GEODE position paper on ERGEG recommendations on the 10 year ...
GEODE position paper on ERGEG recommendations on the 10 year ...
GEODE position paper on ERGEG recommendations on the 10 year ...
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<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> <str<strong>on</strong>g>positi<strong>on</strong></str<strong>on</strong>g> <str<strong>on</strong>g>paper</str<strong>on</strong>g> <strong>on</strong><strong>ERGEG</strong> recommendati<strong>on</strong>s <strong>on</strong> <strong>the</strong> <strong>10</strong> <strong>year</strong> gas network development planAn <strong>ERGEG</strong> Public C<strong>on</strong>sultati<strong>on</strong> Paper<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> fully supports <strong>ERGEG</strong>’s endeavour to start discussi<strong>on</strong> and prepare input for <strong>the</strong>Agency with <strong>the</strong> view to develop guidelines for ENTSOG. <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> recognises <strong>the</strong> issues ofl<strong>on</strong>g term planning as of primary importance in a perspective of l<strong>on</strong>g term infrastructuredevelopment in Europe. Therefore, <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> welcomes <strong>ERGEG</strong> Recommendati<strong>on</strong>s <strong>on</strong> <strong>the</strong> <strong>10</strong>-<strong>year</strong> gas network development plan of 11 March 2009 and would like to express thanks to<strong>ERGEG</strong> for <strong>the</strong> opportunity to participate in <strong>the</strong> c<strong>on</strong>sultati<strong>on</strong>s.Hence, <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> would like to address <strong>the</strong> questi<strong>on</strong>s annexed to <strong>the</strong> <strong>ERGEG</strong> c<strong>on</strong>sultati<strong>on</strong><str<strong>on</strong>g>paper</str<strong>on</strong>g>.1. What would be for you <strong>the</strong> benefits of <strong>the</strong> <strong>10</strong>-<strong>year</strong> gas network development plan?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> is c<strong>on</strong>vinced that <strong>the</strong> <strong>10</strong>-<strong>year</strong> development plan (fur<strong>the</strong>r referred to as “TYDP”) willc<strong>on</strong>siderably facilitate <strong>the</strong> development of a cross-European capacity market. Throughenhanced network investment coordinati<strong>on</strong>, as well as through reducing of both physical andc<strong>on</strong>tractual c<strong>on</strong>gesti<strong>on</strong>s, TYDP shall c<strong>on</strong>tribute to more effective capacity management andthus combat capacity shortages which pose danger to <strong>the</strong> liquidity of <strong>the</strong> gas market.TYDP is to be seen as an indicator of where and how <strong>the</strong> European gas market shall beadvancing. <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> believes that <strong>the</strong> main value of <strong>the</strong> TYDP will be this of a harm<strong>on</strong>isati<strong>on</strong>instrument. This instrument will enhance cooperati<strong>on</strong> in twofold directi<strong>on</strong> – first of all, <strong>on</strong> <strong>the</strong>line NRAs – EU. In this respect <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> welcomes <strong>the</strong> introducti<strong>on</strong> of Article <strong>10</strong>a of <strong>the</strong> newregulati<strong>on</strong> 1775/2005, obliging NRAs to adjust <strong>the</strong>ir <strong>10</strong> <strong>year</strong> developments plans to <strong>the</strong>TYDP. Accordingly <strong>the</strong> NRAs are held to adjust <strong>the</strong>ir steps to European developments.Sec<strong>on</strong>dly, <strong>the</strong> introducti<strong>on</strong> of <strong>the</strong> TYDP will c<strong>on</strong>tribute to an enhanced cooperati<strong>on</strong> betweenTSOs and stakeholders as <strong>the</strong> nati<strong>on</strong>al network development plans are to be developed out of<strong>the</strong> c<strong>on</strong>sultati<strong>on</strong> process as required by Article 22 of <strong>the</strong> amended gas market directive.1
2. What is <strong>the</strong> most important informati<strong>on</strong> you expect from <strong>the</strong> <strong>10</strong>-<strong>year</strong> gas networkdevelopment plan?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> believes that <strong>the</strong> TYDP’s major advantage is providing of a comprehensive pictureof gas transmissi<strong>on</strong> networks, <strong>the</strong>ir functi<strong>on</strong>ing and planned development in Europe.Especially with regard to <strong>the</strong> capacity market and <strong>the</strong> issues related to management ofc<strong>on</strong>gesti<strong>on</strong> spots, <strong>the</strong> <strong>10</strong>-<strong>year</strong> development plan can provide clarity <strong>on</strong> <strong>the</strong> ratio of demand andsupply <strong>on</strong> <strong>the</strong> gas market and allow for respective investments in <strong>the</strong> networks.3. Do you c<strong>on</strong>sider that <strong>the</strong> <strong>10</strong>-<strong>year</strong> gas network development plan, as proposed by<strong>ERGEG</strong>, will be beneficial to security of supply?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> takes note of <strong>the</strong> importance of <strong>the</strong> security of supply (SoS), especially as shown by<strong>the</strong> recent gas disrupti<strong>on</strong>. In this respect <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> shares <strong>the</strong> view of <strong>ERGEG</strong> that a broadanalysis of energy supply dynamics in Europe is needed, including a thorough analysis ofproducti<strong>on</strong>, new energy sources and potential supply risks. <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> believes that an in-depthanalysis of <strong>the</strong> European SoS issues could result in enhancement and harm<strong>on</strong>isati<strong>on</strong> ofEuropean efforts in combating supply disrupti<strong>on</strong>s. Only <strong>the</strong>n will it become apparent whereinvestment is needed in order to achieve a possibly high level of self-sufficiency even in casesof disturbance. With regard to streng<strong>the</strong>ning of <strong>the</strong> European SoS, <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> wishes that issuessuch as i.e. storage facilities, LNG projects and total of supplementary capacitates areattentively c<strong>on</strong>sidered while drafting <strong>the</strong> TYDP.4. Do you c<strong>on</strong>sider that <strong>the</strong> scope proposed by <strong>ERGEG</strong> is appropriate? Should it beenlarged?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> agrees with <strong>ERGEG</strong> that <strong>the</strong> scope of <strong>the</strong> TYDP should cover issues of broaderEuropean dimensi<strong>on</strong>, requiring cooperati<strong>on</strong> of relevant nati<strong>on</strong>al TSOs as well as thosenati<strong>on</strong>al issues which have potential impact <strong>on</strong> adjacent networks abroad. For <strong>the</strong> moment<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> supports <strong>the</strong> scope proposed by <strong>ERGEG</strong> as a reas<strong>on</strong>able approach, c<strong>on</strong>centrating <strong>on</strong><strong>the</strong> most important issues of European impact and leaving <strong>the</strong> regi<strong>on</strong>al matters to <strong>the</strong> regi<strong>on</strong>allevel, where <strong>the</strong>y can be tackled much more effectively. <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> believes however, that <strong>the</strong>issue of scope should remain open for new definiti<strong>on</strong>s and adoptable to new developments.2
5. Do you agree with <strong>the</strong> combined bottom-up / top-down methodology proposed in <strong>the</strong>document? What would be <strong>the</strong> most efficient process to achieve <strong>the</strong> top downapproach?The proposed combined bottom-up/top-down methodology seems to <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> <strong>the</strong> mosteffective and comprehensive manner to approach <strong>the</strong> preparati<strong>on</strong> of TYDP. Ideally bothperspectives are essential to produce a coherent picture of gas transmissi<strong>on</strong> networks. As for<strong>the</strong> top-down approach it is essential that all steps, even though decided centrally, are anoutcome of an inclusive process, including an intense stakeholders’ participati<strong>on</strong> at aEuropean level in form of stakeholders’ c<strong>on</strong>sultati<strong>on</strong>s. Never<strong>the</strong>less it must be born in mindthat <strong>the</strong> top-down approach is under all circumstances to be supplemented by <strong>the</strong> bottom-upapproach allowing c<strong>on</strong>siderati<strong>on</strong> of particular interests. This bipolarity of approach canalready be derived from <strong>the</strong> 3 rd package provisi<strong>on</strong>s and particularly from <strong>the</strong> co-existence ofnati<strong>on</strong>al and European <strong>10</strong>-<strong>year</strong> development plans. The target <strong>the</strong>n should be that <strong>the</strong> bothlevels are aligned and not c<strong>on</strong>tradicting <strong>on</strong>e ano<strong>the</strong>r.6. Would you agree with putting an obligati<strong>on</strong> <strong>on</strong> market participants to communicateall <strong>the</strong> relevant informati<strong>on</strong> about <strong>the</strong>ir future projects?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> c<strong>on</strong>siders <strong>the</strong> stakeholders’ involvement as a very important element of <strong>the</strong> TYDPprocess, since <strong>on</strong>ly through stakeholders’ involvement a c<strong>on</strong>clusive and meaningful TYDPcan be drafted. <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> believes that a good relati<strong>on</strong>ship with shippers and producers isimportant, never<strong>the</strong>less market participants should be positively obliged to communicaterelevant informati<strong>on</strong> needed for rendering of a comprehensive plan. Thus, <strong>the</strong> completeness of<strong>the</strong> informati<strong>on</strong> would be str<strong>on</strong>ger warranted. Positively defined obligati<strong>on</strong> to communicaterelevant projects would allow avoiding fricti<strong>on</strong>s as well as fragmentary informati<strong>on</strong> thatcounterfeit <strong>the</strong> overall picture. Necessarily, <strong>the</strong>se obligati<strong>on</strong>s shall be formulated in a way, notinterfering with <strong>the</strong> natural interest of market participants not to reveal all <strong>the</strong>ir operati<strong>on</strong>alplans.3
7. What would be <strong>the</strong> best way for ENTSOG (including its members) to collect datafrom stakeholders? Should that be carried out at a nati<strong>on</strong>al, regi<strong>on</strong>al or Europeanlevel?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> believes that any acti<strong>on</strong> which can be taken at a regi<strong>on</strong>al level and which remains aseffective as an acti<strong>on</strong> taken at a European level should be addressed regi<strong>on</strong>ally. This is <strong>on</strong> <strong>on</strong>ehand <strong>the</strong> reflexi<strong>on</strong> of <strong>the</strong> European subsidiary principle and <strong>on</strong> <strong>the</strong> o<strong>the</strong>r a c<strong>on</strong>tributi<strong>on</strong> tostreng<strong>the</strong>ning of <strong>the</strong> Regi<strong>on</strong>al Initiatives, who as local players are most appropriate bodies toapproach local stakeholders. The process of data collecti<strong>on</strong> could possible take form ofan<strong>on</strong>ymous market c<strong>on</strong>sultati<strong>on</strong>s or in <strong>the</strong> style of open seas<strong>on</strong> processes.8. Are <strong>the</strong> scenarios menti<strong>on</strong>ed appropriate? Would you have o<strong>the</strong>r proposals?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> believes that <strong>the</strong> proposed scenarios help to decide what <strong>the</strong> “shared visi<strong>on</strong> of <strong>the</strong>European gas dynamics” is. Through <strong>the</strong> developed scenarios, <strong>the</strong> demand evaluati<strong>on</strong> inEurope can be estimated. In this regard <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> c<strong>on</strong>siders <strong>ERGEG</strong> approach appropriate todevelop both scenarios for ‘business as usual’ as well as alternative scenarios, defining forexample European point of risks in <strong>the</strong> gas networks. Additi<strong>on</strong>al suggesti<strong>on</strong> by <str<strong>on</strong>g>GEODE</str<strong>on</strong>g>would be introducti<strong>on</strong> of a third ‘crisis scenario’.9. What are your views <strong>on</strong> <strong>the</strong> proposed EU network modelling and simulati<strong>on</strong> ofsupply disrupti<strong>on</strong>?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> shares <strong>ERGEG</strong>’S view <strong>on</strong> network modelling and simulati<strong>on</strong> of supply disrupti<strong>on</strong>. Inthis manner scenarios can be better developed as well as <strong>the</strong> flexibility and accessibility of <strong>the</strong>integrated systems can be better estimated. TYDP, based <strong>on</strong> network modelling andsimulati<strong>on</strong> of disrupti<strong>on</strong> should make it feasible to recognize investment needs in relati<strong>on</strong> tocross border capacities. The map of existing and decided infrastructure completed by <strong>the</strong>enhanced transparency provisi<strong>on</strong>s could str<strong>on</strong>gly c<strong>on</strong>tribute to establishing of more liquidcapacity trade and enable for more capacities to be allocated.<strong>10</strong>. Do you c<strong>on</strong>sider <strong>the</strong> drafting methodology and c<strong>on</strong>tent relevant? In your view,should <strong>ERGEG</strong> be more or less prescriptive?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> appreciates <strong>the</strong> work d<strong>on</strong>e by <strong>ERGEG</strong> in indentifying particular points to be includedinto <strong>the</strong> TYDP. For <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> <strong>the</strong> approach both towards <strong>the</strong> methodology as well as towards4
<strong>the</strong> c<strong>on</strong>tent should be an open and flexible <strong>on</strong>e. The ability to adjust <strong>the</strong> methodology andc<strong>on</strong>tent to <strong>the</strong> actual developments warrants flexibility and efficiency. <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> believes thatbest possible definiti<strong>on</strong> of methodology and c<strong>on</strong>tent can be developed after <strong>the</strong> firstexperiences have been ga<strong>the</strong>red. For <strong>the</strong> moment <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> agrees with <strong>ERGEG</strong> that <strong>the</strong> TYDPshould cover: scenarios development, descripti<strong>on</strong> and analysis of <strong>the</strong> integrated network –c<strong>on</strong>taining a map of existing and intended infrastructure, identifying physical c<strong>on</strong>gesti<strong>on</strong>s,summary of nati<strong>on</strong>al investment plans, supply and demand adequacy report, and identificati<strong>on</strong>of alternative projects as well as an implementati<strong>on</strong> m<strong>on</strong>itoring report. All <strong>the</strong>se requirementsestablish a ra<strong>the</strong>r prescriptive drafting framework. Never<strong>the</strong>less, <str<strong>on</strong>g>GEODE</str<strong>on</strong>g> support this detailedapproach as a clear layout for a comprehensive TYDP, as l<strong>on</strong>g as <strong>the</strong>re is some space left forexcepti<strong>on</strong>s and flexible adjustments.11. Do you c<strong>on</strong>sider it important to have a m<strong>on</strong>itoring report assessing and explainingdeviati<strong>on</strong>s from <strong>the</strong> previous plan?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> c<strong>on</strong>siders a m<strong>on</strong>itoring report to be included in <strong>the</strong> TYDP as a valuable instrument toprovide a complete and meaningful overview. Only through explanati<strong>on</strong> of <strong>the</strong> deviati<strong>on</strong>s <strong>the</strong>next plan can have <strong>the</strong> potential to be more accurate and thus provide more secure investmentfield, streng<strong>the</strong>n <strong>the</strong> security of supply and capacity trade. This should be updated annuallywith any major change updated <strong>on</strong> <strong>on</strong>going basis (notwithstanding <strong>the</strong> obligati<strong>on</strong> under 3 rdpackage to adopt new TYPD biennially).12. Is <strong>the</strong> c<strong>on</strong>sultati<strong>on</strong> procedure for <strong>the</strong> EU-wide <strong>10</strong>-<strong>year</strong> gas network developmentplan proposed in secti<strong>on</strong> 3.5 appropriate?<str<strong>on</strong>g>GEODE</str<strong>on</strong>g> c<strong>on</strong>siders <strong>the</strong> c<strong>on</strong>sultati<strong>on</strong> procedure for <strong>the</strong> EU-wide TYDP as appropriate. <str<strong>on</strong>g>GEODE</str<strong>on</strong>g>welcomes especially <strong>the</strong> idea of c<strong>on</strong>sulting <strong>the</strong> Europeans plans within <strong>the</strong> established fora asi.e. Madrid Forum and possibly discussed within <strong>the</strong> ad hoc panels in charge of presentingpreliminary evaluati<strong>on</strong>.4 June 20095