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Topic of the Month


Gas

Ilaria Conti

Topic of the Month

28.03.2017

Infrastructure: the difficult ingredient of the recipe

Written by Ilaria Conti Being Italian – and a woman! – the world has high expectations concerning your cooking skills.  Your mother is almost certainly a good […] read more

Gas

Ilaria Conti

Topic of the Month

14.03.2017

Can a new energy Governance fill the gaps of the EU gas market?

Written by Ilaria Conti With the Clean Energy Package released last November, the EU Commission proposed a new Regulation on the Governance for the Energy Union, specifically concerning […] read more

Gas

Ilaria Conti

Topic of the Month

6.03.2017

EU Gas market design: the quiet before the storm?

Written by Ilaria Conti It’s currently time for reflection, in Brussels, on EU gas regulation and market design. With the Third Energy Package close to being fully […] read more

Electricity

Pradyumna Bhagwat

Topic of the Month

27.02.2017

Driving on the electricity highway

Written by Pradyumna Bhagwat It is estimated that one in every hundred cars sold today is powered by electricity. The yearly sales of electric vehicles (EVs), […] read more

Electricity

Pradyumna Bhagwat

Topic of the Month

21.02.2017

The “balancing act” of integrating batteries into the market

Written by Pradyumna Bhagwat The use of fast responding resources such as batteries for balancing services has the potential to improve operational and economic efficiency and […] read more

Electricity

Pradyumna Bhagwat

Topic of the Month

14.02.2017

Batteries: Who will master the jack of all trades?

Written by Pradyumna Bhagwat One of the key debates on the topic of batteries revolves around its ownership. In this context, ownership could be defined, as […] read more

Electricity

Pradyumna Bhagwat

Topic of the Month

7.02.2017

Batteries: The jack of all trades

Written by Pradyumna Bhagwat The EU 2020 energy and climate targets have led to a significant increase in the share of renewable energy sources in the […] read more

Electricity

Leonardo Meeus

Topic of the Month

31.01.2017

My take on distributed electricity storage

Written by Leonardo Meeus The issue with existing batteries is that they suck Here is an abstract from the speech Elon Musk gave in 2015 to […] read more

Electricity

Leonardo Meeus

Topic of the Month

25.01.2017

My take on electric vehicle charging infrastructure debate

Written by Leonardo Meeus At an FSR Regulatory Policy Workshop this month, jointly organised by the transport and energy colleagues, we learned that the electric vehicle […] read more

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Ilaria Conti

Infrastructure: the difficult ingredient of the recipe

- Gas

Written by Ilaria Conti

Being Italian – and a woman! – the world has high expectations concerning your cooking skills.  Your mother is almost certainly a good cook, not to mention your grandmothers – whose pasta al forno and tiramisu have indelibly marked your family’s taste buds for generations.

Flour, sugar, eggs…the recipe is often easy and the ingredients are always the same, but in every recipe there’s always a secret – usually a tricky ingredient – which is able to make the difference between a masterpiece and a total failure.

In the recipe for the perfect gas market, this ingredient is infrastructures.

What’s the right amount?

Luckily enough, I still have the possibility to find out my grandmothers’ cooking secrets by simply calling and asking them. “Nonna, how much cinnamon should I add? How much milk do you use for your besciamella?”.  And, to make things even more complicated, the answer I get is always the same: “Oh, you know…quanto basta!”. 

Yes – because the right amount of the tricky ingredient is always quanto basta (in English, “the right amount” or “as much as you need”)[1] – a quantity that nobody has yet managed to measure, but which has to be included in the right doses to contribute to the successful outcome of the recipe!

Applied to the gas market, how many LNG terminals does Europe need? Do we have too many gas pipelines already? Or too few? Or is the current number of gas infrastructure just the right one?

Europe has tried to answer these questions by developing a common methodology for EU infrastructure development. Regulation 347/2010 established a process with clear roles for the EU Commission, NRAs and ACER concerning the development of new infrastructures.

Regulation 347/2013 provided guidelines concerning the identification and analysis of the so-called Projects of Common Interest (PCIs) and required ENTSOG to develop a methodology for an EU-wide cost-benefit analysis (CBA) of PCIs.

The Florence School has been researching in the past on these subjects. Very recently, FSR – jointly with Deloitte – was tasked by the European Commission to look into the methodology currently used by ENTSOG for the PCI selection and CBCA processes and identify recommendable updates or improvements.

We organised an online debate on 10 March to discuss our first findings and our draft recommendations have been on public consultation until last week. FSR and Deloitte will be collecting the feedback received and shall be working at a final draft in the course of the next weeks.

So, to conclude, the main ingredients are all there: competition, liquidity, transparency of information… all in different doses they contribute to a pretty well-mixed dough.

The constant challenge is to identify the “quanto basta” level of gas infrastructures for Europe at all times, but what we can do is looking into the right methodology – to be regularly updated – to assess at least which elements should be taken into account, in the analysis of a new project.

 

[1] This is not an invention of my grandmothers. “Quanto basta” is found as q.b. in most of Italian recipes.