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Stakeholder view of EFET R_ISO Proposal

Stakeholder view of EFET R_ISO Proposal. Prague – 21 January 2008. Who are OGP?. International Association of Oil & Gas Producers: - Exploration and production - 65 companies and associations Members account for more than half of the world‘s oil output + about 1/3 of global gas production

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Stakeholder view of EFET R_ISO Proposal

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  1. Stakeholder view of EFET R_ISO Proposal Prague – 21 January 2008

  2. Who are OGP? • International Association of Oil & Gas Producers:- Exploration and production- 65 companies and associations • Members account for morethan half of the world‘s oiloutput + about 1/3 of globalgas production • Office in London for global affairs since 1974Office in Brussels for representation towards the EU since 1992 Courtesy of Statoil

  3. OGP Europe Supports: • The principle of establishing Regional ISOs as an interim measure leading to establishing a single EU traded gas market • The objective of a robust and transparent gas market • Measures that facilitate the gas producers being able to invest in, and freely import natural gas into and throughout Europe • The proposal to establish single independent energy regulators with harmonised powers • Market codes developed, amended and approved by all market participants using established platforms such as EASEE-gas

  4. OGP Europe Position • OGP Europe’s position is that that the lowest price to the consumer will be obtained by stimulating investment along the natural gas chain • OGP Europe agrees with EFET that: • Regional ISOs should animate the market and encourage investment • Regional ISOs should have a greater incentive to identify and resolve capacity restrictions • The ultimate aim should be a single grid code • Interim regional grid codes will recognise different levels of market maturity

  5. Economic items for consideration • The R_ISO proposal should aim to reduce costs to network users: • The basis for cost reduction assumptions needs further clarification • The economic relationship between TSO and the R_ISO needs to demonstrate an overall value add • What is the incentive for the TSOs? • The independence criteria may make the R-ISO uneconomic without adding large additional cost • The R_ISO proposal should reduce interfaces and not make doing business more bureaucratic

  6. Further items for consideration • Coordinated investment planning is supported but investment decisions should remain with shareholders • Further information is required on the statement that R_ISOs should have control of flows in supplying pipelines • The issue of capacity restrictions between R_ISOs is not covered by the proposal

  7. Conclusion • The principle of establishing Regional ISOs as an interim measure is supported • It must be demonstrated that the proposal will not add significant cost to the EU market • The proposal should reduce bureaucratic interfaces • Regional ISOs should remove regional differences, not defend them • Relationship with regulators should define a transparent process for use to challenge regulators or regional ISOs decisions

  8. Thank you for your attention!

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