The Status of Gas TSOs in Europe

Publication Date	January 2008
Publisher	Datamonitor
Product Type	Brief
Pages	20
ISBN Number	not applicable
Product Code	DAT09574

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Summary

Introduction

EU energy market liberalization and increasing gas imports are major challenges facing gas Transmission System Operators (TSOs). Understanding the European gas transportation landscape is vital in comprehending the important role of gas TSOs in achieving a single European energy market.

Scope

A detailed investigation into the gas TSOs of the top 15 EU gas consuming markets.
Insight and analysis of the impact of the EU Third Energy Package on gas TSOs.
An examination of the profitability of the major EU gas TSOs.

Highlights

TSOs generate extremely high revenues, regardless of their ownership status. Despite regulatory pricing oversight, on the whole, TSOs generate higher profit margins than the major gas utilities in their respective markets.

Storage and LNG facilities allow TSOs to compete outside their monopoly. TSOs can therefore provide storage services for base load and peakload demand to mitigate their regulatory risk.

Stagnating gas production and growing consumption have led to greater import volumes through EU member states. This continuing trend means that gas transit is an important part of a TSO's operations.

Reasons to Purchase

Gain insight into the increasingly significant role of gas transit in the European gas landscape.
Understand how the EU's Third Energy Package will impact gas TSOs.
Comprehend the differences between ownership unbundling and independent system operators.

Content

Catalyst
Summary
Analysis
- This brief analyses TSOs from the EU's 15 leading gas consuming markets
- TSOs vary widely in their legal status and in the services that they offer
- There is a weak relationship between national gas penetration and network length
- The majority of TSOs are affiliated to a VIU
- TSOs have high profit margins, providing VIUs with a disincentive to divest them
- Storage facilities allow TSOs to compete outside their monopoly
- LNG facilities allow TSOs to enter the commercial arena
- Increasing EU gas imports will create greater challenges for gas TSOs
- Gas transit between networks is increasing alongside gas imports
- Gas transit has become an intricate issue for many TSOs
- TSO co-operation with balancing rules is necessary for market cohesion
- Increased legislation aims to enhance gas market competitiveness
- Transmission networks are a major feature of the EU's Third Energy Package
- Network ownership unbundling remains unresolved
- Formalizing co-operation between TSOs would lead to improved network management
- Rules on transparency and record keeping are to be enforced to enhance investor confidence
- Regulatory oversight of access to storage and LNG facilities is to be re-examined
Appendix
- Country definitions
- Definitions
- Further reading
- Datamonitor Consultancy
- Ask the Analyst
- Disclaimer
List of Figures
- Figure 1: TSOs under analysis, by market and 2006 national gas consumption
- Figure 2: Network length and gas volumes transported, 2006
- Figure 3: The independence of transmission systems
- Figure 4: TSO and utility profit margins, 2006
- Figure 5: Regulatory pricing regimes, 2006
- Figure 6: Markets where TSOs offer natural gas storage, 2006
- Figure 7: Markets where TSOs offer LNG facilities, 2006
- Figure 8: Stagnating gas production and growing consumption have led to greater import volumes through EU member states
- Figure 9: Transmission networks are a major feature of the EU's Third Energy Package