DTe: Wholesale Market for Gas Functions Inadequately

There is too little effective competition on the wholesale market for gas, according to the energy regulator, the Office of Energy Regulation (DTe). DTe bases this conclusion on two research reports published today. The first investigation, carried out by DTe itself, focuses on the operation of the entire wholesale market. The second investigation, carried out by the British consultancy firm, Frontier Economics, on behalf of DTe and the Netherlands Competition Authority (NMa), focuses, in particular, on the flexibility services offered on this wholesale market. These services make it possible for gas suppliers to absorb peaks and troughs in their customers' gas offtake.

In DTe's opinion, the most important cause of insufficient effective competition is the strong position of Gasunie Trade & Supply (Gasunie) on the entire wholesale market and, in particular, its dominant position on the market for the supply of flexibility services. The investigation showed that most suppliers cannot operate independently of Gasunie. At the point at which Gasunie transfers most gas to suppliers - the so-called gas entry points - there is hardly any trade at all. Trade does occur at a different marketplace on the wholesale market, namely the so-called TTF (Title Transfer Facility). Since Gasunie only supplies a limited quantity of gas at this point, the importance of TTF on the wholesale market as a whole is limited.

DTe has started consultations on the conclusions of both investigations. Market parties may respond to the analyses in the research reports and may indicate how market forces on the wholesale market for gas can be stimulated. Furthermore, DTe is investigating whether Gas Transport Services (GTS), the operator of the national gas transmission network, can offer more flexibility services. In doing so, DTe will also give consideration to the corresponding tariffs and conditions.

Promoting the operation of market forces on the gas market is one of DTe's main priorities in the coming years. DTe considers doing so important because only then will consumers benefit from the liberalisation of the gas market.