Today the annual report monitoring the internal gas market in 2022 and 2023 is published.

This ACER-CEER report provides an overview of the latest developments in European gas markets and examines the drivers of the gas price spikes in summer 2022. The report draws lessons from the crisis and identifies forward-looking implications to offer strategic perspective for policy makers to make the market more resilient. 

What are the key findings and lessons?

• The EU's integrated gas system showed a certain resilience against the energy crisis. Yet, the severe supply shock led to highly congested access to LNG terminals and pipelines, causing price surges, hub price disparities and trading disruptions.
• After the 2022 shock, the European gas market supply and demand balance improved thanks to consistent imports of Liquified Natural Gas (LNG) and a significant decreased gas demand. This resulted in gas prices to trend closer to pre-crisis levels.
• Global gas supply overall is still tight, exposing prices to unexpected developments. China’s LNG demand recovery remains an important influencing factor on EU gas prices going forward.
• The report highlights the lasting impact of the Russian supply shock on the EU energy market and the steps done to overcome the supply dependence. It draws some lessons for the future around the EU gas markets’ future resilience factors: increased EU reliance on LNG; reducing gas demand; revenue redistribution; and the enhanced security of supply role of underground storages.
  • European gas prices will be more exposed to global competition and hence will be more volatile.
  • The reduction in conventional gas demand shall assist the EU’s decarbonisation goals. Yet, it needs to be done smoothly in order to preserve the economic activity and the security of supply that gas offers to the EU’s energy system.

Also today, the European Securities and Markets Authority (ESMA) publishes its report examining the development of gas trading activity in summer 2022. ESMA analyses reveal a well-maintained trading activity despite a more challenging trading environment.

What’s next?

• Save the date: on 16 November 2023, ACER and CEER are organising a webinar on evolving trends in the European gas market. Register here.
• Early 2024: Analysis of LNG market developments.

Access the ACER-CEER European gas market trends and price drivers report.

Dive into ACER’s interactive dashboard and explore the evolution of price and demand supply metrics for the period 2015 to 2023.

ACER is seeking for applicants to join two new expert groups which will be established to advise and contribute to ACER’s work under REMIT. The expert groups will seek to build on the good experience of previous REMIT expert groups organised by ACER.

The expert group on wholesale energy market integrity and transparency will advise on REMIT surveillance, conduct, integrity, and transparency (including assessing the obligation to disclose inside information); as well as on how other EU legislation, or new technologies, could impact energy trading and the functioning of the internal energy market.

The expert group on wholesale energy market data reporting will contribute to improving data collection, in particular how market participants can better comply with the data reporting requirements foreseen by the regulation.

How to apply?

We are seeking for a diverse group of experts with experience in wholesale energy market integrity and transparency, trading, and reporting of REMIT data. We will also be seeking to ensure representation of the stakeholders impacted by the work of ACER (e.g. market participants, organised markets and other persons professionally arranging transactions, Registered Reporting Mechanisms, Inside Information Platforms, etc.).

To apply, please follow the instructions in the Open Letters and make sure you fulfil all the application criteria.

Deadline to apply is Monday 20 November 2023.

Access the Open Letter on the establishment of an expert group on wholesale energy market integrity and transparency and the Open Letter on the establishment of an expert group on wholesale energy market data reporting.

EU Member States need to massively ramp up their renewable power capacity in the coming years. This increase in renewables from variable sources, such as wind and solar, will also increase the need for ‘flexibility’ in the EU electricity system. A joint report released today by two EU agencies, EEA and ACER, demonstrates how Member States could exploit collaboration synergies to unlock flexibility and enhance energy security while contributing to long-term climate neutrality. Key levers include better cross-border planning and forecasting, enhanced use of interconnectors as well as financial incentives and reliable information for electricity consumers to adapt demand when needed.

With the EU 2030 renewables target of 42.5% (compared with 22% in 2021), this decade will see an accelerated decarbonisation of EU electricity supply. A joint report by the EU Agency for the Cooperation of Energy Regulators (ACER) and the European Environment Agency (EEA) underlines the need to double the 'flexibility' of Europe’s power system to keep pace with the growth in renewables from variable sources, such as wind and solar.

Flexibility is the power system’s ability to adjust to the fluctuating generation and consumption of energy. Flexibility can be provided in different timeframes, such as days, weeks or seasons and by different technologies. Currently, peak generation gas plants provide much of the flexibility but with the clean energy transition, other types of flexibility resources are needed from both the demand and supply side. Meeting the flexibility challenge facilitates the deployment of renewables and brings benefits to European Member States and consumers.

The report underlines that: 

• Flexibility in the EU power system needs to almost double by 2030 compared to today to keep up with the growth of variable renewable electricity sources.
• Enhanced electricity interconnection is key. More grids should be built across borders and the existing grid capacity used better. Interconnectors facilitate the efficient flow of electricity across borders to where it is most needed. Existing and planned interconnectors facilitate flexibility to be shared across border and in 2030 could prevent the forced curtailment of variable renewable power (to balance the system) by an amount equivalent to the 2022 electricity consumption of Sweden.
• A combination of demand response and energy savings not only reduces energy bills but also provides much needed flexibility, thus facilitating renewables and supporting Europe’s security of energy supply. In 2030, better demand response and energy savings could reduce the need for power supply from sources other than wind and solar by an amount equivalent to the 2022 electricity consumption of Spain.
• Allowing price signals to drive investments and consumer behaviour is key. Consumers also need reliable information to make well-informed choices.
• The ACER-EEA report calls for Member States to better assess and have complementary national and EU-wide assessments of flexibility needs (as currently being discussed by Europe’s co-legislators in the electricity market design reforms).
• To foster common policies across borders, Member States could introduce regional cooperation on flexibility into their National Energy and Climate Plans (NECPs), and include detailed energy data in their greenhouse gas emission projections.

The ACER-EEA report 'Flexibility solutions to support a decarbonised and secure EU electricity system' is presented by the EU Agencies at today’s (20th October) meeting of Member States’ Energy Director Generals in Madrid, under the Spanish Presidency of the Council of the EU.

What’s next?

Today's joint ACER-EEA report highlights demand response as a key flexibility solution. In December 2023, ACER will publish a report on barriers to demand response that should help Member States unlock its potential.

Read the report.

See the report’s infographic.

ACER publishes today a consultancy study on the impact of EU and national gas storage regulations.

The study was commissioned to VIS Economic & Energy Consultants with the aim of:

• collecting and analysing national measures recently applied by EU Member States (with and without storage facilities) within the framework of the European Gas Storage Regulation;

• assessing how these measures contribute to achieving the storage filling targets, and, where possible, estimating the associated costs; and

• identifying possible difficulties when implementing the measures.

What is the role of gas storage and why is it important?

Gas storages play an important role in the European gas system as they supply up to 25-30% of the total gas consumed in the EU during winter. Storing gas physically in the EU helps mitigating the impact of a potential gas disruption. This is key in a context where the EU’s internal gas production declines, while Europe aims to phase out its remaining dependency on Russian gas supply.

The energy crisis which followed Russia’s invasion of Ukraine in February 2022 underscored the importance of having gas storages adequately filled in across Europe, in case of potential gas supply disruptions.

When gas prices are similar during winter and summer, or even more expensive during summer (as it happened during 2022), market participants are discouraged from injecting gas into storages during the summer, as they would do it at a loss. As a consequence, winter storages levels may be lower and less gas can be withdrawn in case of need. This may pose a risk to the security of gas supply as storage levels at the start of the winter may not be sufficient to address supply-demand imbalances. In such cases, administrative measures may be required to ensure that gas storages are filled in, regardless of unfavourable market signals.

What are the main findings of this report?

The analysis concluded the following measures recently helped meeting the storage filling targets, despite the discouraging market signals:

• Financial incentives for storage users: offering financial incentives for storage users facilitated the utilisation of storage capacity. Incentives such as tariff discounts and direct subsidies have proved to be effective. On the other hand, the interest of market participants in taking part in more elaborate incentive schemes, such as signing contracts for differences, was limited.

• Stockholding obligations: imposing stockholding obligations help guaranteeing that storing filling targets can be achieved. However, when positive market price signals incentivise market participants to store gas, there is the risk they can reduce the overall flexibility of the gas system (if stockholding obligations account for the largest part of the storage capacity).

• Last resort storage entities: appointing an entity to provide storage filling of last resort contributes to safeguard security of supply, in case the market would not act, but it comes at a cost. The mechanism should be made more efficient by planning when the entity should act, volume requirements, and introducing risk reduction mechanisms (e.g. price hedging by the designated entity).

• Use-it-or-lose-it mechanisms: implementing these mechanisms enabled the swift release of booked but unused capacity and contributed considerably to storage filling.

The report further concluded that some measures are in need of greater transparency and verifiability.

The report also found that:

• Member States without underground storage facilities made efforts to store gas in neighbouring countries but the remaining technical and commercial constraints should be addressed, by strengthening coordination between Member States with and without storage and finding ways to enhance regional solidarity.

• All Member States with underground gas storage facilities met the filling target obligations. Measures implemented by Member States helped overcome negative market signals during the 2022 injection period and contributed to achieve adequate levels of stored gas.

• In 2022, the Member States’ underground facilities collectively stored over 630 TWh of gas as result of the measures. This amount represents approximately 53% of the European Union’s total aggregated storage capacity.

What are the next steps?

As a next step, the Council of European Energy Regulators (CEER) will undertake another study on storage burden-sharing mechanisms and identification of best practices and recommendations to enhance the efficiency of storage filling obligations.

Access the report and the slides  summarising the most important findings.

8 March 2024 update: Access the second part of the study. 

With gas markets being impacted by a global pandemic (2020) and a European energy crisis (2022), the resilience of the current market rules (also known as “network codes”) has been tested. Although they have mostly ensured a proper market functioning (see ACER’s Market Monitoring Reports and congestion reports), lessons have yet to be learned to further enhance market resilience.

The European gas market must also ensure its readiness to align with the latest policy and technological developments, guaranteeing that the decarbonisation targets set by the Green Deal can be met.

Against this background, the latest European Gas Regulatory Forum (also known as “Madrid Forum”) has recently emphasised the importance of having gas market rules which can adequately reflect this evolution, and therefore prompted for the revision of the Capacity Allocation Mechanisms Network Code (“CAM NC”).

What is the Capacity Allocation Mechanisms Network Code?

The rules for allocating gas transmission capacity have been in place since 2017, when the current version of the Network Code on Capacity Allocation Mechanisms was adopted.

These market rules harmonise how network users can utilise the gas transmission network to enter or exit a market, and how these capacity rights can be obtained.

What is the role of ACER?

As a first step, ACER is planning a public consultation (opening on Tuesday 14 November 2023) and workshop (on Tuesday 12 December 2023) to take stock of what works under the current market rules and collect views from stakeholders on the way forward.

ACER will benefit from this information when it may recommend amendments to the CAM NC in the course of 2024.

What are the next steps? Save the dates!

ACER is launching a public consultation on the “Capacity Allocation Mechanisms Network Code: achievements and the way forward”, which will run from Tuesday 14 November 2023 until Friday 5 January 2024.

On Tuesday 12 December 2023, ACER will also organise an online workshop on the same topic. Registrations will open on Tuesday 14 November 2023.

The event aims to:

• debate the achievements and possible areas of improvement of the CAM NC; and

• provide stakeholders with the opportunity to present their views.

ACER also intends to publish a policy paper, tentatively in the first quarter of 2024, to follow up on any identified areas of improvement. This policy paper will be a first input when the formal review of the CAM NC may be launched in the course of 2024.