IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/1890.html
   My bibliography  Save this paper

Market development in the United Kingdom's natural gas industry

Author

Listed:
  • Juris, Andrej

Abstract

The author shows how, in the United Kingdom, government and industry participants have responded to challenges created by opening the natural gas industry to competition. He concludes that, as a result of cooperation between the government and industry participants, appropriate mechanisms can be established for operating and balancing system and for trading natural gas and transportation capacity. The deintegrated natural gas industry in the United Kingdom is off to a promising start after a long gestation. The author describes the processes of the Network Code, a market-based method for balancing the pipeline system and optimizing transportation by British Gas TransGo (BGT), the transportation and storage arm of British Gas (formerly the publicly owned monopoly transporter and supplier of natural gas). The Network Code is a set of rules that determine how users of the pipeline system cooperate with the system operator when seeking transportation services. The operator uses price signals generated through the flexibility mechanism to choose the balancing measures with the lowest cost to society. The author analyzes the four mechanisms used in physical gas markets, describes developments in the U.K.'s financial gas market, and describes pipeline capacity trading in primary and secondary markets and BGT's pricing of capacity and transportation services. The most important issue today, says the author, is whether industry participants can reach a consensus on how to enhance the existing framework to make markets more efficient. Development of the underdeveloped financial gas market will require cooperation between BGT and the Office of Gas Supply to give the International Petroleum Exchange access to BGT's electronic network, so that it can record and settle transactions. Both BGT and its customers will need to contribute time and resources to developing an efficient tariff structure for pipeline capacity and transportation services in the contract and tariff markets.

Suggested Citation

  • Juris, Andrej, 1998. "Market development in the United Kingdom's natural gas industry," Policy Research Working Paper Series 1890, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1890
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1998/03/01/000009265_3980429111137/Rendered/PDF/multi_page.pdf
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1890. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.