Natural gas market development EU Estonia Utility Seminar, Tallinn

Transcription

1 Natural gas market development EU Estonia Utility Seminar, Tallinn E.ON Ruhrgas International, Eesti Filiaal Mario Nullmeier

2 Contents 1. EU Requirements regarding 3rd. Energy Package 2. Development in Germany Open Grid Europe 3. Development in Estonia Eesti Gaas 4. Regulatory issues 5. Summary 2

3 1.1 Important dates according to the 3rd EU energy package 3 rd Energy Package enters into force EU Commission report ITOaudit Transformation into national law 1 Implementation OU/ITO If applicable proposals for OU on the basis of ITOaudit 3. September 2009 March March March 2013 March 2014 Three equal value Unbundling options under 3rd EU directive 1 Another implementation period for the ITO model is not planned in the 3rd EU energy package after national laws coming into effect, but eventually such a implementation period of about one year for companies can be intended in national law 3

4 1.2 Comparison of the OU and ITO model OU ITO Separate legal entities yes yes Asset owner yes yes Independence of TSO management Non-discriminatory network access VIU as TSO shareholder Investment/financing obligation of the TSO-owner yes yes no (but as a minority shareholder without any rights) Yes, in accordance with 10y plan yes yes yes (e.g. right to appoint and dismiss the management, approval of financial plan and dividends) Yes, in accordance with 10y plan, but tender procedure possible Rendering of services no restrictions under 3rd package from TSO towards VIU only Flexibility of the model irreversible leaves the option for OU/ISO open 4

5 1.3 Implementation of the 3rd energy package: current status of discussion in selected EU member states (I/II) EU Member State Austria Baltic/Finland BE/NL OU/ITO/IS O all Derogation Except LT OU status of implementation Derogation used by Finland, Estonia and Latvia, no derogation notified by Lithuania to the EC - law on OU passed in 2011 Czech Republic ITO Slovenia OU/ITO Sweden OU Source: Energy Law Group, September

6 1.4 Implementation of the 3rd energy package: current status of discussion in selected EU member states (II/II) EU Member State France OU/ITO/ISO ITO status of implementation Germany All Hungary Poland UK All OU OU TSO (Gas Systems) already separated from PGNIG and ownership of both companies is allocated to different ministries. Source: Energy Law Group, September 2011 Any solution regarding future structure of a given gas market needs clear, sustainable and transparent regulatory environment 6

7 2.1 Germany - Regulation on gas market and history of Open Grid Europe (OGE) Regulation First EU internal market directive Initiation of gas market liberalisation Third-party access to networks Revision of German Energy Industry Act Second EU internal market package Revision of German Energy Industry Act Regulation of network fees Unbundling rules for network operation and trading Third EU internal market package Further unbundling rules for gas networks at level of transmission network operators Transposition of 3rd internal market package into German law History of OGE (former EGT) Unbundling of accounts within ERG Founding of EGT (no asset transfer) Big EGT (integration of assets) OGE (organisational ITO preparation) OGE (ITO certification) Aim: Implementation of unbundling rules from ministerial approval of EON/ERG merger Aim: Active promotion of competition through greater transparency and clearer assignment of network operator functions Aim: Preparation for 3rd internal market package Aim: Implementation of unbundling rules from 3rd internal market package 7

8 2.2 Structure of OGE as ITO - (most cost efficient solution for E.ON Ruhrgas and customers) Transfer (part of the ITO project) the technical service division to former EGT (demerger according to German law) the purchase department for technical goods additional functions with regard to accounting, HR and communication around 1,400 employees to former EGT final structure VIU 100% TSO 8

9 3.1 Estonian Gas market regulation and timeline for Eesti Gaas Regulation First EU internal market directive Initiation of gas market liberalisation Third-party access to networks 1998 Second EU internal market package Third EU internal market package Further unbundling rules for gas networks at level of transmission network operators Founding AS EG Vorg. + AS EG Ehitus (no asset transfer) Aim: Provide independent Network Services to all the participants of the natural gas market on the territory of Estonia Transposition of 3rd internal market package into Estonian Law/ deadline for implementation of ITO/OU 2012 Organisational preparation (integration of assets) Aim: preparation for implementation of 3rd internal market package, clear assignment of network operator functions 2015 OU Aim: Full implementation of unbundling rules from 3rd internal market package 9

10 3.2 Shareholder s perspective - arguments for an ITO model Assumptions: Development of regional transportation business uncertain and to be clarified on midterm basis Estonian government declared not to be interested in buying the gas transmission assets, therefore market player to be attracted Estonian government aiming for OU by 2015 Market size: development of a joint gas transmission market in the Baltic region to be clarified OU is of interest only if shareholders which are classified as VIU are interested to exit from the transportation business - OU is irreversible Evaluation of an appropriate sales price Avoiding a forced sales process Providing a regulatory and commercial framework which is attractive for potential investors in the TSO business 10

11 3.3 Shareholder s perspective - arguments for an ITO model ITO model preserves all future choices Pursuing an integrated company structure Scale effects e.g. for debt financing conditions Developing a Baltic transportation business ISO model not attractive for shareholders as in the OU-model the state might be shareholder in the asset company and in the ISO-company limitation of the financing obligation of asset company difficult to assess and to implement 11

12 3.4 Implementation of 3rd Directive A Reasonable Approach A two (1) step approach (in line with 3rd. EU Directive): - From current status quo to a national Independent Transmission Operator (nito) - From a national ITO to a regional solution or others Efficient liberalization of Estonian gas market taking into consideration limited market size Economical sound conditions for all stakeholders Limit financial burdens for natural gas customers Reasonable practical experience for further decisions Avoidance of unnecessary disputes between and potential claims from shareholders and other stakeholders of that sector Open discussion for further Baltic gas market harmonization/integration e.g. regional TSO Consideration of significant knowledge of E.ON Ruhrgas concerning implementation of 3rd EU Directive in Germany (German gas ITO Open Grid Europe established 2010) 12

13 3.5 Implementation of 3rd Directive A Reasonable Approach (2) Status quo Estonian gas network fulfills technical and environmental standards of Estonian laws and rules Estonian gas network is part of an integrated system consisting of five geographical areas: Estonia, North-West Russia/Russia, Latvia, Lithuania and Belarus Estonian gas network is legally separated since 2006 (EG Vörguteenus) according to 2nd. EU Directive, the only separated TSO in the Baltic countries Key facts and goals Estonia is granted with derogation from 3rd EU Directive Estonian gas transmission network provides non-discriminatory access under transparent rules Estonian gas transmission system must be separated according to third Directive of EU COM Estonian gas transmission system will be developed in accordance to the 10 Year Development Program of the European Network of Transmission System Operators for 13

14 4. Regulatory Frame for Transmission System Owners/Operators General approach To run a sustainable network business based on transparent and economically justified cost structure To limit/eliminate the volume risk which is clearly part of traders/sales business (by EU task the transmission operator has to run a technological system without volume responsibility - potential higher risk for system stability) Issues to be improved for Estonian Transmission owner Regulated Asset Base (RAB) defined on repurchase price level minus accepted depreciation (maintaining asset value and development of network)? Price cap to be changed to revenue cap (limiting/eliminating volume risk for Transmission owner) according to draft Nat Gas Act as of OK Full acceptance of working capital (incentive regulation based on few-year period and mid-term efficiency factor, gas losses, financing interest, others)? 14

15 5. Summary: Derogation in Estonia in line with Article 49 of 3 rd EU directive Derogation clause applies because of isolated and/or emerging market situation in Estonia European Commission has approved requests from Estonia, Latvia and Finland Even by applying the ITO model significant changes in the company s structure and in the corporate governance would be necessary due to these organisational changes an increasing cost structure and thus an increase of transportation tariffs can be expected Motivation of EU for stricter unbundling rules does not apply for Estonia, since lack of market opening is not due to any discriminatory behaviour of Eesti Gaas but is caused by geographical reasons Derogation or ITO model preserves all future choices, whereas Ownership Unbundling (OU) is irreversible 15

16 Thank You For Your Attention