Gaslink was set up in July 2008 in response to a European Union directive that set-out the requirement of unbundling the functions of Transmission Systems Operator (TSO) and Distribution Systems Operator (DSO) functions from those of a vertically-integrated gas entity. Under the meaning of the directive, Bord Gáis Éireann (BGE) is recognised as a vertically-integrated gas entity, and as a result Gaslink was established to comply with the unbundling requirements. Gaslink holds both the DSO and TSO licenses for the Republic of Ireland gas market. The company works with both the Northern Irish and UK operators to facilitate the flow of gas across borders. Gaslink is also heavily involved in developments in the European gas market, and this is the area of Gaslinks work on which we will focus.
Gaslink’s role in Europe
In September 2009 the EU passed a directive, called the ‘Third Gas Package’. The objectives of the Package are to further progress the liberalisation of gas markets in Europe and to facilitate the development of a single European gas market. The directive contains various codes and guidelines that seek to create cross-border regulatory rules, which will in turn help to facilitate trade between national markets and support their integration.
The key focus of the directive is to promote a single European electricity and gas market, and as part of this, to promote the development of regional markets. The first step of this ‘Third Gas Package’ is the development of regional markets. There are three regional markets: North West, South East and South. Ireland is represented by Gaslink in the North West Gas Regional Initiative (NWGRI). Other members of this regional market include The Netherlands, Great Britain, Belgium, France, Northern Ireland, Germany, Denmark, Sweden and Norway. NWGRI’s work focuses on developing and improving transparency, capacity, storage and investment arrangements in the region. It is believed that the success of the regional co-operation of these markets will act as a stepping stone to the creation of a single European energy market.
The Third Gas Package also provided for the establishment of two new European-wide organizations, one for transmission system operators and the other for the regulatory authorities that regulate them. The result of this was the establishment of the European Network for Transmission System Operators for Gas (ENTSOG), and the Agency for the Co-Operation of Energy Regulation (ACER). ENTSOG was set up in December 2009, and Gaslink was one of its founding members. ENTSOG is the European body responsible for delivering upon the goal of creating a single European gas market. The Commission for Energy Regulation (CER) represents Ireland in ACER.
Gaslink’s role within ENTSOG
Gaslink, as Ireland’s TSO, works closely with ENTSOG and is actively involved in their various work groups. As Ireland is on the periphery of the European transmission network, it needs to be well represented at ENTSOG, as central policies and developments may not always be appropriate for the Irish market. As a result, two Gaslink employees following competitive interviews have been seconded to ENTSOG to ensure that Irish market arrangements and interests are being given a strong voice in Europe.
Within ENTSOG there are a number of working groups covering all aspects of the gas industry. These groups contain representatives from the various TSOs affiliated with ENTSOG. These groups seek to harmonise their activities for implementation across all European TSOs. Currently, various TSOs around Europe employ varying practices, such as different IT interfaces, tariff pricing and gas capacity booking arrangements. By harmonising the individual activities of each individual TSO, this will progress the development of a single European gas market and facilitate trade between national markets.
Gaslink is also responsible for working with ENTSOG in its preparation of its Ten Year Network Development Plan (TYNDP). This plan explores the ability of Europe’s network system to meet future supply and demand scenarios. The plan also provides a view of what the future supply, demand and capacity landscape of a single European gas market would look like. The information contained in the TYNDP confirms the declining character of gas production in Europe, which will necessitate the increase of gas imports to cover the European demand in the future.
In Gaslink’s capacity as the National Gas Emergency Manager, it is a member of ENTSOG’s Task Force for Emergency procedures (TFEP), and it chairs the Gas Emergency Planning Group. These groups are in place to ensure security of supply to both the Ireland and the European gas networks.
To date, the role of ENTSOG has been effective in progressing the ideal of a single European gas market. Gaslink has played a key role to date in the success of ENTSOG, and has been effective in implementing the changes agreed upon by ENTSOG.
Gaslink’s role in Ireland
As TSO and DSO of the Irish gas network, Gaslink is responsible for:
• facilitating competition in the market;
• creating and developing the contractual framework with industry to flow gas within Ireland and for negotiating all associated legal contracts;
• facilitating all new connections to the network;
• ensuring a fair market for all users;
• ensuring safety of the network; and
• expanding the gas network across the country.
Gaslink, in conjunction with the relevant regulatory authority and industry stakeholders, is responsible for developing and maintaining the strategy for the Irish natural gas retail market. It is responsible for establishing market rules, supporting initiatives from various industry bodies and achieving compliance with EU legislation; as well as playing a critical role in the development of an All-Island gas market. Gaslink co-ordinates industry meetings at both wholesale and retail levels on an All-Island basis. There are currently 18 companies who are licensed to ship gas through the Irish gas transportation system and Gaslink manages these contracts.
An independent subsidiary of Bord Gáis Éireann, Gaslink has its own Board of Directors. However, Gaslink does not own the natural gas transportation system and much of the day-to-day work is carried out in respect of the operation and maintenance system by Bord Gáis Networks on behalf of Gaslink.
To conclude, Gaslink plays a key role in both the Irish and European gas networks. Gaslink will continue in their involvement with ENTSOG and will strive to realise the objective of achieving a single European gas market.
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