Energy Community eyes PEGAS-style trading platform for SEE

LONDON (ICIS)–The Energy Community is working on a landmark project that could see the establishment of a PEGAS-style exchange for central and eastern Europe.

Speaking to ICIS, Gregor Weinzettel, gas specialist at the Energy Community, said the SEEGAS initiative aims to bring together exchanges and transmission system operators (TSOs) in Bulgaria, Croatia, Greece, Hungary, Poland, Romania, Slovakia and Slovenia to launch an integrated platform.

The outfit would offer balancing and spot gas trading in a first stage but services could be expanded to include clearing as well as well as electricity trading.

Weinzettel said the Energy Community, which has been established to extend the EU’s free market principles to neighbouring countries, was already in talks with the Romanian and Ukrainian exchanges BRM and UEEX, as well as with regional TSOs including GTSO in Ukraine.

The first round of discussions with regional stakeholders will be on 15 December.

He said BRM and UEEX, which have some of the highest liquidity in the region, could launch the core of the integrated SEEGAS platform which would later expand to include other regional countries.

Weinzettel said TSOs and exchanges in Hungary and Poland have also expressed an interest.

“The role of the Energy Community is to bring parties together and facilitate dialogue,” said Weinzettel, who is also chairman of the UEEX advisory board. “It is important for us to work with private exchanges because they have more flexibility and any initiative is put to the market and discussed with market participants,” he added.

Weinzettel said Turkey – which boasts a liquid electricity spot exchange and is working to develop its gas platform – as well as neighbouring Georgia – which is liberalising its energy markets – could also join the initiative.

He explained the PEGAS model pursued by western European hubs has helped to bring more liquidity to the region, laying the foundation for a pan-European platform.

PEGAS was launched in 2013 when Germany-based EEX and France-based Powernext established a shared trading platform.

Countries such as the Netherlands, the UK, Austria, Denmark, Italy and the Czech Republic also joined PEGAS in recent years.

Weinzettel said the model would help central and eastern European countries to adopt best practices and enable interoperability and market access at an early stage and reduce integration costs at a later stage.

He admitted that TSOs were crucial in the project because they would be required to open up more capacity to ensure flexible flows of gas or electricity.

He pointed out that the support of regional exchanges was crucial in this respect because they would persuade local grid operators to open up borders and guarantee sufficient capacities for cross-border flows.