On 10th May 2007 ERGEG launched a public consultation on Secondary Markets – the way to deal with contractual congestion on interconnection points
Secondary markets for capacity rights are an important vehicle for capacity re-trading and thus provide for access to natural gas transmission systems within the borders of the EU.Effective secondary markets can be considered an important congestion management tool.
A study by regulators in the North West gas Regional Energy Market of the Gas Regional Initiative (GRI) shows that there are no liquid secondary markets for transmission capacity at North West European cross-border interconnection points. This is backed up by the findings of the Energy Sector Inquiry of the European Commission (January 2007), which covers the whole EU.
The objective of this ERGEG public consultation paper is to invite the views of stakeholders on:
- Whether the findings of the study for the North-West Region of the GRI with regard to the performance of the secondary market could or should reflect the performance of secondary markets in the rest of Europe
- If yes, whether the recommendations provided in this paper are applicable to the Europe Union.
This ERGEG public consultation paper suggests the following solutions for improving secondary market liquidity:
- establishment of a platform for the trade in secondary capacity rights which facilitates auctions of secondary capacity rights (e.g. (e.g. pilot project at the Bunde and Ellund interconnection points).
- stricter application of firm Use It or Loose It (UIOLI) on the primary market for all contracts including legacy contracts.
ERGEG invites all interested parties to comment on issues raised in the text. Any comments should be received by 4th July 2007 and should be sent by e-mail to: email@example.com
Any question to this document should in the first instance be directed to:
Mrs Fay Geitona
Tel. +32 2 788 73 30
Fax +32 2 788 73 50