LIBERALISATION OF THE ESTONIAN GAS MARKET
3.6
Interconnection within Europe
Much of Europe is well connected through gas transmission pipelines. Through the presence of interconnectors, market traders are increasingly able to move gas between countries in order to balance their system needs: for example, some flexible long-term Dutch and Belgian contracts are able to supply GB in winter. Interconnection plays an important role in increasing pan-European competition and in creating a single European gas market. However, the European gas network is not uniformly developed. In particular, Eastern Europe, Spain and Portugal rely on gas imported to the EU and have very little interconnection capacity with the rest of the EU. It is the aim of the European Commission to support the single market through an increase in interconnection. To this end, both the new EU Regulation on security of supply and the financial crisis support package to the EU, both aim to bolster interconnection between the member countries, especially interconnectors allowing west-to-east flows. The development of trans-European energy networks (TEN-E) plays a crucial role in ensuring security and diversification of supply. Interoperability with the energy networks of third countries (accession and candidate countries and other countries in Europe, in the Mediterranean, Black Sea and Caspian Sea basins, and in the Middle East and Gulf regions) is also essential. The European Commission assists a variety of TEN-E projects, and ranks them under three categories, as follows:
Projects of common interest must display potential economic viability. The economic viability of a project is assessed by means of a cost-benefit analysis in terms of the environment, the security of supply and territorial cohesion.
Priority projects are selected from among the projects of common interest. To be eligible, they must have a significant impact on the proper functioning of the internal market, on the security of supply and/or the use of renewable energy sources. Priority projects have priority for the granting of Community financial assistance.
Projects of European interest are certain priority projects of a cross-border nature or which have a significant impact on cross-border transmission capacity.
In a separate development, following the economic crisis, some projects have also been recognised under the European Energy Programme for Recovery (EEPR) and are eligible for funding based on their importance in helping Member States’ economic recovery. This is discussed in more detail in Section 5.2.4. Some examples of proposed interconnector projects include:
The proposed TLG pipeline crossing Austria from Germany to Italy (shown in Figure 17), where it joins the TAG pipeline is a project of common interest.
The Lanzot reverse flow project allowing gas to flow from the Czech Republic to Slovakia is an EEPR project.
Projects to improve linkage between the Baltic States and Finland to end their isolation from the rest of the EU.
Expansion of interconnector between Spain and France is a project of European interest and an EEPR project.
Two projects extending from the landing point of the Nord Stream pipeline in Germany – the NEL pipeline extending the WINGAS network towards the
PÖYRY MANAGEMENT CONSULTING
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