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Analysis of a liberalised German Gas Market

Author

Listed:
  • Philipp Scheib

    () (EnBW Trading, Methodology & Models department)

  • Frieder Kalisch

    (EnBW Trading, Methodology & Models department)

  • Bernhard Graeber

    (EnBW Trading, Methodology & Models department)

Abstract

European gas markets are experiencing fundamental change due to decrease in domestic production, increase in demand and liberalisation efforts of the European Union. Germany represents the biggest single market in Continental Europe and is also a major transit country for gas. Gas market liberalisation in Germany, however, has so far shown few effects. In this paper we look at how third party network access in an entry-exit regime with different balancing zones (“market areas”) will influence the market. We have developed a multi-regional, inter-temporal model for Germany including transit flows to and from neighbouring countries with monthly resolution. The model is based on the following assumptions: Long term import contracts will stay in effect, network access is regulated based on an entry-exit-system, domestic production will continue to decline, no new infrastructure projects that are not known today can become operational before 2009 and access to storage is not regulated. The model focuses on the transmission system, looking at transit flows between entry-exit-zones. The model proves to be a valuable tool for analysing different set-ups of market areas. Preliminary model results did not confirm the need for 19 market areas in Germany. Data availability still needs to be improved, in order to allow a more detailed analysis and produce tangible and robust results.

Suggested Citation

  • Philipp Scheib & Frieder Kalisch & Bernhard Graeber, 2006. "Analysis of a liberalised German Gas Market," Working Papers 2006-11, Center for Network Industries and Infrastructure (CNI).
  • Handle: RePEc:cni:wpaper:2006-11
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    File URL: http://www.cni.tu-berlin.de/fileadmin/documents/RePEc/cni/working_paper/scheib_2006_analysis_of_a_liberalised_german_gas_market-cni_wp_no_2006-11.pdf
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    More about this item

    Keywords

    natural gas; trading; regulation; network industry; linear optimisation;

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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