Page 23 - European Energy Innovation - Autumn 2016 publication
P. 23

Autumn 2016 European Energy Innovation      23


Earlier this year on April 19th,              Romania can facilitate the access for       the main driver of this development
            the first LNG tanker left the US  consumers and industry to the Global        without any regulation being passed
            terminal Sabine Pass bound to     Gas market and its competitive prices.      at EU level, simply because the market
            Portugal, making Europe the       Further connections to Hungary and          setup allowed higher priced surplus
 third continent supplied with US LNG         Austria can expand this beneficial          electricity to match lower priced deficit
 after Asia and South-America. This is        influence of more liquidity to all central  areas. The success of the EU wide
 happening exactly at the same time           European markets.                           electricity-trading platform shows
 when Gorgon LNG, the world’s most                                                        how instrumental digital platforms
 expensive terminal starts producing          The newly discovered gas reserves in        are for creating new products and
 Australian LNG, at a time of steeply         the Black Sea will transform Romania        lowering prices. It is exactly this kind of
 dropping demand for gas worldwide.           from a very stable self-sustainable gas     innovation that our industry needs in
                                              market, with virtually no imports, in a     order to regain competitiveness.
 New Australian and US LNG will               regional exporter. If we can increase
 dramatically change global gas               interconnection capacity and link           Gas markets however, have not yet
 flows by displacing US and Middle            these new indigenous capacities to          reached the same level of liquidity
 Eastern LNG exports to Asia, and by          neighbouring markets, then there will       and hub trade. Therefore gas market
 redirecting these volumes towards            be enough liquidity on the regional         integration remains a challenge for
 Europe. This will work as a strong price     gas market to create the first Eastern      regulators and industry if we want gas
 balancing mechanism which will lower         European Gas HUB.                           to be traded freely across Europe,
 wholesale prices for Russian Gas in                                                      thus enabling price and network
 Western Europe by heavily increasing         A new gas HUB will be able to replicate     congestion cost reduction. For this,
 competitiveness and market liquidity.        the competitive prices which we find        we need to embed innovation in
                                              on the National Balancing Point in the      our interconnectors as well as in
 Meanwhile, in Eastern Europe                 UK and on TTF in the Netherlands,           our transmission networks. Smart
 wholesale markets are still dominated        thus securing low prices for consumers      grids at distribution level have to be
 by external suppliers and long term          and a stable and predictable market         complemented by smart LNG terminals,
 contracts with fixed delivery and price      for investors. That is why aggregating      storage facilities, compressors and
 clauses. Underdeveloped markets and          liquidity in a Central Eastern European     pipelines, which would allow gas to
 low competition among suppliers are          Hub, wherever you find indigenous           immediately balance intermittent
 keeping wholesale prices for imported        production, is a key pillar of the Energy   renewable power generation, and
 gas up, and allow gas to sometimes           Union because it will allow businesses      reduce price peaks generated by
 be used as a political tool. There is        and consumers to have access to gas         congestion, or extreme weather
 currently no disruptor to the current        on gas competition. With competition,       conditions. For all this to happen we
 situation where most Eastern Member          politics will give way to economics and     need more investment.
 States are heavily dependent on              cooperation.
 Russian supplies, and where no real                                                      I am sure that the Energy Union and the
 liquid trading hubs are operational.         Energy markets today are becoming           European Fund for Strategic Investments
                                              more dynamic and interconnected than        provide the Union with a unique window
 Actually, there is no disrupter yet...for    ever. Enabling industrial consumers         of opportunity to re-launch long term
 I strongly believe that Eastern Europe       and households to benefit from this         investment in our infrastructures and
 and its energy industry will be that         market integration will bring important     thus make our economy’s return to
 innovative disrupter which will initiate     financial advantages for our citizens       economic growth. But in order to
 competition and will increase security       and businesses.                             succeed, we need to use the EFSI as
 of supply for the whole European Union.                                                  a vehicle for turning infrastructure
                                              As we have seen with the EU electricity     investment into a fully liquid asset class
 By connecting our networks with the          market coupling, electricity trading        with bonds that can be pooled and
 Sothern Gas Corridor and the LNG             across our internal borders has enabled     traded on European and global markets.
 terminals in Greece as well as the new       a strong congestion cost optimization
 gas fields in Eastern Mediterranean,         and has triggered a price reduction and     In gas as in trade, success will come if
 eastern Member States such as                approximation. The industry has been        we put the market first! l
   18   19   20   21   22   23   24   25   26   27   28