Chapter 4: EU gas market structure
Market structure is understood as the sum of institutional and organizational arrangements of gas supply in the EU, resulting from the impact of gas market actors’ behaviours upon gas market opening. For the purpose of analysing the conditional relationship between these two elements, the chapter discusses the levels of gas market concentration and gas market interconnection. Both aspects are essential when assessing the current stage of gas market liberalization. At the same time they provide the opportunity to observe how the instruments at hand can be better adapted to provide an integrated market structure. The level of market concentration provides accurate signals about the barriers that still exist in the market, the number of actors who enjoy enough market power and the parts of the market that suffer the biggest foreclosure. In return, the level of market interconnection shows to what extent the EU gas market is still segmented into national constituencies. There is a direct link between the persistence of market foreclosure strategies and poor market interconnection. Thus, traditional market actors, who preserve an incumbent position on their respective national markets, only rarely decide to enter other markets as competitors. This favours the maintenance of a fragmentation of the EU gas market along national lines. One of the main findings of the 2007 Energy Sector Inquiry regards concentration in the European gas markets.
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