Page 23 - European Energy Innovation - Autumn 2016 publication
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Autumn 2016 European Energy Innovation 23
GAS
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
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