French natural gas shippers alarmed by new supply security plan
French authorities could try to extend the obligations of gas shippers, giving rise to increased requirements for companies to buy storage capacity, ICIS has learned.
The move has caused alarm among some market participants amid an already intense debate over the storage system.
A document sent by the Directorate General for Energy and Climate (DGEC) to some shippers on 19 November hints that the requirement to buy a certain amount of gas-storage capacity could be extended to all shippers that are connected to the distribution network. Currently, only shippers that supply domestic or "protected" end-users, such as hospitals and other essential social services, are covered by the requirement.
Jérôme Duroyon, E.ON France's structured deals manager and chairman of the gas committee of the Independent French Association of Electricity and Gas (AFIEG), told ICIS that independent shippers including AFIEG had recently been asking DGEC to open up the debate on the storage system and address some of the system's problems, but its latest move was in direct opposition to such discussions.
"Such a document is absolutely not in line with what we have been discussing for weeks, months, between the ministry and different stakeholders," he said.
Not all market players received the plan directly from DGEC - some were only forwarded it later from other companies. But the implied deadline for responses of 3 December - the date by which the plan had to be made public at European level - left some with little time to react.
'Protected' clients
The 24-page document, which constitutes a plan to shore up supply in case of periods of extreme temperatures, and is required by EU regulations, stated that "it appears necessary to enlarge the perimeter of protected clients within the definition of regulations". It added that the French authorities deemed it necessary to consider all consumers connected to the distribution network as "protected" clients.
The DGEC did not responded to ICIS's requests for comment.
Duroyon noted that there is a "quasi-monopolistic structure" for commercialising gas storage, underpinned by three factors: an obligation for some shippers to buy a certain amount of capacity; storage prices freely defined by storage operators; a limited possibility of bringing competition into the market.
"With the current regulations, we understand that it is really difficult for a storage operator to act fairly to commercialise their capacity with the consequence of some unsatisfactory behaviour for the market.
"A fair, transparent and open process for commercialising storage capacity would be the best way forward to have integrated markets in Europe," he said.
"We could find a way to commercialise this capacity with market that are not necessarily related to obligations," he added.
A second French gas industry source said he felt the government was looking in the wrong place for solutions to the supply security issue.
"What matters is that the system has been designed to face peak demand, but not selling storage capacity is preventing [shippers] from using the system efficiently," he said, referring to a portion of storage capacity having remained unsold in recent years.
Storengy, which provides storage in the PEG Nord and Sud balancing zones in France, recently announced reductions in its prices for 2013, but this was perceived by some as ineffective to address the problem of unsold storage (see ESGM 22 November 2012). ECS
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