Gas Market Development Action Plan Goal Is a Functioning Market by 2020

Elering is currently preparing a gas market development action plan, whose goal is the development of a competitive gas market with many market participants by the year 2020. A draft of the action plan has been sent out to market participants for public consultation and it was first introduced in a gas market advisory council meeting that took place in Elering on Wednesday.

“Elering bought the gas transmission network with the purpose of developing a competitive gas market with many market participants in Estonia, as a part of a regional Baltic-Finnish unified gas market. As a result of four months of work, and in cooperation with market participants, the ministry, and the Estonian Competition Authority, we have completed the first draft of the gas market development action plan. This document should lead the way in developing Estonia’s gas market over the coming years. We are open to all good ideas that can be applied in developing the market,” commented Elering’s Chairman of the Board, Taavi Veskimägi.

Over the coming months, Elering will complete analyses to ensure gas accessibility to protected consumers. The reserve volume of a protected consumer must be ascertained and a decision needs to be made on whether the reserve is provided as a physical reserve, an option, or combination of the two. The reserve has to be formed by the beginning of this year’s heating season, which starts in October.

So as to safeguard the security of supply, the Estonian-Finnish gas connection project Balticconnector is of crucial importance. Without this Estonian-Finnish gas connection, in the event of a major system emergency, limitations might need to be placed on unprotected consumers. In addition to this project, the connection between Estonia and Latvia must be boosted and upgraded so that it can be used in both directions.
To ensure more effective functioning in the gas market, emphasis will be placed on the functioning of measuring data transmission processes. This means that a smooth consumer exchange, such as a data exchange platform or data hub like that used in the electricity market, must be created to simplify the process.

In order to guarantee a liquid market and transparent pricing of gas, a regional gas exchange will be created. It will be possible to launch a regional gas exchange based on the Estonian and Lithuanian markets in a couple of years. Latvia and Finland will join the trade system once they have completely liberalized their markets.

The gas market development action plan also sets out necessary actions for gas balance handling, transparency and data publication, relating to models of network charges, encouraging gas production, and opportunities for consumption.

Elering bears the brunt of putting the completed action plan into practice, but other market participants must also be involved, namely the Ministry of Economic Affairs and Communications and the Estonian Competition Authority. The ministry will prepare changes to the Natural Gas Act, amongst other duties. Market participants will be able to submit any comments on the action plan in the month-long initiated public consultation process.

The draft of the gas market development action plan can be found here (in Estonian).