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Market players have no interest in making long term commitments that pay for gas network expansion according to the latest report on the monitoring of incremental capacity published by the EU Agency for the Cooperation of Energy Regulators (ACER).
The report investigated the incremental capacity cycle between July 2019 and July 2021 and compared the results with those of previous years.
What are the main findings?
The analysis showed that, despite TSOs found significant non-binding interest from the market on gas networks expansion (in about one third of the assessed market borders), the market was not willing to convert such interest into any binding contracts that would pay for the capacity increase. As a consequence, no new capacity was developed by the incremental auctions in the latest cycle (2019-2021).
Furthermore, the report finds not a single unit of gas transmission capacity has been developed on the basis of the incremental process in four years and two biennial cycles.
ACER reminds the importance of having a network expansion based on robust demand indications to ensure the overall efficiency of the incremental process. This is particularly key in the current gas market, and in view of achieving the European Union’s climate and energy policy objectives.
