Baltic Regional Gas Market Coordination Group

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Members

​​​​The Baltic Regional Gas Market Coordination Group is composed of:

  • Finland

  • Estonia

  • Latvia

  • Lithuania​

A brief historic introduction

​The first Regional Gas Market Coordination Group (RGMCG) Action Plan began on 2017 with the implementation of the implicit capacity allocation of the interconnection points between Latvia-Lithuania and Estonia-Latvia. It provided the organized market place where gas could be easily traded cross-border, while at the same time minimising the administrative burden of potentially having third party access (TPA) and balancing agreements between TSOs.

In 2018, the tariff model and inter-TSO compensation (ITC) mechanism for the common Baltic-Finnish market was created, resulting in a stepwise integration approach.

The NRAs of Finland, Estonia and Latvia (FinEstLat) agreed to strengthen their cooperation and creating the FinEstLat market, which became operational on 1 January 2020.

The FinEstLat system

​The FinEstLat single natural gas transmission entry-exit system, also called the 'FinEstLat system', has specific characteristics.

The NRAs have amended the methodologies for calculating the transmission tariffs and approved the tariff scheme, which became applicable as of 1 January 2020. ACER published its analyses of the consultation documents of the Estonian, Latvian, Lithuanian and Finnish ​reference price methodologies.

Two balancing areas are set up in the FinEstLat system, considering the different level of market maturity in the FinEstLat countries: the common Estonian-Latvian balancing zone and the Finnish balancing zone.

The Regional Gas Market Coordination Group (RGMCG) continues working on a four-country market model, including Lithuania into the regional market.​​​​

Following the Roadmap approved in early 2020:

  • In March 2020: the Common Regulations for the Use of Natural Gas Transmission System were amended eliminating the inconsistencies that arose during the first months of operating Estonia-Latvia common balancing zone.
  • In April-August 2020: external analysis was carried out by Artelys to support a four-country entry tariff area and to design and justify an ITC-model for the four countries that is compliant with all the requirements.
  • In May-August 2020: the TSOs jointly conducted an analysis for further integration options and concluded that full market integration should be decided upon only after operational efficiency is significantly improved (internal congestion eliminated), i.e. after 2024 when PCI “Enhancement of Latvia-Lithuania interconnection” is completed.
  • In August 2020: the region started to develop the Solidarity agreement based on the Regulation safeguarding the security of gas supply.
  • In October 2020: a Memorandum of understanding was signed between the four NRAs to facilitate cooperation, coordination and the creation of the Baltic-Finnish market. A Working Group with the four NRAs was also established.
  • ​In December 2020: the regional TSOs scrutinized the benefits of a common system for issuing and trading guarantees of origin for gre​en gases.

 

 

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