Analysis of a liberalised German Gas Market

Philipp Scheib (), Frieder Kalisch and Bernhard Graeber
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Philipp Scheib: EnBW Trading, Methodology & Models department
Frieder Kalisch: EnBW Trading, Methodology & Models department
Bernhard Graeber: EnBW Trading, Methodology & Models department

No 2006-11, Working Papers from Center for Network Industries and Infrastructure (CNI)

Abstract: European gas markets are experiencing fundamental change due to decrease in domestic production, increase in demand and liberalisation efforts of the European Union. Germany represents the biggest single market in Continental Europe and is also a major transit country for gas. Gas market liberalisation in Germany, however, has so far shown few effects. In this paper we look at how third party network access in an entry-exit regime with different balancing zones (“market areas”) will influence the market. We have developed a multi-regional, inter-temporal model for Germany including transit flows to and from neighbouring countries with monthly resolution. The model is based on the following assumptions: Long term import contracts will stay in effect, network access is regulated based on an entry-exit-system, domestic production will continue to decline, no new infrastructure projects that are not known today can become operational before 2009 and access to storage is not regulated. The model focuses on the transmission system, looking at transit flows between entry-exit-zones. The model proves to be a valuable tool for analysing different set-ups of market areas. Preliminary model results did not confirm the need for 19 market areas in Germany. Data availability still needs to be improved, in order to allow a more detailed analysis and produce tangible and robust results.

Keywords: natural gas; trading; regulation; network industry; linear optimisation (search for similar items in EconPapers)
JEL-codes: C61 L14 L95 Q41 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2006
New Economics Papers: this item is included in nep-com, nep-eec and nep-ene
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