovak Republic, Aggregated post-trade transparency requirements to (power
but access to capacity in international pipeline routes remains and gas) exchanges, brokers and multilateral trading facilities
a serious constraint. could ensure that clearer and more accurate pricing information
On the whole, the prevailing situation in the gas markets is delivered to the market. However, it should be noted that
of continental Europe is characterised by a lack of liquidity. requirements for regular reporting of individual wholesale
The absence of a reliable, transparent energy transactions would constitute an
spot gas price creates difficulties in
... regulators & legislators
unnecessary burden. Such reporting is
hedging and in devising reliable
financial instruments to manage risk.
should focus on putting in
likely to be disproportionate to any
possible abuses that will need to be
Incompatible pipeline access causes place clearer, harmonised addressed in the power and gas sectors
geographical fragmentation within
& legally binding rules
during the current liberalisation phase.
regions. Traded gas volumes are Regulators and legislators should
increasing, but much more needs to be done to establish focus on putting in place clearer, harmonised and legally
robust wholesale markets that can support consumers’ needs binding rules obliging owners and operators of infrastructure
throughout Europe. In particular, the following issues need in the power and gas sectors to publish detailed information
to be addressed: about the availability and utilisation of said infrastructure. In
•
Guaranteeing fair access to gas infrastructure. Priority access is this way, competitive wholesale power and gas markets have a
a problem observable at almost every high pressure pipeline chance to develop efficiently, to the benefit of the European
interface in Europe. There is a continuing failure to ensure economy and European society as a whole.
that sufficient capacity is built and that existing capacity is
fully used. Coherent mechanisms for capacity trading are ExpandingMarketHorizons
still missing. In the last few years, as part of their climate change policy,
•
Reducing the number of market areas. In order to create supra- EU Member States have made binding commitments to reduce
national gas grids and trading zones that transcend CO
2
emissions and increase the share of energy generated
national borders, market rules need to be simplified and from renewable sources. These developments have important
harmonised, and independent operators, responsible for repercussions on the structure and functioning of energy
several combined pipeline networks, need to be established. markets across Europe. Whether they act as a help or
•
Improving information provision. Information on the physical hindrance to the establishment of a single European market in
use and availability of gas infrastructure is often not electricity and gas largely depends on the ability of policy
available or not provided in a consistent or coherent form. makers to adopt a harmonised, market based approach to the
To build confidence and encourage trading, market achievement of targets.
transparency needs to be enhanced. TSOs need to provide With respect to carbon emissions, the requirements of cost
adequate information on available capacity and the actual minimisation, reduction of target delivery and market
gas flows to all market participants and regulators. compatibility would be met best by a well designed emissions
trading system. A single market price for carbon throughout
EstablishingTrustinInformationAvailability the EU would ensure that emissions reductions are made where
& TransactionPatterns the cost is lowest, although the precise impact of the cap-and-
One of the major preconditions for a well functioning trade system on the cost structure of energy at national and
internal market for electricity and gas is market transparency. sector level would still depend on national targets and
However, it is important to note that transparency has two national allowance regimes.
different dimensions: Disclosure of information about the use Trading can send short and long-term generation signals
of infrastructure by the owners or operators and disclosure of and eventually encourage investment in low carbon
information about the state of the market and wholesale technologies, therefore, carbon emissions trading and
transactions (which, if disclosed specifically to regulators, may wholesale electricity markets should be allowed to function
aid market monitoring). without undue regulatory or political interference. Distorting
66 worldPower2009
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