News / Gas Market News

Gas Market News

The calendar year is coming to an end and it is almost a year since the Finnish gas market was opened. There have been plenty of development projects throughout the year and the development continues.

The current gas market news are summarized in this post:

Gasgrid Finland will publish the price list of transmission tariffs and service prices in 2021 on 30th of November

Gasgrid Finland will publish the price list of transmission tariffs and service prices which will be applicable on the tariff year 2021 (1.1.-31.12.2021). The price list will be published on Monday 30th of November 2020. Under the Finnish Natural Gas Market Act, Gasgrid Finland as the Transmission System Operator with System Responsibility sets the transmission charges for Finland’s internal entry and exit points. As regards international connections, the transmission charges for 2020 and 2021 are set by the Energy Authority. The price list of Gasgrid Finland contains transmission tariffs, the daily imbalance charging method, the capacity overrun charge and the centralised data exchange charges. In addition, the price list contains calculation examples to facilitate the use of the price list.

In Finland, the postage stamp reference price methodology is applied. In the postage stamp methodology, the distance between entry and exit points or the technical transmission capacity do not affect the unit price of entry or exit capacity, but the tariff for entry or exit capacity is the same for all entry or exit points.

The price list of Gasgrid Finland will be announced separately on Monday 30th of November.

Gasgrid Finland Oy connection service terms and conditions confirmed, and the Finnish transmission system development obligation application principles defined

In September 2020, the Finnish Authority confirmed the connection service terms and conditions to the transmission system operator (TSO) Gasgrid Finland Oy. The terms and conditions confirmed are available on Gasgrid’s website at https://gasgrid.fi/en/gas-market/legislation-and-regulation/

Gasgrid Finland has defined the development obligation application principles on the basis of which individual cases can be assessed openly and transparently taking into account overall market benefits. When applying the development obligation, the TSO shall be responsible for the costs of development. On the other hand, in cases concerning the connection obligation, the subscriber shall be responsible for all reasonable costs of building the connection.

The aim of the development obligation included in system responsibility is to ensure the conditions for a natural gas market that functions efficiently in accordance with the purpose of the provisions of section 1 of the Natural Gas Market Act. The obligation means that the functioning of the natural gas market must be examined from the perspective of the overall natural gas market and of the overall benefit. The TSO with system responsibility should, in operations regulated by the provision, make its decision in individual cases from the aspect of the overall benefit of the functioning of the market. In such a situation, the interest of a single market participant may not override the interest broadly covering the functioning of the natural gas market.

Thus, the development obligation of the TSO with system responsibility is applicable in cases where a new connection demonstrably brings additional benefit to the whole Finnish natural gas market in relation to the existing infrastructure. Equally, the development obligation can be applied in cases where a new connection helps the TSO to meet the requirements laid down by law.

In defining the application criteria of the development obligation, the TSO carried out a study assessing the operating models used elsewhere in Europe for the TSO to develop the gas system to improve market function and services to gas users. As a result of the study, the TSO identified seven areas that will be assessed going forward in the individual development needs of the Finnish transmission system. The areas of application of the development obligation provide the TSO with information about how much the TSO is justified investing in a single project so that the investment complies with the development obligation laid down on the TSO and increases the overall benefit of the Finnish natural gas market.

Areas of application of the development obligation:

  1. N-1 compliance level according to the Security of Supply Regulation

In the N-1 calculation, the largest single infrastructure component is decommissioned, and the remaining transmission capacity is compared to the estimated peak demand. The largest single component in Finland’s transmission infrastructure is the DN1000 entry pipeline from Russia to Finland.

Target value 100 %; current value 165%

  1. Residual Supply Index, RSI

The RSI depicts the market’s security of supply of the market more broadly than the N-1 compliance level according to the Security of Supply Regulation. The RSI describes commercial market by estimating the number of procurement sources on the market and their magnitude in relation to estimated total demand.

Target value 110 % (ACER); current value 87%;

  1. Critical points in the transmission network (security of supply)

The Finnish transmission system contains sections of pipeline where any disruption would cause a regional supply problem. The critical points area in the transmission system assesses the additional security of supply benefit that a new entry point would bring to the market taking into account the location and capacity of the new entry point in relation to other existing entry points and gas access points. The additional benefit brought by a new entry point is assessed by the amount of security of supply gas delivered through the entry point.

  1. Impacts on gas user costs

This area of the development obligation may be applied to an interconnector pipeline to be built in a new area should there be new gas usage sites along the interconnector pipeline concerned and the reduction in the transmission tariff brought about by the use of gas by these gas usage sites delivers overall benefit to the market.

Assessed based on new connection agreements

  1. Market competition (HHI)

The availability of competitively priced gas can be promoted by ensuring sufficient competition on the market. An essential factor here is to avoid excessive market concentration. Market concentration can be measured by the Herfindahl-Hirschmann Index (HHI).

Primarily qualitative factor

  1. Long-term market development

It is also necessary to assess the impact of a new connection also from the perspective of the long-term development of the gas market. In particular, it must be assessed whether the new connection promotes the use of gas and retains the infrastructure and thus generates benefit to existing gas infrastructure users.

Primarily qualitative factor

  1. Development of balance management services of the TSO with system responsibility

A sufficiently broad offering of balance management services enables consequential cost benefit to the market and thus the additional benefit brought by a new connection must be assessed also through the development of balance management services.

Primarily qualitative factor

Gasgrid Finland complies with openness in projects relating to development of the grid. The TSO wants to request market participants for an opinion in cases where the TSO sees an obligation to apply the development obligation. The purpose of the request for an opinion is to ascertain the added benefit brought by a new connection to market participant services. In addition to the request for an opinion, the TSO publishes cost estimates to the market of the planned investments within the framework of the development obligation after the connection agreement has been signed for the connection.

Reminder for market participants: Gasgrid Finland together with Estonian, Latvian and Lithuania Transmission System Operators organizes a Consultation on Regional Gas Market Development – Consultation ends 8th of December

The Transmission System Operators (TSOs) Amber Grid, Conexus Baltic Grid, Elering and Gasgrid Finland organize a joint consultation questionnaire on Regional Gas Market Development. The Consultation focuses on topics covering the development of a regional gas market model and harmonization. Please provide your answers to the Consultation questionnaire by Tuesday 8th of December 23:59 EET.

The Consultation questionnaire can be found here: https://www.lyyti.fi/questions/93ccd27539

Gasgrid Finland together with Baltic TSOs organized Webinars and Workshops on Regional Gas Market Integration. The recording and the materials of the Workshops can be found here: https://gasgrid.fi/en/gas-market/gas-market-integration/#webinars

The objective of regional market integration is to develop a well-functioning, supply-secure, reliable, cost-effective, compliant, transparent and non-discriminatory Finnish-Baltic gas market with effective management and services that meet market participants’ requirements. Hence, the opinions from market participants are very important for us. The received opinions will be used as a base for prioritizing future market development in the Finnish-Baltic gas market area and updating the joint market development roadmap.

The TSOs shall organize a joint workshop in the beginning of year 2021 to go through the results and the proposed development roadmap with market participants in the area.

Gasgrid Finland will publish a new version of ‘Kaasunsiirron säännöt’ (=Rules for Gas Transmission) on December 1, 2020

Gasgrid Finland will publish a new version of the Rules for Gas Transmission on December 1, 2020. The changes to the rules will take effect on 1.1.2021. Until the end of 2020, the version 1.2 of the Gas Transmission Rules applies. The changes to the new version 2.0. mainly concern the amendments made during the year to the gas market Terms and Conditions approved by the Finnish Energy Authority. Gasgrid will publish a clean version as well as a version with track changes to make it easier to identify the made changes. The publication of the rules will be announced separately. The Finnish version “Kaasunsiirron säännöt” is the official version. Gasgrid Finland will also publish an updated non-binding English version “Rules for Gas Transmission”. The Finnish shall prevail over the English one.

GET Baltic will launch a platform for Secondary Capacity Trading in Finland starting from December 1, 2020 – the platform is alternative for Capacity Transfer functionality in Gasgrid Portal

GET Baltic will launch a Secondary Capacity Trading Platform on Finnish market area starting from 1st of December 2020. There is already possibility to start registration for membership on the Secondary Capacity Trading Platform and book a place on the platform from the beginning of its operation. The option for capacity transfers during one or more gas days can still be done by using Gasgrid Portal. GET Baltic’s Secondary Capacity Trading Platform will offer alternative place for Secondary Capacity Trading.

You can find more information about the registration process and GET Baltic Secondary Capacity Trading Platform rules, principles and fees here: https://www.getbaltic.com/en/sevices/secondary-capacity-trading-platform/

Gas Interconnector Poland-Lithuania (GIPL) pipeline project is progressing – Lithuanian and Polish Transmission System Operators, Amber Grid and Gaz System, conduct a market survey on development of GIPL transmission services

The Transmission System Operators (TSOs) of Lithuania and Poland, Amber Grid and Gaz System, has decided to conduct non-binding Market Survey procedure searching for the market view on the development of the services for new transmission capacity in the Gas Interconnection Poland – Lithuania (GIPL). The deadline for responding to the Market Survey is 7th of December 2020.

The Polish and Lithuanian TSOs, believe that, in addition to increased Security of Supply, the GIPL project demonstrates a high commercial potential and might provide high economic value for market players, that will support the development of a competitive energy market in the region and contribute to the process of regional gas market integration. Taking into account the value, that the GIPL may bring to the gas market in the region, both TSOs see the need to investigate the possibilities which can enhance commercial usage of GIPL and maximise its positive economic impact.

Amber Grid and Gaz System has indicated that, according to current status of works, the commissioning of GIPL project is planned so that GIPL will be operational since calendar year 2022 applying standard rules for the access to its capacity. However, Polish and Lithuanian TSOs are looking to investigate the needs to enhance the effectiveness of the rules for market participants in periods to come. Such potential changes to the tariff or the capacity allocation model, if applied by the TSOs, could be introduced already from a calendar year 2023. The overall period concerned by the Market Survey is from the Gas Year 2022/2023 for the consecutive 15 Gas Years. The market survey will also allow to estimate the market demand for new capacity in the Polish and Lithuanian transmission systems, which will be available as a result of the construction of GIPL, i.e. 274 000 Nm3/h (2,4 bcm/y) from Poland to Lithuania and 217 000 Nm3/h (1,9 bcm/y) from Lithuania to Poland.

You will find further information on the Market Survey here: https://www.ambergrid.lt/en/news/pressrelease/launching-of-non-binding-market-survey-for-development-of-services-for-new-transmission-capacity-in-the-gas-interconnection-poland-lithuania-gipl

Gasgrid Finland Oy is a Finnish state-owned company and transmission system operator with system responsibility. We offer our customers safe, reliable and cost-efficient transmission of gases. We actively develop our transmission platform, services and the gas market in a customer-oriented manner to promote the carbon-neutral energy system of the future. Find out more: www.gasgrid.fi/

Gasgrid Finland Oy is a Finnish state-owned company and transmission system operator with system responsibility. We offer our customers safe, reliable and cost-efficient transmission of gases. We actively develop our transmission platform, services and the gas market in a customer-oriented manner to promote the carbon-neutral energy and raw material system of the future. Find out more: www.gasgrid.fi/

Share:

Share on facebook
Share on twitter
Share on linkedin
Share on email
Share on print

We are just testing the attention banner