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ACER Calls For Gas System Operators To Tackle Gas Transmission Bottlenecks

Date 24/07/2023

The European gas system was primarily designed for optimal transportation of Russian supplies from east to west. Following the Russian invasion of Ukraine, Liquified Natural Gas (LNG) and increased pipeline supplies began to enter Europe from the west, which caused bottlenecks in North-West Europe (NWE).

 

ACER publishes today its Special report on addressing congestion in North-West European gas markets. It examines:

  • How bottlenecks emerged in the most acutely congested markets of Belgium, France, Germany and the Netherlands;
  • How the respective transmission system operators (TSOs) and national regulatory authorities (NRAs) addressed the bottlenecks; and
  • The lessons learnt.

 

What are the key findings?

  • Congestion on the gas network in NWE drove hub spreads high.
  • TSOs benefitted from significantly higher congestion revenues in 2022 (compared to 2021). EU TSOs recorded €3.4 billion in gas congestion revenues in 2022 (of which €2.98 billion or nearly 90% was earned by NWE TSOs); for comparison, EU’s total gas congestion revenues in 2021 were €55 million (see the report and the accompanying infographic).
  • The EU’s integrated gas market proved to be resilient to the crisis, facilitating the reconfiguration of supply and demand, and ensuring gas would flow to where it is most needed.
  • TSOs made commendable efforts under difficult circumstances to address the acute physical bottlenecks from Belgium to the Netherlands, from Belgium to Germany and from France to Germany.
  • But, while there was coordination among neighbouring TSOs and information on the network use was mostly available, a key learning was the need for continuous coordination and information sharing.

 

No-regret measures include:

  • Addressing the most acute bottlenecks (in this instance, NWE) to improve market efficiency in the short term;
  • Optimising existing infrastructure to accommodate new supply routes. 

 

ACER recommends:

  • Joint optimisation by network operators of gas capacity;
  • Better information on gas network use;
  • Careful assessment of investment needs to avoid stranded assets;
  • Fine-tune the rules on gas transmission capacity.

 

Read more.