market sharing in the French and German gas markets.
(PRWEB) October 21, 2010
EyeForEnergy have announced the launch of the European Gas Markets Summit taking place February 15-16, 2011 in London. The agenda is aimed at addressing the full matrix of challenges driving change in European Gas Market Dynamics.
The changes under way in Europe’s natural gas industry amount to nothing less than a revolution. Tough new competition legislation is forcing incumbents to restructure their businesses, while easing the path for new entrants. Uncertainties over future demand and supply have exacerbated security of supply concerns, while stimulating interest in unconventional gas production. Meanwhile, the European Union’s determination to lead the world in climate change mitigation has created uncertainty over whether future policy will stimulate gas demand or dampen it. How should the industry respond to these multiple uncertainties?
In July 2009, the European Commission imposed fines of €553 million each on E.ON and GDF Suez – a total of more than €1 billion – for “market sharing in the French and German gas markets.” Announcing the decision, the then Competition Commissioner, Neelie Kroes, said: “These are the first commission fines imposed for an anti-trust infringement in the energy sector and send a strong signal to energy incumbents that the commission will not tolerate any form of anti-competitive behavior.”
The scale of the punishment was evidence of the frustration that the Commission was feeling about the slow pace of market liberalisation – despite more than two decades of effort – and its determination to get its way. Further evidence of this determination came in the summer of last year when the European Union (EU) adopted a “third package” of legislation that the Commission believes will succeed where previous legislative packages have failed. It must be transposed into national law in all member states by 3 March 2011. Not surprisingly, Europe’s big gas companies have been busy preparing for what will be a much tougher regulatory regime.
Even if that were all that Europe’s gas industry had to contend with, the going would be tough. But market liberalisation and competition are not the EU’s only energy priorities. Security of energy supply has been a major concern ever since the energy crises of the 1970s. This concern was ramped up at the start of 2009 when yet another dispute between Russia and Ukraine led to unprecedented interruption in Russian gas supply to Europe.
The European Union also sees itself as a world leader in efforts to mitigate climate change by reducing greenhouse gas emissions. That too has major implications for energy policy in general, and natural gas policy in particular. Whether this will reduce demand for gas or increase it will depend on specific policy measures, and is likely to vary from one member state to another.
The uncertainties that these developments have generated have been multiplied by other evolving trends. The global recession that began in 2008 has had a major impact on gas market dynamics around the world. Gas demand in Europe plummeted in 2009 and it remains to be seen how quickly it will recover. The shale gas revolution in the US has unexpectedly pushed the nation to the top of the gas producers’ league – and pushed LNG targeted at the US into other markets, especially Europe.
Meanwhile, a new wave of LNG from projects sanctioned during 2003-2005 has contributed to the global gas glut. This glut has put immense pressure on one of the very foundations of the gas industry – the traditional long-term, oil-indexed, take-or-pay gas sales contract.
Clearly, the seismic changes under way in the gas industry are creating challenges – but change almost always creates the potential for new opportunity. For Europe’s gas industry, these are demanding but also interesting times. The greatest challenge of all will be to navigate successfully the multiple uncertainties that the industry faces: confronting the challenges while maximising the opportunities.
Responding to these challenges EyeforEnergy have created the European Gas Markets Summit February 15-16 2011, where over 180 senior level decision makers from across Europe’s Gas Industry will meet. Speakers at the event include Philip Lowe, Director General for Energy at the European Commission and Alberto Pototschnig the newly appointed director of the Agency for the Co-operation of European Regulators.
For more information visit http://www.eyeforenergy.com/gasmarkets or contact the organisers on the details below.
+44 (0)20 7375 7227