Problems identified by NRAs 26/10/2016 BEMIP Regional Group Meeting, Brussels

Problems and aspects - GAS Problem categories (drivers) Aspects to be assessed Price spreads Actual price spreads (if price spreads are significant, check for absence of a congestion or other barrier for cross-border trade across the IP + comparison with transport tariffs) Assessment of future time horizons? Diversification and increasing competition - Insufficient diversification, i.e. access to <3 supply sources - HHI - Residual Supply Index Absence of administrative provisions which maintain the market share of the dominant player(s) Reducing the risk of demand curtailment under severe situation - N-1 (published in the national preventive actions plans according to Regulation 994/2010; CEER proposal n-1 criterion with exports; applicable only to those MSs where the N-1 is not fulfilled) - Remaining Flexibility - Disrupted Demand (from TYNDP low infrastructure scenario) Reducing CO2 emissions emissions associated with transportation of gas

Identification of problems Views from NRAs were collected via an ACER questionnaire between 26 Sep and 20 Oct. For the BEMIP region, the following NRAs provided input: PUC (LV). Disclaimer: not all NRAs provided feedback for the exercise, therefore the list of problems presented herein is not complete. The absence of a report by an NRA may not reflect an absence of a problem in the specific region. * ACM indicated no “problems” ** Aze indicated principles

Summary: NRAs’ inputs on concrete problems Gas Price spreads Diversification and increasing competition risk of demand curtailment under severe situ. Reducing CO2 emissions NSI East AT, CZ, IT, AT, CZ, SI CZ, IT, SI SGC AT, IT AT, SI* IT, SI* NSI West FR, IT, MT BE, MT, UK-NI BE, FR, IT, MT, UK-NI BEMIP LV

Problems identified BEMIP – Price spreads; diversification and increasing competition; reducing the risk of demand curtailment under severe situation LV - Isolated gas market, not enough diversified sources, problems with security of supply, no access to EU trading platforms. The problems will be solved with the development or reinforcement of interconnections within Baltic states and with Finland and Poland. New LNG facilities for diversification. UGS should be of strategic importance for SoS and supply flexibility tool for the region. No supplies from EU market, dependence on Russian gas (90%), For the efficient gas market operations the reverse flows are substantial.

BEMIP – Price spreads, diversification and increasing competition, reducing the risk of demand curtailment under severe situation PL EE LT LV FI DE SE DK