Europe’s Gas Future
Onpaperit’scompetitive,buttomany,theEuropeangasmarketisviewed
as closed and opaque – an enigma. It’s now a full year since the
European Commission presented its Third Energy Package in which
developing market competition further was a key element.
Unfortunately,aswithpreviousCommissionDirectives,theEUbloc
isnottotallyunifiedontheroutetoacompetitivemarketplace.
Ahead of the first anniversary of the Third Energy
Package, Commodities Now (in association with the
European Energy Exchange, (EEX)) hosted a round-table in
London to discuss the current state of Europe’s gas market and the
challenges faced if the Commission is to realise its energy nirvana of a
fully competitive market.
Participating in the round-table were:
Oliver Maibaum,ManagingDirector,EEX.
Colin Lyle,GasCommitteeChairman,EuropeanFederationofEnergyTraders,EFET.
Heinrich Hick,PolicyOfficer,EuropeanCommission.
John Woodley,Co-HeadofEuropeanGospec,MorganStanley.
Chairingtheround-tablewasBBCjournalistNick Higham.
Nick Higham (NH) started by asking the panel for their views CL:Well,there’snodoubtthatthetradedmarketsforgashave
on gas trading and the UK model. spread out from the UK. The first to develop in continental
Colin Lyle (CL): Well, in the gas market the UK is an order of EuropewasZeebrugge,andwecannowseeliquiditydeveloping
magnitude ahead of any other trading point throughout the at the PEGs in France, the title transfer facility [TTF] in the
wholeofEurope,butitdidstartfirstsothatistobeexpected. Netherlands and now going further into Germany including
through the EEX. And then there’s a new wave, which we can
perhaps see coming in Spain and Italy and at the central
EuropeangashubbetweenAustriaandSlovakia[Baumgarten].
NH: Oliver, let me ask you then, what’s happening specifically
in Germany?
Oliver Maibaum (OM): We introduced, last year, a so-called
true contract model, which made transporting the gas easier
than having a whole range of contracts between the different
grid operators. So this was a major step to create a more
competitive environment. In addition, our federal office
networkagency limitedlong-termcontractssothatyoudon’t
Nick Higham
have these 20 year full supply contracts, which actually is
blocking competition. And new entrants are entering the
NH: Just historically, what was the key driver of this Germanmarket...thecompetitiveenvironmentisgrowing.
development in the UK? Was it regulatory action? Was it the fact
that the UK was also a significant producer? NH: Just sticking with a sort of overview, Heinrich, how
CL:Ithinkthattherewasthecomingtogetherofthepolitical fragmented do you think the European markets are? How
will to create a competitive market, the decision to establish a different are they? How far are they from coming together?
number of different suppliers, because you can’t have compe- HeinrichHick(HH):Whenwetalkabouttheshapeofmarket
titionifyoudon’thavecompetitors. weobviouslyliketorefertothesectorinquiry,thegroundwork
for an understanding of the fragmentation of the market. We
NH: Looking at the rest of Europe, what do you see as the looked at the competition conditions and market
most advanced other territories in the market? malfunctioning… [and] the UK model comes out very
COMMODITIES NOW SEPTEMBER 2008 69
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