1. The consultant used the MMR ranking of gas hubs to categorise results
Current state of gas hub development
A ranking of EU hubs based on 2015 monitoring results
Established hubs
Advanced hubs
Emerging hubs
Illiquid hubs
Broad liquidity
Sizeable forward markets which contribute to supply hedging
Price reference for other EU hubs and for long-term contracts indexation
High liquidity
More reliant on spot products and balancing operations
Progress on supply hedging role but relatively lower longer-term products liquidity levels results in weaker price risk management role
Improving liquidity from a lower base taking advantage of enhanced interconnectivity
Liquidity partially driven by market obligations imposed on incumbents
Still significant reliance on long-term contracts
Reliance chiefly on long-term contracts
Early stage organised market places or lack of a hub
Absence of an entry-exit system in some markets
Potential caveat could arise if MMR monitoring results reveal a different hub categorisation
Source: ACER

2. At an aggregated level, only illiquid hubs deviate
markedly from the other hub categories
Established, advanced and emerging hubs tend to share the same most important barriers
Illiquid hubs also have the same barriers as the 3 hub groups above, however those are overshadowed by more fundamental problems directly relevant to the actual existence of a market at wholesale level
Source: Kantor report on barriers to trade

3. The most significant barriers by hub category
Barriers scoring higher than 20% are colour marked
Note: the % refers to the distribution of answers ranging from ‘not an issue’ to ‘severe’
Source: Kantor survey on barriers to trade

4. Barriers of less or minor importance by hub category
Barriers scoring higher than 20% are colour marked
Note: the % refers to the distribution of answers ranging from ‘not an issue’ to ‘severe’
Source: Kantor survey on barriers to trade

5. Summary of barriers in Emerging hubs (1/2)
Most important barriers
Source: Kantor survey on barriers to trade

6. Summary of barriers in Emerging hubs (2/2)
Least important barriers
Source: Kantor survey on barriers to trade

7. Summary of barriers in Illiquid hubs (1/2)
Most important barriers
Source: Kantor survey on barriers to trade

8. Summary of barriers in Illiquid hubs (2/2)
Least important barriers
Source: Kantor survey on barriers to trade

9. Back-up: Example of barriers: developing hubs
Not exhaustive – perceived errors or already outdated information is in red
Back-up: Example of barriers: developing hubs
Developing hubs: CZ
Developing hubs: PL CZ
Potential hoarding at CZ-PL IP
High multipliers
Heavy storage obligations on suppliers, high prices charged and no access from other participants
Imbalance cash out price not transparent PL
Nominal unbundling: PGNiG and TSO are both 100% owned by the Ministry, compliance issues on information exchange within state owned companies (TSO, SSO, DSO, PGNiG)
Severe storage obligations on suppliers and wholesale traders; storage is very expensive compared to other MSs
Potential hoarding at CZ-PL IP
Yamal (still point to point) and domestic system not integrated into a single balancing point, poor database, balancing properly is impossible
2 different licenses required to import and sell at VTP, each may take over 1 year to be granted. Dozens of documents required (although information is often already held by the regulator) and communication is bureaucratic and in Polish only
Separate booking platform for capacity
TSO data: low frequency, low quality TSO
High multipliers
Source: Kantor survey on barriers to trade
Source: Kantor study

10. Back-up: Example of barriers: illiquid hubs
Not exhaustive – perceived errors or already outdated information is in red
Back-up: Example of barriers: illiquid hubs
Illiquid hubs: BG, EE, EL, HR, LT, LV, PT
Illiquid hubs: HU, RO, SI, SK BG
No VTP
No entry-exit capacity, no-entry exit tariffs
No licensing regime for traders
Only one predominant supplier
BG-EL only interruptible capacity offered, with high probability of interruption on the BG side
No daily capacity products
Consultation with little notice period, NRA discusses changes with incumbent only
No consultation to change TSOs’ contracts and lack of info on tariff methodology by NRA
No interconnection agreement BG-EL
Still m3, neighbours and rest of EU all in MWh
EE/LT/LV
Flows from Estonia to Latvia/Lithuania not possible
No VTP in EE and LV, no exchange in LT
In LT LNG terminal only used by incumbent, regasification is subsidised via TSO’s exit domestic tariffs, transmission tariff up to 70% of end users gas price, state gas companies do not disclose import prices, heavy regulated user prices, protection of state owned companies
LV exemption until April, still nothing published (will it be ready in less than 1 month?) EL
Lack of info on tariffs methodology by NRAs
New 2017 tariff methodology discriminate LNG entry against entry from BG and Turkey (more expensive x3.5 and x4.5 respectively) HR
No VTP, no exchange
National production sold at low regulated prices to households
Different capacity booking platforms used at HU border
Ambiguity on VAT requirement to get license
HR-HU exit tariff prohibitively high PT
Lack of transparency in tariffs settings
Political instability affects trading HU
High political influence
Severe SoS storage obligations and high storage fees (x3 EU supply price)
No price transparency, no publication of flows by TSO
Lack of regulatory transparency in frequency and minimum notice periods for changes related to consultations between market participants and the NRA Trading license can take up to 18 months and cost 50k/year
Tax system on energy companies unstable and unpredictable
High multipliers
2 VTPs dissolve liquidity
RBP booking platform used at IPs with AT and HR, PRISMA used on the other side
Cumbersome reporting obligations
High exchange fees and additional cashflow burdens from VAT procedures RO
No VTP, still point to point booking at some sites
Lack of bilateral interconnection with neighbours
Production obligations: most all RO gas is supplied by domestic gas production at regulated prices (all customers could be regulated as there is no definition)
Effort to hamper exports (e.g. capacity with BG exists but is hampered by lack of compression in RO)
BG-RO capacity available but not offered
Not transparent tariffs SI
No VTP, no exchange, high multipliers SK
No independent market operator for the balancing market and non transparent definition of the price of balancing gas
Virtual reverse flow is hindered
Regulated end customers prices
Tariffs methodology details not published
Lack of regulatory transparency, e.g.: in 2016 TSO’s amendments of operational documents (internal rules and price decisions) were not consulted and approved by NRA within a day
Source: Kantor survey on barriers to trade
At all hubs: English not used by NRA and TSOs