ENTSOG Annual Report 2016

President’s Foreword

In 2016 ENTSOG was well on its way to successfully completing its work on the development of Network Codes, by nearing the finalisation of the Network Code on Tariffs as well as the update of the Network Code on Capacity Alloca- tion Mechanism, which includes new rules for incremental capacity as a core element. By early 2017, the implementa- tion and effect monitoring stage of the network codes’ life- cycle has commenced. One important event in the last year that will influence the prospective work of the gas TSO business was the start the process for the “Quo Vadis EU gas market regulatory frame- work – a study on a Gas Market Design for Europe” by the European Commission. At the time this Annual Report is published the work on this study will be ongoing and I want to take the opportunity to contribute with some ENTSOG viewpoints. There are a number of elements that need to be considered in the future gas market design. There is a need for a high- er level of interaction between electricity and gas markets. This increased level of interaction will need to be assessed to ensure that the future gas market is able to respond to the requirements of the energy sector as a whole, which means from today’s perspective higher gas system load flexibility

and most probably also further investments into capacities and innovation. There will be a need for cooperation and optimisation between the various parts of the energy sector, such as the heating sector with an efficient balance between gas and electricity usage and the transport sector with an increasing use of gas fired vehicles and ships. The interac- tion between the various parts of the energy sector should be considered in meeting the EU climate targets. Gas mar- ket design should enable the transfer of energy across such sectors. Any proposal also needs to consider the development and application of new technologies. The gas market design needs to accommodate the potential development and utilisation of power-to-gas as well as the increasing produc- tion of, and demand for, renewable gases. The market design should provide flexibility in how to encourage such development. At ENTSOG we are looking forward to participate and contribute to these important discussions. We will be challenged as gas TSOs – but it is my firm belief that the gas transmissions systems of Europe have a lot offer for the energy transition and that we will continue to play an impor- tant role in this transition, now and in the future.

The gas market design needs to accommodate the potential development and utilisation of power-to-gas as well as the increasing production of, and demand for, renewable gases.

STEPHAN KAMPHUES President, ENTSOG

ENTSOG Annual Report 2016 |

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