Gas Transmission Developments the role of GTE

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Gas Transmission Developments - the role of GTE
Milano, 21st November 2001
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Overview of presentation

• Background to GTE
• Work with other organisations
• Current initiatives
• Concluding thoughts

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Some background on GTE
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• Gas Transmission Europe

• Formed in July 2000
• At request of Madrid Forum
• European wide body representing
• gas transmission interests
• Independent of suppliers (and Eurogas)
• Separate budget statutes from 2002

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Membership

• Companies operating gas transmission systems with
  national borders
• Transportation arms of integrated companies
• Transmission not distribution
• Representatives of EU and accession countries
• Approximately 30 companies in total

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GTE Members
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Objectives

• Contribute to the development of a fully
  
• operational European gas market
• Enhance cross-border transmission
• Provide information on gas transmission
• Voice the opinion of the gas transmission
• industry in Europe

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Organisation

• Chairman Geert Joosten, Gasunie
• Plenary
• 5 seats per country
• Working groups Vice Presidents
• Tariffs Bernard Brelle, Gaz de France
• Capacity Fritz Gautier, Ruhrgas
• Balancing Brian Withington, Transco
• Interoperability Patrick Wailliez, Distrigas

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Activities

• Promoting communication dialogue
• Madrid Forum Joint Working Group
• Network user organisations
• Producing Workgroup Reports
• Providing information
• Web site www.gte.be
• Developing guidelines for good practice

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Working with other organisations
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Madrid Forum

• Fourth Meeting 2nd/3rd July
• GTE tabled 4 main workgroup reports
• Meeting welcomed contribution of GTE, but
• More faster progress needed
• Transparency of capacity gas flow information
• Infrastructure plan capacity constraints
• Cost reflective tariffs
• Guidelines for good practice
• European Gas Industry Standards Board
• Next meeting in February 2002

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Network users

• Bilateral meetings with
• EFET
• IFIEC
• Eurelectric
• OGP
• Eurogas
• First joint workshop 15th November 2001

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Issues arising from 15th November Network Users
Workshop
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Tariff Issues

• Tariff levels
• Non discriminatory treatment
• Basis of asset values
• Tariff design
• Flexibility of entry/exit versus point to point
• Benefits of back-haul
• Clarity, stability predictability
• Pancaking
• More concern with multiple contracting than
  pricing?

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Capacity Issues

• Facilitation of secondary market
• Standard shorter term products
• Anti-hoarding measures, use it or lose it
• Short versus long term allocations
• Fixed versus variable quantities
• Adequate investment
• Avoid constraints and price shocks
• Non discriminatory access information

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Balancing issues

• Availability of linepack storage services
• Hourly versus daily balancing
• Facilitation of balancing markets
• Level of imbalance charges
• Cost reflective versus punitive
• Financial neutrality of TSOs
• Operational Balancing Agreements

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Interoperability issues

• Gas quality harmonisation
• Communication protocols
• Interconnection Agreements OBAs
• Development of EASEE-gas organisation
• Membership, scope and constitution
• Need for quick wins

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Network User Reflections

• Valuable initiative constructive meeting
• Welcome further dialogue, but
• Proof of the pudding is in the eating
• Storage access is a worry
• Lets see more gas to gas competition

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What else is GTE doing at present?
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Current GTE Initiatives (1)

• Tariff Group
• Commissioning US study
• Gas flows at design conditions
• Capacity Group
• Publication of available capacities
• Allocation principles
• Balancing Group
• Imbalance charge comparisons principles
• Security of supply review

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Current GTE Initiatives (2)

• Interoperability Group
• Supporting formation of EASEE-gas body
• Gas quality
• Train ticket study
• Barriers to cross system transactions
• Guidelines for good practice
• Formalising GTE statutes

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Meanwhile back at the ranch
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Recent market initiatives

• Italy
• Entry/exit regime
• Holland
• Modified entry/exit
• Daily balancing
• UK
• Periodic review investment for flexibility
• Bunde-Emden hub proposal
• a catalyst for change?

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Concluding comments
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Some GTE remarks

• Provision of transmission infrastructure is a
  long term business
• Secure funding is vital
• Long term contracts have been an integral element
  of the development of systems
• Incentives for TSOs to continue to invest must be
  maintained as markets liberalise
• Electricity industry solutions do not necessarily
  translate to gas

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Some personal thoughts

• Successful liberalisation cannot ignore the
  Security of Supply dimension
• Just leave it to the market is too risky
• Centralised intervention isnt the answer either
• A clear policy framework is needed within which
  the market can then operate freely
• Minimum EU infrastructure standards
• Storage inventory obligations?
• Just enough is not enough