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DTe Wishes to Improve Operation of the Gas Market

The Office for Energy Regulation (DTe) wishes to obtain better insight into the measures necessary to improve the operation of the gas market. With a view to this, the supervisor today published a consultation document.

In the document, DTe focuses on three bottlenecks. DTe notes that little import capacity is available for new parties on the market. One of the causes of this is the fact that it is not clear to parties how much contracted transmission capacity is actually used. DTe therefore proposes making improvements through the provision of information on import capacity by publishing more extensive information on capacity utilisation in the past and capacity available in future. On the basis of this information, network users will be in a better position to estimate the extent to which the gas transmission they require can actually take place. In addition, this will provide better insight into the desirability of providing extra import capacity.

Another bottleneck relates to the competitive disadvantage that parties experience who do not have direct access to a source of low-calorific gas. These market parties import (high-calorific) gas from other countries, which they then convert by means of quality conversion into low-calorific gas for delivery, for instance, to households. To ensure that all parties on the market for domestic gas have the same starting point, DTe proposes in the consultation document that it should be possible to settle part of the cost of quality conversion through the transmission tariffs. As a result, all parties will make a proportional contribution to these costs.

There also seems to be a lack of flexibility. As a result, there are limited opportunities for entering the wholesale market for gas in the Netherlands. Consequently, in supplying gas the present suppliers of gas and new entrants to this market are not able to take sufficient advantage of the variations in the offtake profiles of customers throughout the day (flexibility). DTe advocates the most liberal possible balancing regime (the rules which market players are required to adhere to in feeding gas into the gas network and taking gas from the network).

Within the framework of the national implementation of the second European gas directive, the present system of access to the gas network has been amended. The proposed amendment has been presented to the Lower House of the Dutch Parliament. Once the proposal has been adopted by the Lower House, DTe will analyse the consequences of this proposal. DTe will ensure the timely involvement of the various market parties in this process.

The information and consultation document, entitled "Onderzoek Ontwikkeling Gasmarkt" [Research into the Development of the Gas Market] can be obtained as of today from DTe's website under the heading "News". Market parties have until 23 February 2004 to respond to this information and consultation document.