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NMa ratifies new balancing regime for the gas industry

The new balancing regime and the new market model for the gas industry take effect April 1, 2011. The Netherlands Competition Authority (NMa) has approved the changes that the joint network operators have made to the conditions they use for the new balancing regime and the new market model in the gas industry. The 'Strengthening the gas market' Act lays the foundation for the new conditions of the joint network operators. Jaap de Keijzer, member of the Board of the NMa, reacts: 'Under the new conditions, all market participants share responsibility for making sure the network remains balanced, and thus for secure and efficient gas transport. The conditions aim at improving gas tradability.'

A market-based balancing regime
For transporting natural gas securely and efficiently, the transport network must be balanced. 'Balanced' means that network pressure remains constant, and that, on balance, the amount of gas that is withdrawn from the network does not exceed the amount that is injected. Under the new balancing regime, each market participant is responsible for its own amount of natural gas that it withdraws or injects. As a result, market participants are jointly responsible for maintaining balance on the network. However, should, for any reason, an imbalance occur, Dutch transmission system operator GTS must either buy additional gas or sell gas. Mr. De Keijzer continues: 'The party that causes the imbalance must foot the bill for the gas that is needed to offset the imbalance, while the party that helps offset the imbalance will be rewarded. This will lead to a more efficient balancing system.'

A new market model
Until today, buyers were unable to buy their natural gas on a trading platform. As of April 1, 2011, it will be easier for them to choose where they buy their gas. With access to the trading platform improved, they are able to resell the gas that they do not need themselves.

'We believe that this will lead to increased gas trade. Market participants are given more options to keep their program balanced, and to avoid potential imbalances. That way, they have the opportunity to help keeping the gas network balanced,' the NMa adds.

In 2007 already did the NMa argue that market participants could actively help keeping the gas network balanced. That would help keep the costs of imbalance under control.