1. European Federation of Energy Traders 1 Brussels, 22 September 2009 Implementing the 3 rd EU Energy package Colin Lyle, EFET Gas Committee Chairman www.EFET.org 22 September 2009 Brussels

2. Brussels 22 September 2009 2 Colin Lyle, EFET Gas Committee

3. Brussels 22 September 2009 3 Colin Lyle, EFET Gas Committee

4. Brussels 22 September 2009 4 Colin Lyle, EFET Gas Committee IMPLEMENTING THE 3 rd EU ENERGY PACKAGE Illustration of the Developing EU Gas Market Industrial & Commercial Residential LP Distribution HP Transmission Competing Producers Competing Suppliers Customer Choice of Suppliers Demand management LNG Storage Regulated, Independent Network Operators Gas Interconnectors Trading Hubs set Market Prices Hub LNG I O O I I/O

5. Brussels 22 September 2009 5 Colin Lyle, EFET Gas Committee Its an open market, But I was here first. IMPLEMENTING THE 3 rd EU ENERGY PACKAGE Removing the barriers to help the market to work

6. Brussels 22 September 2009 6 Colin Lyle, EFET Gas Committee NB. Not all trading locations are shown Virtual hub (in-grid balancing point) TTF Huberator @ Zeebrugge Physical hub ( e.g border point) PEG N CEGH @ Baumgarten Trading hub with limited price transparency EGT IMPLEMENTING THE 3 rd EU ENERGY PACKAGE Traded markets are needed for clear price signals GD NBP

7. Brussels 22 September 2009 7 Colin Lyle, EFET Gas Committee  Large trading hubs are needed for sufficient liquidity.  Gas takes far longer to travel than electricity  High economic cost of full interconnection across whole of EU.  EU gas market will be a series of ‘pools’ rather than a ‘copper plate’  LNG and pipeline gas need access to balancing pools E.g. IEA view of possible gas market development IMPLEMENTING THE 3 rd EU ENERGY PACKAGE Regional markets may provide long-term solutions

8. Brussels 22 September 2009 8 Colin Lyle, EFET Gas Committee  Share understanding of the EU gas market design  Clear plans to establish market-based balancing  Improved provision of fundamental data  Multi-system operation (Regional cooperation)  Maximising capacity for market participants  Consistent regulatory approach to x-border investment  Encouraging competitive markets (gas hubs, storage etc...) IMPLEMENTING THE 3 rd EU ENERGY PACKAGE Some issues to tackle now

9. Brussels 22 September 2009 9 Colin Lyle, EFET Gas Committee European Federation of Energy Traders Tel: +31 (0)20 5207970 Email: secretariat@efet.orgsecretariat@efet.org www.efet.org IMPLEMENTING THE 3 rd EU ENERGY PACKAGE IFIEC Forum - 22 September 2009 Brussels