A Gas Target Model for the EU: Florence School Proposes MECO-S

The discussion about the need for and the pros and cons of a gas target model started around the beginning of 2010 and found its first point of culmination in the conclusions of the 18th Madrid Forum in September 2010 which invited stakeholders to start a process to develop a EU Gas Target Model. Florence School of Regulation proposes a European gas target model with a special focus on market architectures and investment: The MECO-S Model. The MECO-S is a “Market Enabling, Connecting and Securing” Model describing an end-state of the gas market to be achieved over time. The common foundation of the MECO-S Model is the economic investment. Investment aims at supporting the other pillars in realizing their respective goals e.g. in contributing to the creation of functioning markets or in contributing to improved price alignment.