Abstract
This chapter sets the scene by familiarising readers with the role of natural gas for the European economy. The long-term natural gas demand outlook is becoming more uncertain with policies towards the reduction of CO2 and other GHG emissions. This creates a risk of over-investment in gas and raises the question of whether there is a need to build additional import infrastructure. In relation to this, this chapter explains how pipelines are developed under the evolving EU energy acquis and provides an initial analysis of the EU’s natural gas markets attractiveness for the suppliers.
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Notes
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- 15.
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- 16.
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- 22.
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- 23.
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- 24.
In 2011 due to an earthquake that triggered a tsunami, the nuclear disaster at the Fukushima I Nuclear Power Plant in Japan caused loss of all nuclear capacity which previously provided 26% of power supply and resulted in greater demand for global supply of LNG. Since 2012 Qatar has been the second largest suppliers of LNG to Japan. See Japan Country review available via U.S. Energy Information Administration, available at: http://www.eia.gov/.
- 25.
This was due to the fact that pipelines are natural monopolies, Dag Harald Claes, The Process of Europeanization—The Case of Norway and the Internal Energy Market (ARENA Working Papers WP 02/12).
- 26.
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- 27.
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- 28.
Council Regulation No. 1775/2005 of the European Parliament and of the Council of 28 September 2005 on conditions for access to the natural gas transmission networks [2005] OJ L289/194 (Regulation 1775).
- 29.
Energy Charter Treaty, 2080 UNTS 95; 34 ILM 360 (1995) (ECT) was opened for signature in Lisbon 17.12.1994 and entered into force on 16.04.1998.
- 30.
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- 31.
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- 33.
“The security of energy supply is an essential element of public security and is therefore inherently connected to the efficient functioning of the internal market in gas and the integration of the isolated gas markets of Member States”, Gas Directive, recital 22.
- 34.
Preamble 21, Gas Directive.
- 35.
Art. 32, Gas Directive.
- 36.
Art. 36, Gas Directive.
- 37.
Article 4 requires Member States to take all appropriate measures to ensure fulfilment of the obligations arising out of the Treaties or resulting from the acts of the Union institutions, Treaty on European Union (Maastricht text), 29 July 1992, 1992 OJ C191/1 (Maastricht TEU).
- 38.
Decision No. 994/2012/EU of The European Parliament and of the Council of 25 October 2012 establishing an information exchange mechanism with regard to intergovernmental agreements between Member States and third countries in the field of energy, recital 1, 2, 9 and 11.
- 39.
Regulation (EU) 2017/1938 of the European Parliament and of the Council of 25 October 2017 concerning measures to safeguard the security of gas supply and repealing Regulation (EU) No. 994/2010. (Text with EEA relevance.)
- 40.
Conclusions of the 6th EU–Russia Gas Advisory Council Vienna, 29 January 2013.
- 41.
Azerbaijan started first gas deliveries to Turkey via TANAP on 30 June 2018. The first gas deliveries to Europe via TAP are expected to start in 2020.
- 42.
Azerbaijan’s SOCAR Signs Deal to Buy 66% of Greece’s Gas Grid Operator DESFA, Platts, 23.12.2013, available at: http://www.platts.com/latest-news/natural-gas/moscow/azerbaijans-socar-signs-deal-to-buy-66-of-greeces-26569771.
- 43.
Art. 11(5)b, Gas Directive.
- 44.
Commission Opinion of 17.10.2014 correcting Opinion C(2014) 5483 final of 28 July 2014 pursuant to Article 3(1) of Regulation (EC) No. 715/2009 and Articles 10(6) and 11(6) of Directive 2009/73/EC—Greece—Certification of DESFA, C(2014) 7734 final.
- 45.
Art. 36, Gas Directive.
- 46.
The OPAL gas pipeline is a ground-based continuation of the North Stream gas pipeline, which supplies Russian gas to Western Europe via the Baltic Sea bed. For factual information visit OPAL pipeline’s home page available at: http://www.opal-gastransport.de/home.html?L=1.
- 47.
The ‘Gazelle’ pipeline crosses the Czech Republic and connects the OPAL pipeline in Eastern Germany with the MEGAL pipeline system in Southern Germany.
- 48.
Factual information relating to the Nord Stream project is available at: http://www.nordstream.com/en.
- 49.
Commission Decision of 20 May 2011 on the exemption of the ‘Gazelle’ interconnector according to Article 36 of Directive 2009/73/EC; the Decision of the German Regulatory Authority of 2011 are available at: http://ec.europa.eu/energy/infrastructure/exemptions/doc/exemption_decisions.pdf.
- 50.
The European Commission, together with European Member States, is deciding on which energy projects should be given the status of a Project of Common Interest (PCI) at the EU level and thus be subject to preferential treatment in the Member States and benefit from faster and more efficient permitting procedures. Such projects are considered to be of public interest from an energy policy perspective and can under certain conditions be also eligible for EU co-financing.
- 51.
Proposal for a regulation of the European Parliament and of the Council on Union guidelines for the development of the Trans-European Transport Network Brussels, 19.10.2011 {COM (2011) 650 final}, Art. 7.
- 52.
Art. 9, 32, 41 (6), 41 (8) and 41 (10), Gas Directive.
- 53.
Commission Decision of 16.5.2013 on the exemption of the Trans Adriatic Pipeline from the requirements on third party access, tariff regulation and ownership unbundling laid down in Articles 9, 32, 41(6), 41(8) and 41(10) of Directive 2009/73/EC, para. 4.1.
- 54.
TAP Exemption Decision, para. 4.1.10.
- 55.
Communication from the Commission, European Neighborhood Policy Strategy Paper {COM (2004) 373 final}, 12.5.2004.
- 56.
As of November 2014 this includes Albania, Bosnia and Herzegovina, Iceland, Kosovo, Montenegro, Serbia, The Former Yugoslav Republic of Macedonia, and Turkey. More information available via: http://ec.europa.eu/enlargement/.
- 57.
The European Economic Area (EEA) unites the EU Member States and the three EEA EFTA States (Iceland, Liechtenstein, and Norway) into an Internal Market governed by the same basic rules.
- 58.
New TEN-T Guidelines proposal {COM (2011) 650}, Art. 3(b).
- 59.
New TEN-T Guidelines proposal {COM (2011) 650}, Art. 8.
- 60.
Commission Regulation (EU) No. 984/2013 of 14 October 2013 establishing a Network Code on Capacity Allocation Mechanisms in Gas Transmission Systems and supplementing Regulation (EC) No. 715/2009 of the European Parliament and of the Council, OJ L273.
- 61.
Commission Regulation (EU) 2017/459 of 16 March 2017 establishing a network code on capacity allocation mechanisms in gas transmission systems and repealing Regulation (EU) No. 984/2013, OJ L72/1 (CAM NC).
- 62.
Katja Yafimava, Building New Gas Transportation Infrastructure in the EU—What Are the Rules of the Game? OIES 2018.
- 63.
CAM NC, Art. 11(3).
- 64.
Regulation 1775, Art. 18(3).
- 65.
In April 2013 major European TSOs from Austria, Belgium, Denmark, Germany, France, Italy and the Netherlands established a joint European capacity platform called PRISMA to implement Regulation on Capacity Allocation Mechanisms.
- 66.
Regulation 1775, recital 19 and Art. 13(1).
- 67.
The network code on rules regarding harmonised transmission tariff structures for gas (TAR NC) is the Commission Regulation (EU) 2017/460 of 16 March 2017 establishing a network code on harmonised transmission tariff structures for gas.
- 68.
That said, there are still certain separate transit systems within the EU such as Bulgaria and Romania where no third-party access is guaranteed. Furthermore, the Yamal pipeline system in Poland uses a peculiar entry exist system covering only one large trunk pipeline with no virtual points, see Study on Entry–Exit Regimes in Gas, Part A: Implementation of Entry–Exit Systems, DNV KEMA, by order of the European Commission—DG ENERGY, 11.12.2013, available at: https://ec.europa.eu/energy/sites/ener/files/documents/201307-entry-exit-regimes-in-gas-parta.pdf.
- 69.
Council Regulation No. 715/2009 of 13 July 2009 on conditions for access to the natural gas transmission networks and repealing Regulation (EC) No. 1775/2005 [2009] OJ L211/36 (Gas Regulation), Art. 13.
- 70.
Recital 32, Gas Directive.
- 71.
Framework Guidelines on rules regarding harmonised transmission tariff structures for gas 29 November 2013.
- 72.
ACER Public Consultation on the Bridge Beyond 2025, PC_2019_G_06, Consultation period: 23 July 2019–1 September 2019.
- 73.
CAM NC, Art. 3.4.
- 74.
CAM NC, Art. 6.
- 75.
The European Federation of Energy Traders (EFET), An EFET Position Paper: Advancing the EU Internal Energy Market: Sector Priorities for the Juncker Commission, 12.11.2014, available at: http://www.efet.org/.
- 76.
Article 2 of Regulation 715 defines them as follows: “Contractual congestion, means a situation where the level of firm capacity demand exceeds the technical capacity [and] Physical congestion, means a situation where the level of demand for actual deliveries exceeds the technical capacity at some point in time.”
- 77.
ACER annual report on contractual congestion at interconnection points (Period covered: Q4/2013), para. 37.
- 78.
Regulation 715, Annex I, guidelines on congestion-management procedures in the event of contractual congestion, para. 2.2.
- 79.
ACER annual report on contractual congestion at interconnection points (Period covered: 2017).
- 80.
Commission Regulation (EU) No. 312/2014 of 26 March 2014 establishing a Network Code on Gas Balancing of Transmission Networks Text with EEA relevance, OJ L91.
- 81.
Draft Vision for a European Gas Target Model: A CEER Public Consultation Paper, p. 8.
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- 83.
Kim Talus, United States Natural Gas Markets, Contracts and Risks: What Lessons for the European Union and Asia-Pacific Natural Gas Markets? Energy Policy, Volume 74 (2014), p. 33.
- 84.
Art. 9 and 11, Gas Directive.
- 85.
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Commission Staff Working Document Accompanying the Document Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Energy Prices and Costs in Europe, Brussels, 9.1.2019 SWD (2019) 1 final, Part 1/11.
- 88.
Based on data from PRIMES, ENTSO-E, KEMA and ECOFYS.
- 89.
Trans-European Energy Infrastructures: The New Guidelines and the Connecting Europe Facility, Policy Officer European Commission Kitti Nyitrai, DG Energy, Internal Market I: Networks and Regional Initiatives.
- 90.
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Mete, G. (2020). Setting the Scene. In: Energy Transitions and the Future of Gas in the EU. Energy, Climate and the Environment. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-32614-2_2
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