Building Competitive Gas Markets in the EU

Building Competitive Gas Markets in the EU

Regulation, Supply and Demand

The Loyola de Palacio Series on European Energy Policy

Jean-Michel Glachant, Michelle Hallack and Miguel Vazquez

This highly unique book focuses on market design issues common to most EU gas markets, particularly in the context of closer integration. It explores in detail the characteristics and requirements of national gas markets in Europe which are constructed as virtual hubs based on entry/exit schemes as a requirement of European law.

Chapter 6: Introduction to Part III

Michelle Hallack, Miguel Vazquez and Jean-Michel Glachant

Subjects: economics and finance, competition policy, energy economics

Extract

In order to bring coherence to the various forthcoming Framework Guidelines and Network Codes, European regulators have launched a consultation process to define a gas market target model. It is a non-binding architecture aiming to provide a unified vision of the future layout of the EU gas market in 2015–20. A gas target model should define the key characteristics of gas transactions and their institutional framework. However, in reality, it strongly interacts with how transmission capacity should be allocated in the medium and short terms, and how it should be built into the long term. There are, at the beginning of 2012, five target model reports published and currently discussed (Boltz, 2011). However, our book will only present details two of them, those having been conceived from within our ranks. The ‘MECO-S’ was the first gas target model published by the Florence School of Regulation, in June 2011. The model aims to be a ‘Market Enabling, Connecting and Securing (MECO-S) Model’ (see ‘A vision for the EU gas target model: the MECO-S model’, Glachant, 2011 and Chapter 7 this volume). It was the first complete set of rules and market architecture propositions to build an EU gas target model. It has been very influential in the European energy regulation community.

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