Mediterranean Energy Highways: an urgent need

Regulation and Institutional Framework

Rocío PrietoD t G Di t CNEDeputy Gas Director - CNE

Naples, 17th November 2011 1

Index

Regulatory and Institutional FrameworkRegulatory and Institutional Framework

1. Overview of Mediterranean countries regulationMEDREG I tit ti l tiMEDREG Institutional cooperationDegree of development of gas markets

2. MEDREG Gas AG: promoting integration of gas markets in the Mediterranean.

TransparencyInfrastructuresThird Party Access

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Overview of Mediterranean countries regulation:MEDREG Institutional cooperation

MEDREG: Association of Mediterranean Regulators for Electricity and Gas.

M d i bl d h i d l

MEDREG members

Medreg aims to promote a transparent, stable and harmonized regulatory framework in the Mediterranean Region, providing the maximum benefits to energy consumers.

Medreg can not impose mandatory obligations on gas regulatory provisions to

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Medreg can not impose mandatory obligations on gas regulatory provisions to their members. Medreg intends to foster cooperation, detection of common good practices, information exchange and assistance among members fostering a permanent discussion framework.

Overview of Mediterranean countries regulation:Degree of development of gas markets

There are different market liberalization degree in the region.The more liberalized a gas market is, the more likely is that its gas regulation is more

developed: TPA regulated, more transparency provided, NRA´s has moredeveloped: TPA regulated, more transparency provided, NRA s has more competencies for the approval of access rules, tariffs, unbundling provisions….

Progressive liberalization of gas markets is fundamental for

the establishment of

a futurea future Mediterranean

Energy Community. y

MEDREG has to play a pivotal

role in this purpose

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purpose

Source: MEDREG GAS AG Transparency Benchmarking

Index

Regulatory and Institutional FrameworkRegulatory and Institutional Framework

1. Overview of Mediterranean countries regulationMEDREG I tit ti l tiMEDREG Institutional cooperationDegree of development of gas markets

2. MEDREG Gas AG: promoting integration of gas markets in the Mediterranean.

TransparencyInfrastructuresThird Party Access

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MEDREG GAS AGAreas of work

MEDREG GAS AG works on possible recommendations and requirements that could lead to the development of an

i t t d titi d f ti i k t i thintegrated, competitive, secure and functioning gas market in the MEDREG region.

Subjects covered on the GAS AG works:Subjects covered on the GAS AG works:

Present and future infrastructure needs from the technical, economic and financial perspectives;

Improvement of the security of supply within the region; Unbundling of supply, transmission, storage andUnbundling of supply, transmission, storage and

distribution; Transparency of market information and services; Non discriminatory TPA to gas infrastructure;Non discriminatory TPA to gas infrastructure;Tariff methodologies; Increased cooperation among member countries on the

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helpful regulation;

MEDREG GAS AG: Work methodology and Task Forces

MEDREG GAS AG , within its analytical and recommendatory role defines , y ythe typology of its outcomes. Mainly the Group elaborates:

1 Studies for the assessment of current status of diverse topics in the1. Studies for the assessment of current status of diverse topics in the region, with the information provided by MEDREG members on their national systems

2. Guidelines of Good Practice on a variety of regulatory subjects, agreeing among members the recommendations

Currently the are 3 active Task Forces focusing on:

1. Transparency (CNE leads the TF)2. Infrastructures (EMRA leads the TF)3. Third Party Access conditions (ERSE and CREG lead the TF)

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3. Third Party Access conditions (ERSE and CREG lead the TF)

MEDREG GAS AG: Transparency Task Force

• In March 2009 the GA approved the Guidelines of Good Practice on Transparency, containing recommendations on transparent and non-discriminatory access to informationdiscriminatory access to information.

• The Action Plan 2010-2012 included the task of “Investigating the transparency status in the region through a possible monitoring of the GGP

t ”on transparency”

• With this aim the Gas AG assessed the transparency status in Medreg countries by monitoring the accomplishment of the GGP on y g pTransparency

• Questionnaires were elaborated, circulated and fulfilled by Gas AG MembersMembers

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Results were analyzed and presented by the Ad-hoc Group on June 2011. Available at the web page

MEDREG GAS AG: Contents of the GGP on Transparency

Information to be published in national language(s) and English, on Internet and without any charge,

Transparency requirements.

Description of the gas system: entry and exit points, maps, detailed description of

the LNG and storage facilities

Services offered, charges for these services and penalties in case of over/under-

utilization of the contracted capacity;

Licensing procedures and conditions to be an agent with TPA rights;

Contracts available for the services offered and contracting processes;Contracts available for the services offered and contracting processes;

Tolerance levels included in transportation and other services contracted, i.e. the

balancing regime in place;

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balancing regime in place;

MEDREG GAS AG: Contents of the GGP on Transparency

Transparency requirements.

Network code and/or the main standard conditions outlining the rights and

f fresponsibilities for all users of the gas system. This should include:

• programming and nomination procedures,

d ll i d• measurement and allocation procedures,

• maintenance of the infrastructures

• operation of the system under both normal and exceptional circumstances;• operation of the system under both, normal and exceptional circumstances;Capacity allocation, congestion management, anti-hoarding and reutilisation

provisions;provisions;

Rules applicable for capacity trade on the secondary market;

G lit d i t

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Gas quality and pressure requirements;

MEDREG GAS AG: Transparency Study Results

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MEDREG GAS AG: Next Steps after Transparency Study

According to the study results further efforts are still necessary in certain countries regarding availability of information.

Task Force has agreed Next Steps:

GAS AG NRAs commit to promote study findings among their countries' relevant stakeholders (TSOs, Ministries´, incumbents, associations) to raise the awareness on this topic.

The GGPs and the study are intended to be employed as a framework for reflexion among authorities and infrastructures operators. g p

Medreg will publish and update the study on the web site. It will also act as a consultive body supporting countries if requested on how to adapt

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as a consultive body supporting countries - if requested - on how to adapt transparency provisions to their systems

MEDREG GAS AG: Infrastructures Task Force

• The Task Force carried out a study on the existing infrastructures• The Task Force carried out a study on the existing infrastructures and on the possible needs for reinforcement in the future .

• The study analyzes the market demand, traded volumes and interconnection levels in each country of the region.

• It will assess also the opportunities and ways to develop new infrastructures and reach agreements in order to improve both, the security of supply in the region and the level of interconnection between countries

A preliminary draft has been already elaborated, with the incomes received from the different members. The final

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version of the study will be available the first half of 2012.

Norway

RussiaNederlands

France SloveniaCroatia

ItalyFrance

SpainPortugal

Croatia

TurkeyBosnia

Greece Azerbaijan

Iran

T&T

Spa

Syria

Israel

Q tMorocco Tunusia

ALGERIA EGYPTLIBYAJordan

Qatar

YemenLNG Trade Link YemenOman

Net ImporterGas Source outside Mediterranean

Pipeline

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NigeriaNet Importer

Net Exporter

MEDREG GAS AG: Third Party Access Task Force

The Task Force is carrying on an study on Third Party AccessThe Task Force is carrying on an study on Third Party Access regulation status in the region.

The study assesses the current TPA provisions and the future needs to develop a Mediterranean market.

Questionnaires had been circulated to the Members and all the information received has been analyzed. The study is also supported on information from a previous Benchmarking report done in 2009.

The final version of the study will be approved this week.

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pp

MEDREG GAS AG: Issues analyzed on the TPA study

1. Market opening: • Number of suppliers in the marketNumber of suppliers in the market • Eligible consumers

2 U b dli2. Unbundling: • Status on Transmission, Underground Storage and LNG facilities• Regulator competencies on unbundlingg p g

3. Third Party Access:E i ti TPA l ti• Existing TPA regulation

• Competent entities for TPA regulation approval

4. Methodologies for Capacity Allocation and Congestion Management

• Analysis and description of the several methodologies applied

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Analysis and description of the several methodologies applied

MEDREG GAS AG: Issues analyzed on the TPA study

5. Transmission access tariffsC it i t d i th t iff• Criteria to design the tariffs

• Methodologies applied• Competent entitiesp

6. Anti-hording mechanismsExistence of Anti hording mechanisms Provisions• Existence of Anti-hording mechanisms. Provisions

7. Existence of mechanisms to promote market opening

8. Quality of service parameters

9. Dispute settlement• Competent entities

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MEDREG GAS AG: Main Conclusions of the TPA study

General conclusionsGe e a co c us o sRegulated TPA to the infrastructures is linked to the degree ofdevelopment of the gas marketThe more developed a gas market is in terms of penetration of gasThe more developed a gas market is, in terms of penetration of gasconsumption, openness and liberalization, the more likely is thatTPA is regulated, rules for access are transparent and the regulatorhas more competencies: approval of access rules access tariffshas more competencies: approval of access rules, access tariffs…

Conclusion per subjectStatus of market opening, quality of service and dispute settlementare generally satisfactoryUnbundling, TPA rules, capacity allocation and congestiong p y gmanagement methodologies, access tariffs, and anti-hordingmechanisms need some improvement in several countries

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Summary of MEDREG GAS AG Action Plan 2011-20132011 2013

Task / deliverable Scheduledforfor

Assessment of the current status of gas markets, of sector regulation in the MEDREG countries, and its expected evolution (“benchmarking report”) 2011-2013

Investigate the transparency status in the region through a monitoring of the guidelines on Transparency (GGP).

2011(1st half)

Study on infrastructure needs including the way to improve security of supply 2012y g y p y pp yin the region and the level of interconnection within and between countries. (1st half)

Set up a specific task force in order to carry out a study on TPA status in the region and future needs in order to develop a Mediterranean market. 2011 eg o a d u u e eeds o de o de e op a ed e a ea a e

Carry out a document of Guidelines of Good Practice (GGP) on TPA for gas in MEDREG countries, and a possible monitoring of compliance with these GGP in the Mediterranean region.

2012-2013in the Mediterranean region.

Status review study on gas capacity allocation in the Mediterranean countries. As a further step, develop Guidelines of Good Practice (GGP) on Capacity allocation for MEDREG countries.

2012-2013

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p y

Thanks for your attention !

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