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European Commission - Press release

Gas markets: Commission reinforces market conditions in revised exemption decision on OPAL pipeline

Brussels, 28 October 2016

The Commission has today adopted stricter exemption conditions for the operation of the OPAL gas pipeline. The Commission wants to ensure properly functioning liquid and competitive gas markets in Europe, and today's decision follows these guidelines.

A competitive EU gas market where energy companies can trade freely and have easy access to pipelines is essential for ensuring secure and affordable supplies to all EU citizens and is a priority under the Energy Union strategy.

Since its launch in 2011, OPAL has been to a 100% exempt from EU internal energy market rules on third party access and tariff regulation. Now, according to the revised decision, the use of only 50 % of OPAL's capacity will be exempt from third party access rules and the operation of the other 50 % of the pipeline capacity will be covered by stringent EU market rules. These rules ensure transparent and non-discriminatory access to all gas companies. Moreover, additional conditions are now in place in order to create better trading possibilities for all market participants.

In its decision, the Commission finds that while changes to the initial exemption decision are justified in view of market changes since 2009, more stringent conditions are neededto ensure fair and non-discriminatory access to the pipeline for all market participants and thus contribute to market integration, security of supply and improved competition on the Czech market. In its decision, the Commission notably requests that a significant amount of the pipeline's capacity has to be made available as a reliable – so called "firm" – capacity for competitors. Under given conditions, the Commission may even revise this threshold further upward. In addition, companies with a dominant position on the Czech market are not allowed to outbid other users of the pipeline for this capacity, while added monitoring obligations provide further safeguards for the pipeline to contribute to market integration and competition.

The additional conditions introduced in the Commission's decision reflect the latest market developments, – increasing cross-border trade in Central Europe and growing liquidity in the markets – and, in ensuring that all companies have access to the pipeline, it allows the competitive gas markets to develop further to the benefit of European consumers. Today's Decision for an efficient use of existing pipelines contributes to market integration particularly in this case of the Czech and German markets. Enabling greater access from the German hub "Gaspool" to the Czech market will also increase security of supply.

The exemption framework will, as was the case under the earlier decision, be applicable until 2033. Following this date, standard regulatory provisions will fully apply to the OPAL pipeline. The decision is binding on the German energy regulatory authority with immediate effect.

 

Background

The OPAL pipeline connects Nord Stream 1 in Northern Germany with the gas infrastructure in the Czech Republic.

According to EU law, exemptions from the EU gas rules on third party access, regulated tariffs and unbundling can be granted – subject to the Commission's approval – in order to enable new investments which would not take place if the standard regulatory provisions were to be applied in full.

In 2009, the OPAL pipeline was fully exempted from third party access and tariff regulation provisions. However, to ensure effective competition on the gas markets in the Czech Republic, companies with a dominant position on one of the Czech gas markets (which includes the Gazprom group and RWE group) were only then allowed to book more than 50 % of the capacity for the Czech Republic if they implemented a 'gas release programme', a sale of gas under conditions set by the regulatory authority. Such a programme was never implemented and as a consequence, significant parts of the pipeline capacity remained unused.

In May 2016 the German Energy Regulator Bundesnetzagentur notified to the Commission changes to the 2009 exemption decision. These suggested changes replace the 50% booking limitation, which was subject to a gas release programme, by non-discriminatory access to half of the capacity. Thus, all parties, including dominant companies, could book this half of the pipeline, whereas the other half would remain fully exempt. In addition, a share of capacity would need to be made available as firm capacity.

In its decision today, adopted under the third Gas Directive (Directive 2009/73/EC), the Commission sets out the following main additional conditions:

-       The amount of firm short-term capacity from the Gaspool hub ("FZK capacity") to be made available has to be increased up to 20 % in case of demand. If technically feasible, changes to the competitive situation are such as to justify an increase, and the benefits of an increase outweigh the costs thereof, the Commission can request further increases of this capacity.

-       Undertakings or groups of undertakings with a dominant position in the Czech Republic or which control more than 50 % of natural gas arriving at Greifswald may bid for this capacity only at the base price. The base price may not exceed the average price of comparable capacity on other pipelines.

-       Bundesnetzagentur has to monitor and report on the effectiveness of the OPAL decision for improving competition on the Czech market. The OPAL operator shall be certified under the applicable unbundling provisions.

 

The Commission's Decision will be published on the following website:

http://ec.europa.eu/energy/en/topics/markets-and-consumers/wholesale-market/access-infrastructure-and-exemptions

 

IP/16/3562

Press contacts:

General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email


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