Baltic Energy Market Interconnection Plan GRIP 2017

2.5 Legal Framework Development

Natural gas markets and systems of the BEMIP region countries are regulated by their respective legal acts on natural gas and energy. All the countries of the BEMIP region have implemented Directive 2009/73/EC of the European Parliament of the Council of 13 July 2009 concerning common rules for the internal market in natural gas except Finland. In accordance with Directive 2009/73/EC, Denmark, Sweden, Estonia, Latvia, Lith- uania and Poland have deregulated their natural gas markets, including the unbundling of TSO from vertically integrated sales companies. The six countries (Denmark, Estonia, Latvia, Lithuania, Poland and Sweden) have implemented a number of EU network codes (e. g. balancing rules, interoperability, capacity book- ing and allocation methodology for transmission capacity) and are working on imple- menting the codes that have recently came into force. The directive also allows deviations from the regulations concerning the deregulation of the natural gas market for countries with only one principal supplier of natural gas. Finland has used this exemption so far, but has taking actions to deregulate their natural gas markets and systems. In Finland, a new Natural Gas Market Act is expected to enter into force in the first part of 2018. The new act will introduce structural changes to the gas market even in cases where Finland continues to use the exemption of the directive, but at the same time the proposed structural chang- es remain compatible with the requirements of the directive in case the exemption is not used anymore. At the beginning of 2016, the Latvian Parliament adopted amendments to the Energy Law, providing for full ownership unbundling of the vertically integrated JSC “Latvijas Gaze”, which resulted in the establishment of two sister companies by spinning-off gas transmission and storage business areas in accordance with the provisions of Gas Directive 2009/73/EC by the end of 2017. As of 3 April 2017, the gas market in Latvia is officially opened. In the BEMIP region, there are plans for setting up regional gas markets and balanc- ing zones. For example, Denmark and Sweden are working on a joint balancing model and the Baltic countries, together with Finland, are planning on setting up a regional gas market with a single entry-exit zone. If these plans materialise, it is expected that national laws will have to be changed in order to comply with harmo- nised market rules and tariffs in the region. Furthermore, Finland, Estonia, Latvia, Lithuania are composing joint plans in accordance with the Regulation (EU) No 994/2010 of the European Parliament and of the Council of 20 October 2010 concerning measures to safeguard security of gas supply and repealing Council Directive 2004/67/EC. In 2012, Estonia, Latvia and Lithuania carried out a joint risk assessment (JRA) of security of gas supply. JRA was prepared by Focus Group on Regional Cooperation composed of representatives of the Competent Authorities, the national regulatory authorities and transmission system operators of the countries and the European Commission. In 2016, EC JRC completed an updated version of the JRA and work is being done on Joint Preventive Action Plans (JPAP) and Joint Emergency Plans (JEP). Also, in 2013 representatives of the Republic of Finland joined the Focus Group on Regional Cooperation. As after construction of Balticconnector, Finland will be part of the joint gas supply system and it was agreed by the members of the group that Finland should be included in JPAP.

BEMIP Gas Regional Investment Plan 2017 |

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