October was particularly interesting in geo-political terms for energy and for gas in particular. Lithuania declared its gas independence with the arrival of its first LNG ship which (when operational in 2015) will end the country’s dependency on Russian gas – this illustrates the strategic role of LNG in terms of the diversification of gas sources. A multi-billion dollar deal was signed in Brussels whereby Russia agreed to ensure gas supplies to Ukraine until the end of March 2015. EU Heads of State agreed a 40% reduction in greenhouse gas emissions by 2030, a 27% EU-wide renewables target and to increase energy efficiency by 27%
The European Gas Regulatory Forum took place in Madrid. Besides our CEER presentations at the Forum on LNG and an assessment of the current role of gas storage to safeguard security of supply, we launched a consultation on our vision of the gas storage market. Our detailed LNG report (2009-2013) shows an increase in regasification and storage capacity (thanks to new terminals) and the strategic role that LNG can play in terms of security of supply, new services offered and new LNG uses.
We also continued to champion consumer interests, publishing our first report on how supporters of our 2020 Customer Vision are implementing its four "RASP" principles (reliability, affordability, simplicity, as well as protection & empowerment). In an effort to improve the reliability of distribution services to customers, CEER has published its advice (a set of 17 recommendations) on the quality of electricity and gas distribution services.
ACER-CEER Market Monitoring Report shows wholesale prices falling but not retail prices
CEER has, for the third year, worked with the EU energy regulators' Agency, ACER, in producing the annual ACER-CEER report monitoring Europe’s Internal Energy Market (IEM). In parallel, our national regulators each produce a national (country) report (see the 2013 national reports). What’s in the latest ACER-CEER Market Monitoring Report (MMR)? The MMR report, for the year 2013, comprises four core chapters: - retail electricity and gas markets; - wholesale electricity markets and network access; - wholesale gas markets and network access; and - consumer protection and empowerment. This 270+ page report is packed with data and a thorough analysis of progress towards the EU’s objective of single Internal Energy Market (IEM) in Europe.
Main Findings The main message of our 2013 report is that despite a general decrease in wholesale energy prices, gas and electricity retail prices continued to grow in 2013, although at a slower pace than in previous years. On average, the electricity bill for households increased by 4.4% while gas prices rose by 2.7%. Wholesale market integration improving, but more flexibility required At the wholesale level, market integration continues to progress for both electricity and gas. In 2013, the efficiency level in the use of electricity interconnectors continued to increase, due to market coupling, reaching a level of 77%. In the gas sector, the main challenge identified is the need to promote the liquidity of gas trading and ensure that all unused capacity, whether or not strategically acquired, can be easily returned to the market so that other shippers can use it if short-term trading opportunities arise.
What is hampering retail competition? The report identifies a vicious circle in many Member States wherein a lack of competition results in low switching rates, which is sometimes used to justify regulated tariffs which, in turn, can hamper competition. But, there has been some progress. In 2013, the number of Member States with regulated prices has fallen, for example in electricity from 18 to 15, compared to the previous year. Also hampering retail competition is the fact that the energy component on which retailers can compete is relatively small
The findings of our 2013 Market Monitoring Report reinforce our analysis and the cross-cutting proposals set out in our Bridge to 2025 proposals, published in September. Our findings and proposals also align with the European Commission’s own report on progress towards completing Internal Energy Market (13 October 2014).
• CEER report on the implementation of the 2020 Vision for Europe’s energy customers by its supporters (Ref. C14-SC-30-03) • CEER Status Review on monitoring access to LNG terminals in 2009-2013 (Ref. C14-GWG-111-03) • CEER Advice on the quality of electricity and gas distribution services (Ref. C14-RMF-62-04) • CEER-ACER Annual Report on the Results of Monitoring the Internal Electricity and Natural Gas Markets in 2013
Press Releases: • Why is the decrease in wholesale energy prices not reflected in retail prices? (22 October 2014) • Regulators report to Madrid Forum on strong storage situation and role of LNG in security of supply (15 October 2014) • Regulators raise some questions on the Commission’s Energy Market Report (13 October 2014)
Save the date (25-28 May 2015) for the 6th World Forum on Energy Regulation, Istanbul.