Commission staff working document - Accompanying document to the Proposal for a Regulation of the European Parliament and of the Council concerning measures to safeguard security of gas supply and repealing Directive 2004/67/EC - Assessment report of directive 2004/67/EC on security of gas supply {COM(2009) 363}
Date: 2009-07-16
Institutions: European Commission
Subjects: energy industry, gas, gas supply, harmonisation of standards, natural gas, report, safety standard, security of supply

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 16.7.2009 
SEC(2009) 978 final 

COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

concerning measures to safeguard security of gas supply  
and repealing Directive 2004/67/EC 

ASSESSMENT REPORT OF DIRECTIVE 2004/67/EC  
ON SECURITY OF GAS SUPPLY 

{COM(2009) 363} 

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TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

4.1. 

4.2. 

Introduction .................................................................................................................. 4 

Transposition of the Directive 2004/67/EC ................................................................. 5 

Major Supply Disruption (Art. 2(1))............................................................................ 6 

Roles and responsibilities (Art.3)................................................................................. 8 

The overall responsibility............................................................................................. 8 

Specific roles and responsibilities................................................................................ 8 

4.2.1.  The Ministry................................................................................................................. 8 

4.2.2.  Regulator ...................................................................................................................... 9 

4.2.3.  Transmission System Operator (TSO) ....................................................................... 10 

4.2.4.  Distribution System Operator (DSO)......................................................................... 11 

4.2.5.  Underground Gas Storage Operator (UGSO) ............................................................ 11 

4.2.6.  LNG System Operator (LSO) .................................................................................... 12 

4.2.7.  Suppliers..................................................................................................................... 12 

4.3. 

Conclusions – differences in the security of gas supply roles of market players ...... 12 

5. 

5.1. 

5.2. 

Security of supply standards (Art.3/4) ....................................................................... 14 

Security of gas supply standards (for households)..................................................... 14 

Extension of scope of the security of supply standards to other gas customers ........ 19 

5.2.1.  Guaranteed supplies for SMEs and for non-fuel switch customers ........................... 19 

5.2.2.  Gas for electricity....................................................................................................... 20 

6. 

6.1. 

6.2. 

6.3. 

6.4. 

6.5. 

6.6. 

6.7. 

6.8. 

6.9. 

Security of gas supply instruments (Annex of 2004/67)............................................ 21 

Gas Storage Facilities................................................................................................. 22 

Production flexibility ................................................................................................. 26 

Long-term supply contracts (Art. 2(1))...................................................................... 27 

Import flexibility ........................................................................................................ 29 

Interruptible contracts, fuel-switch possibility........................................................... 30 

Cooperation of System Operators .............................................................................. 31 

Cross-border capacities .............................................................................................. 33 

Diversification of gas supplies ................................................................................... 35 

Investment support ..................................................................................................... 35 

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6.10. 

Liquid tradable gas markets ....................................................................................... 38 

6.11.  Other instruments identified and used by Member States ......................................... 39 

6.11.1.  Long term planning .................................................................................................... 39 

6.11.2.  Public Service Obligations......................................................................................... 40 

6.12.  General Conclusions .................................................................................................. 41 

7. 

8. 

9. 

9.1. 

9.2. 

9.3. 

10. 

Gas Coordination Group (Art.7) ................................................................................ 43 

Community three step approach................................................................................. 46 

National emergency measures (Art.8)........................................................................ 48 

Gas emergency scale .................................................................................................. 49 

Definition of crisis situations in gas supply ............................................................... 50 

Emergency measures used by Member States ........................................................... 51 

Monitoring and reporting (Art. 5/6) ........................................................................... 53 

10.1.  Reporting to the Commission..................................................................................... 53 

10.2.  Monitoring of security of gas supply ......................................................................... 54 

ANNEX 1: Distribution of responsibility for security of gas supply in Member States ......... 57 

ANNEX 2: Member States definition of parameters for security of supply standards............ 58 

ANNEX 3: Member States use of security of gas supply instruments .................................... 59 

ANNEX 4: Fuel switch possibility and interruptible contracts................................................ 61 

ANNEX 5: The role of gas in EU and Member States ............................................................ 62 

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1. 

INTRODUCTION 

Dynamic  gas  market  development  increased  the  importance  of  security  of  gas  supply.  The 
European Union has created an internal gas market. In order to strengthen the security of gas 
supply in the internal market the Council Directive 2004/67/EC of 26 April 2004 concerning 
measures  to  safeguard  security  of  natural  gas  supplies  (thereafter  referred  to  as  "the 
Directive") was adopted. This Directive is consecutive to in the internal gas market Directive 
2003/55/EC1.  

Objective  of  the  Directive  as  stipulated  in  Recital  19  pursues  two  main  goals,  namely  "… 
ensuring an adequate level for the security of gas supply, in particular in the event of a major 
supply disruption," and "contributing to the proper functioning of the internal gas market…" 

As  provided  for  in  the  Directive,  the  Commission  shall  present  in  2008  to  the  European 
Parliament and to the Council the evaluation report on the implementation of the Directive by 
Member States. The presentation of this report has been delayed in order to follow the timing 
of the Second Strategic Energy Review. 

The Report shall analyse the effectiveness of instruments put in place by Member States, the 
effects of security of gas supply instruments on the internal gas market, as well as their effect 
on the development of competition on the internal gas market. 

The Directive  in  particular  underlines  the importance of defining the role and  responsibility 
for  market  players.  Member  States  shall  define  roles  and  responsibilities  in  the  area  of 
security of gas supply.  

The  Directive  also  defines  the  minimal  security  of  supply  standards,  which  determine  the 
conditions, during which the gas supply for households' customers shall be maintained. Scope 
of  these  standards  may  be  broadened  by  extending  the  affected  customers  to  Small  and 
Medium  Enterprises,  to  customers  who  cannot  switch  gas  to  other  fuel  and  to  significant 
power generators from gas.  

The  Directive  also  increases  the  scope  of  the  reporting  obligations  for  security  of  supply 
purposes  for  the  internal  gas  market  by  Member  States,  and  requires  the  monitoring  of  the 
security of gas supply issues by the Commission.  

A Gas Coordination Group was established according the Directive. Its role is to facilitate the 
coordination of security of gas supply measures, to provide a forum for discussions between 
the  Member  States  and  the  source  of  information  for  the  industry  about  the  security  of  gas 
supply  in  Europe.  The  important  role  of  this  group  was  confirmed  during  the  gas  supply 
problems in the course of last three years. The Gas Coordination Group was convened seven 
times for extraordinary meetings.  

1 

Directive  2003/55/EC  of  the  European  Parliament  and  of  the  Council  of  26  June  2003  concerning 
common  rules  for  the  internal  market  in  natural  gas  and  repealing  Directive  98/30/EC  (OJ  L  176, 
15.7.2003, p. 57–78) 

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2. 

TRANSPOSITION OF THE DIRECTIVE 2004/67/EC 

Member  States  had  to  communicate  to  the  Commission  the  texts  of  national  legislations 
transposing  the  Directive  and  the  correlation  tables  between  such  legislation  and  the 
provisions  of  the  Directive  by  19.05.2006.  Member  States  had  to  communicate  to  the 
Commission also their national emergency measures.  

Transposing provisions 

The provisions transposing the Directive have been communicated to the Commission by 26 
Member  States.  Two  countries  (Malta  and  Cyprus)  are  exempted  from  application  of  this 
Directive,  because  they  are  not  using  gas  in  their  energy  mix;  nevertheless  Malta  had 
transposed the Directive into its national legislation.  

5  Member  States  did  not  communicate  their  transposing  provisions  in  time.  For  3  Member 
States (Ireland, Luxembourg and Romania) infringement procedures for non-communication 
had  been  opened  in  2006  and  closed  in  2007-2008  after  they  notified  the  related  national 
legislation to the Commission.  

Most of the MS have transposed the security of gas supply provisions of the Directive as part 
of  their  internal  gas  market  legislation,  ensuring  the  coherence  between  internal  gas  market 
and security of gas supply objectives.  

Correlation table  

Article 10 (1) of the Directive obliged Member States to communicate to the Commission the 
correlation  table  between  the  provisions  of  the  national  legislation  and  the  Directive.  13 
Member States did not communicate the correlation table in time. Two Member States (Latvia 
and Luxembourg) are still missing. 

This  obligation  has  shown  also  a  problem  of  inconsistency  of  correlation  table  with  the 
transposing provisions of the national legislation. The provisions of the national legislations 
described  by  some  Member  States  in  the  correlation  table  were  not  identical  with  the  ones, 
which transpose the Directive.  

National emergency measures 

According  to  Article  8  Member  States  shall  prepare  in  advance  their  national  emergency 
measures. They should be published and notified to the Commission.  

Member  States  implemented  their  national  emergency  measures  in  two  steps:  first,  they 
obliged  different  market  players  to  develop  the  national  emergency  measures,  and  after  this 
step, the market players have developed the national emergency measures. This approach has 
created  a  time  delay,  due  to  which  the  Member  States  were  not  able  to  communicate  the 
national  emergency  measures  to  the  Commission  in  time.  Only  2  Member  States 
communicated  the  national  emergency  measures  on  time,  9  Member  States  communicated 
such measures to the Commission before the end of 2007, and 19 Member States in total have 
done so far. 

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3. 

MAJOR SUPPLY DISRUPTION (ART. 2(1)) 

Major  Supply  Disruption  (referred  to  as  "MSD")  is  defined  in  Article  2  paragraph  2  as  a 
situation where the Community would risk to lose more than 20 % of its gas supply from third 
countries and the  situation  at  Community level is not  likely to be adequately managed with 
national measures." 

Recital  17  stipulates  the  foreseeable  length  of  "Major  Supply  Disruption"  to  "a  significant 
period of time of at least eight weeks". This Directive should provide rules applicable in the 
event of a major supply disruption; In  case  of a gas supply  disruption from 3rd countries, it 
assess extent and impact of the gas supply disruption, and gives right to the Commission to 
apply rules as defined in Article 9 of the Directive.  

Recital  15  and  Article  9  facilitate  a  coordination  mechanism  to  deal  with  major  supply 
disruption  at  Community  level,  giving  the  Commission  the  possibility  to  convene  a  special 
meeting of Gas Coordination Group related to the particular gas supply disruption. Recital 15 
also suggests further roles of Gas Coordination Group in case of major supply disruption:  

•  may assist Member States in coordinating measures taken at a national level,  

•  should exchange information on security of gas supply on a regular basis, and  

•  should consider aspects relevant in the context of a major supply disruption.  

The  guidance  how  to  handle  major  supply  disruption  is  in  Recital  18.  It  describes  a 
mechanism based on a three step approach, applying rules from Article 9. The first step would 
involve  the  reactions  of  the  industry  to  the  supply  disruption;  if  this  were  not  sufficient, 
Member  States  should  take  measures  to  solve  the  supply  disruption.  Only  if  the  measures 
taken at stage one and two have failed should appropriate measures be taken at Community 
level. 

The directive currently defines a major supply disruption  as  the  loss  of  20%  of  gas  imports 
from  third  countries  to  the  Community  for  at  least  8  weeks.  It  has  been  accepted  that  this 
indicator  is  very  high  and  already  shortfalls  that  do  not  reach  this  level  might  require 
Community  response.  Comparing  to  the  January  2009  crisis,  disruption  of  28%  lasted  14 
days.  With  the  increasing  import  dependency,  it  becomes  more  and  more  unlikely  that  this 
indicator is reached before Community action is needed. 

On the other hand, the likely risk of reaching the MSD indicator is defined in Article 9(1) as a 
trigger  to  activate  measures  at  Community  level.  But  in  reality,  20%  of  Community  gas 
import from 3rd countries is a volume equivalent to half of Russia or all Norway or all Algeria 
gas  imported  to  EU.  The  volume  of  gas  import  is  increasing,  as  gas  production  in  EU  is 
declining. Thus also 20% threshold will correspond to higher volumes of gas.  

But there is also another possibility to trigger the Community measures. Any Member State 
can request to the Commission to activate the Community mechanism if it considers that the 
shortfall  of  its  gas  supplies  cannot  be  managed  adequately  at  national  level,  even  if  the 
shortfall does not reach the MSD. 

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The  definition  of  "Major  Supply  Disruption"  was  also  discussed  in  the  Gas  Coordination 
Group. The Group concluded that with the accession of the new Member States in 2004 and 
2007, the 20% disruption  from  the  third countries is very high and already smaller delivery 
disruptions  may  require  Community  response,  especially  if  this  delivery  disruption  affects 
more than one Member State.  

Conclusions 

Gas  supply  disruptions  in  EU  have  occurred  on  several  occasions  (the  most  significant  in 
January 2006 and 2009 with respect to gas supplies from Russia through Ukraine). The 20% 
threshold of gas supply disruption from 3rd countries was reached in 2009, but lasted "only" 
14 days, not 8 weeks. Member States suffered significant gas reduction, which created a base 
to  convene  at  least  3  extraordinary  meetings  of  the  Gas  Coordination  Group  in  2009.  The 
definition  of  major  supply  disruption  as  defined  in  the  present  Directive  it  is  now  is  not 
appropriate to ensure its role as a trigger for actions at the Community level. It was proved in 
particular during the events in January 2009 that the 20% of gas supply disruption from 3rd 
countries is too high, especially after the accession of the EU-12 countries.  

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4. 

ROLES AND RESPONSIBILITIES (ART.3) 

Article 3(1) of the Directive stipulates: "In establishing their general policies with respect to 
ensuring adequate levels of security of gas supply, Member States shall define the roles and 
responsibilities of the different gas market players in achieving these policies, […]."  

The importance of defining the clear role and responsibility of market players is stipulated in 
Recital  3:  "Definition  of  clear  roles  and  responsibilities  of  all  market  players  is  therefore 
crucial  in  safeguarding  security  of  gas  supply  and  the  well-functioning  of  the  internal 
market." 

Market  player  should  be  "the  one  who  actively  operates  on  the  market".  However,  for  the 
purpose of this Directive, the definition of market players includes all entities - not only those 
who  operate  actively  on  the  market,  but  also  those  who  create  the  legal  framework  (the 
Ministry,  the  Government)  and  who  supervises  the  gas  market  (the  regulator).  Roles  of  the 
Ministry  and  the  regulator  for  security  of  gas  supply  are  also  specified  in  the  national 
legislation of Member States.  

4.1. 

The overall responsibility  

Member  States  set  the  overall  responsibility  to  guarantee  the  secure  gas  supplies  at  the 
country level, as well as specific responsibilities for the suppliers, Ministries and regulators. 

However, the main role of security of gas supply for Transmission System Operators (TSOs), 
Distribution  System  Operators  (DSOs),  LNG  System  Operators  (LSOs),  and  Underground 
Gas Storage System Operators (UGSOs) is very similar in most Member States.  

Different market players in Member States were designated to have the central responsibility 
to ensure the security of gas supply. This so called "overall responsibility" is always defined 
in the national legislation.  

Belgium,  Bulgaria,  France,  Italy,  Lithuania,  Luxembourg,  Poland,  Portugal,  Slovakia,  and 
Spain  identified  the  relevant  Ministry  as  the  responsible  body  to  guarantee  the  overall 
security of gas supply for the country. This role is given to the TSO in the Czech Republic, 
Estonia, Denmark, the Netherlands, to the regulator in Ireland, Finland, Malta and Sweden, 
to the suppliers in Germany, Hungary, Latvia, and Slovenia, and to a special Coordination 
commission in Romania. Greece has stated in its legislation that both the Ministry and the 
regulator are responsible for the security of gas supply. In the UK, the overall responsibility 
to  ensure  the  security  of  supply  is  a  joint  responsibility  between  the  Ministry  (Secretary  of 
State)  and  the  Regulator  (Gas  and  Electricity  Markets  Authority).  In  Austria  the  overall 
responsibility for security of gas supply is shared between the Ministry, Regulator and the so 
called "Control Area Manager". 

4.2. 

Specific roles and responsibilities  

4.2.1.  The Ministry 

In  general,  the  Ministry  for  Energy  defines  the  legal  framework  for  energy  markets.  In 
Austria,  Belgium,  Bulgaria,  France,  Italy,  Latvia,  Lithuania,  Luxembourg,  Poland,  Portugal, 
Slovakia, and Spain, the Ministry takes the overall responsibility to guarantee the security of 

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gas supply in the country. Greece and UK defines the joint overall responsibility for both the 
Ministry  and  the  regulator.  Romania  defines  a  special  Coordination  commission 
established by the Government.  

In other Member States (Austria, Estonia, Finland, Czech Republic, Malta, the Netherlands, 
Portugal and Sweden) the Ministry has a security of gas supply role. The Ministry in Bulgaria, 
Lithuania,  Slovakia,  Slovenia  and  Spain  monitor  the  security  of  gas  supply,  as  well  as  a 
coordinating  commission  in  Romania.  In  Germany  and  Lithuania  the  Ministry  prepares  the 
internal  market  report,  while  the  Slovak  Ministry  prepares  only  the  part  related  to  the 
security of supply. The Polish Ministry prepares the security of supply report, which includes 
the  internal  market  report.  The  Secretary  of  State  in  UK  has  duty  to  report  annually  to  UK 
Parliament  on  gas  and  electricity  supplies.  Energy  Market  Outlook  Report  discharges  this 
duty.  

The  planning  of  the  gas  network  is  worked  out  by  the  Bulgarian  and  Spanish  Government. 
The Estonian and Finnish Government supervise and approve the construction of cross-border 
gas pipelines.  

In Austria, the Netherlands and Portugal, the Ministry prepares measures for very difficult 
circumstances, as well as measures to prevent the natural gas supply disruption. The Ministry 
takes action, if the system is endangered or breaks down. In Bulgaria, Portugal and Slovakia, 
the Ministry declares the emergency situation after the advice from TSO. 

In Malta, the Ministry instructs the regulator to ensure the security of gas supply. In Bulgaria 
and Malta, the Ministry shall define the minimum security of natural gas supply standards.  

4.2.2.  Regulator 

The regulators in Finland, Ireland and Sweden have the overall responsibility to guarantee 
the  security  of  gas  supply.  In  Ireland,  overall  energy  policy  is  formulated  by  the  Ministry, 
while statutory responsibility for monitoring and ensuring security of gas supply rests with the 
Regulator,  including ensuring security of supply  for  non  daily  metered  customers  and  those 
without  the  ability  to  fuel  switch.  In  Finland,  the  regulator  supervises  the  legal  provisions, 
monitors gas supply-demand balance, as well as quality and maintenance of gas network, and 
handles with any deficiency in gas supply. The regulator in Malta should be instructed by the 
Ministry to ensure the security of supply and to define security of gas supply standards and 
national measures.  

A  close  cooperation  between  ministry  and  regulator  is  applied  in  Austria  and  Greece.  The 
regulator  prepares  recommendations,  but  the  final  decision  is  taken  by  the  ministry.  The 
regulator only monitors and controls the security of gas supply. In Austria the regulator also 
prepares and coordinates measures, defined in the „Manual to prevent gas crisis”. It includes 
data collection for energy steering measures and practice of emergency actions and measures. 
However, the overall responsibility is given to the ministry. In Greece the regulator examines 
and assesses appropriate measures and makes recommendations for the ministry. The overall 
responsibility is shared both by the ministry and by the regulator.  

The  regulator  in  Bulgaria,  Germany,  Hungary  and  Poland  monitors  the  security  of  gas 
supply.  The  regulator  in  Bulgaria  controls  also  the  compliance  with  rules  for  natural  gas 
supply,  as  well  as  the  quality  of  services´  standards.  In  Germany  the  regulator  issues 

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obligations  on  security  of  gas  supplies  and  exemptions  for  specific  situation,  and  is 
responsible for security of supply, if security of supply is endangered.  

Reporting to the Commission: an obligation of the regulators 

Most of the regulators prepare national reports on the internal energy market. Article 5 of the 
Directive  2003/55/EC2  on  internal  gas  market  requires  from  Member  States  to  prepare  the 
reports  on  the  functioning  of  internal  gas  markets  and  their  communication  to  the 
Commission.  Article  5  of  the  Directive  2004/67/EC  on  the  security  of  gas  supply  requires 
additional  security  of  gas  supply  information  to  be  provided  to  the  Commission  in  these 
reports.  

4.2.3.  Transmission System Operator (TSO) 

Stable and secure functioning of the gas transmission networks operated by the TSOs is 
the  main  task  set  by  Member  States  to  Transmission  Gas  System  Operators.  In  most  of  the 
Member  States  this  goes  hand  in  hands  with  the  responsibility  to  ensure  the  stable  and 
reliable gas supplies and the gas quality supplied through the networks.  

Other  tasks  for  TSOs  include  the  management  of  the  country's  gas  system,  long-term 
planning,  ensure  the  gas  supply  in  case  of  emergency  and  the  development  of  the  gas 
transmission networks. TSO in eight Member States (Bulgaria, Denmark, Czech Republic, 
Estonia, the Netherlands and Portugal) manages and ensures the stable and secure functioning 
and  development  of  the  gas  system  at  the  country  level.  In  Finland  the  TSOs  have  the 
technical responsibility for the gas system, but the regulator by controlling and managing the 
network is responsible to secure the gas supply in the country.  

In  five  Member  States  (Czech  Republic,  Greece,  Ireland,  the  Netherlands,  Slovakia),  the 
TSOs prepare an emergency plan and have to send it for approval to the overall responsible 
body (regulator or Ministry).  

In  the  Czech  Republic  the  TSO  announces  the  emergency  level  of  national  gas  network 
(including transit), if gas supply  disruption  occurs. The  Czech TSO also  manages  the entire 
national  gas  network  in  case  of  emergency.  In  UK  the  TSO  has  also  a  role  of  a  network 
emergency  coordinator  (NEC),  and  coordinates  the  entire  network  in  case  of  emergency.  In 
Denmark,  Germany  and  France,  the  TSO  ensures  the  gas  supply,  if  supplier  is  not  able  to 
ensure it. For this purpose, the TSO in Denmark owns the gas storage facility. In Sweden, if 
TSO is not able to supply gas, the ISO orders to reduce the gas supply to specific customers.  

In 13 Member States (Bulgaria, Denmark, Estonia, Spain, France, Greece, Hungary, Italy, the 
Netherlands, Portugal, Slovenia, Sweden, Finland), the TSO makes long term planning of the 
entire gas network.  

Cooperation between market players 

Cooperation  between  TSOs  in  neighbouring  countries,  and  cooperation  between  TSO  and 
DSO are defined in the Annex of the Directive as instruments to enhance the security of gas 
supply. However, this instrument is specified in the legislation of only few Member States. In 
five  Member  States  (Denmark,  Hungary,  Poland,  Finland  and  Spain),  the  TSOs  shall 
cooperate with other system operators to secure the gas supply. All TSOs in Germany have to 
cooperate  with  each  other.  TSOs  in  Estonia  have  to  cooperate  with  system  operators  in 

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neighbouring countries. TSOs in Slovenia have to provide sufficient transport capacities and 
cooperation with other TSOs and DSOs in case of emergency. In Estonia, all market players 
are  also  so  called  "balance  providers",  providing  necessary  balance  information  for  system 
operators. 

Dispatch services  

In four Member States (Czech Republic, Slovakia, Romania, Bulgaria), the TSOs established 
a dispatch centre for the gas transit network to provide the technical management and to 
balance  the  gas  system.  In  Austria  the  same  service  is  provided  by  the  independent  market 
players,  so  called  "Control  Area  Manager".  National  Grid's  System  Control  Centre 
continuously  monitors  and  controls  the  UK  gas  network.  In  five  other  Member  States 
(Denmark, Italy, Latvia, Spain and Sweden), the TSO directly provides the dispatch services.  

4.2.4.  Distribution System Operator (DSO)  

Stable  and  secure  functioning  of  the  gas  distribution  network  is  the  main  task  of 
Distribution  System  Operators  (DSO)  in  all  Member  States.  In  many  Member  States,  the 
DSOs are also responsible to ensure the stable and reliable gas supplies and the quality of the 
supplied gas.  

DSOs  in  3  Member  States  (Czech  Republic,  Slovakia,  and  Greece)  shall  supply  the  gas  to 
households  during  the  emergency  stage  or  during  the  gas  supply  disruption.  In  14  Member 
States  (Bulgaria,  Estonia,  Denmark,  Slovakia,  Germany,  Hungary,  Latvia,  France,  Portugal, 
Romania,  Sweden,  Slovenia,  Spain,  and  Finland),  the  gas  distribution  network  shall  be 
developed in accordance with the gas consumption forecasts. In 6 Member States (Bulgaria, 
Slovakia, Czech Republic, the Netherlands, Hungary, Greece), the DSOs have to prepare the 
emergency plans for their territory to cope with technical failures and sudden disruptions. 

Cooperation between DSOs and other market players in case of emergency situation 

In 7 Member States (Denmark, Finland, Germany, Portugal, Poland, Spain and Slovenia), the 
DSOs  shall  according  to  the  national  legislation  cooperate  with  other  market  players  all 
the time, in particular with LNG operators and gas storage operators connected to their 
distribution and transmission networks.  

In  three  other  Member  States  (Czech  Republic,  Slovakia,  and  Bulgaria),  the  DSOs  have  to 
establish  the  technical  control/dispatch  centre  for  the  distribution  network.  The  dispatch 
centre  shall  control  interconnected  distribution  networks  during  the  emergency  situation,  or 
prevent the situation to go to that level.  

4.2.5.  Underground Gas Storage Operator (UGSO)  

Stable and secure functioning of the gas storage is the main task of Underground gas storage 
Operators (UGSOs) in nearly all Member States. UGSOs ensure the reliability of gas supply 
and maintain the quality of supplied gas. Slovenia and Denmark did not define the security of 
supply role for underground gas storage operators, although both countries use the gas stocks 
as a measure for security of gas supply. Slovenia has no storage facilities on its territory but 
stores gas in neighbouring countries (Austria, Croatia). 

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UGSOs in 6 Member States (Czech Republic, France, Italy, Romania, Slovakia, and Hungary) 
ensure the emergency supply to the gas network during the emergency situation. In the Czech 
Republic, the UGSOs have to establish a gas storage dispatch centre. The UGSOs in Slovakia 
develop  the  emergency  plans  for  underground  gas  storages.  In  8  Member  States  (Finland, 
Slovakia, Italy, the Netherlands, Portugal, Spain, Latvia, Denmark), the UGSOs propose the 
Development plan for underground gas storages. 

4.2.6.  LNG System Operator (LSO)  

System Operators are responsible also for stable and secure functioning of the LNG facilities 
and LNG storage facilities in 18 Member States. The use of LNG by system operators is not 
specifically  defined  in  8  Member  States  (Slovenia,  Slovakia,  Czech  Republic,  Bulgaria, 
Luxembourg, Hungary, Romania, and Latvia).  

In Poland and the Netherlands, the LSOs guarantee the reliability of gas supply and maintain 
the quality of gas from LNG. In Denmark and Portugal, the LSOs manage their activities with 
the  linked  system  operators.  In  Denmark  and  the  Netherlands,  the  LSOs  prepare  the 
Development plans for LNG.  

4.2.7. 

Suppliers 

Infour Member States (France, Germany, Hungary, and Slovenia), the gas suppliers (defined 
as holders of a supply licence) have the overall responsibility to deliver the gas to their final 
customers.  In  13  Member  States  (Belgium,  Czech  Republic,  Finland,  Greece,  Italy,  Latvia, 
Lithuania, Luxembourg, the Netherlands, Poland, Portugal, Romania, Slovakia, and UK), the 
gas suppliers have the obligation to deliver the gas, but overall responsibility for security of 
gas supply is set to other market players (Ministries or TSOs).  

In  the  Netherlands  and  France,  the  gas  suppliers  ensure  the  gas  supply  also  in  difficult 
circumstances,  during  which  they  are  obliged  to  deliver  the  gas  to  their  customers.  In 
Luxembourg and Portugal, the suppliers guarantee the gas supplies to households. In Portugal 
and Italy, the suppliers maintain the minimum security gas stocks defined as a share of their 
supplies. In France, the gas suppliers make a 5 years planning forecast. In the Czech Republic, 
all suppliers are obliged by law to guarantee the security of supply standards and stable gas 
supply. In Hungary and UK, the suppliers´ licence means also an obligation to supply gas.  

In UK, the system operator requires the gas supplier to contribute to the security of gas supply 
and ensure that the industry can safely isolate and reconnect the end users in case of supply 
disruption. Some Member States also define the suppliers of last resort, who are responsible 
to supply the final customers under the specific conditions.  

Conclusions – differences in the security of gas supply roles of market players 

Member  States  have  defined  the  roles  for  their  market  players  in  a  different  way,  which 
created a distortion for security of gas supply at the European internal gas markets. The big 
difference in roles and responsibilities underlines the actual difference of national markets. At 
the same time it may mean a difference in the burden on market players which might distort 
competition.  There  are  some  common  patterns  for  most  (or  nearly  all)  Member  States.  The 
main roles given to TSOs, DSOs, LSOs and UGSOs are very similar at the level of Member 
States.  Most  of  the  roles  of  market  players  are  specified  only  for  their  activity  within  the 
national  gas  markets.  Only  few  market  players  have  mentioned  specifically  in  the  national 

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legislation  the  obligation  to  cooperate  with  other  countries´  market  players  (e.g.  TSO  in 
Estonia).  This  "national  only  support"  contributes  to  the  fragmentation  of  the  internal  gas 
market. 

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5. 

SECURITY OF SUPPLY STANDARDS (ART.3/4) 

The Article 3(1) of the Directive set the obligation for Member States to "…specify adequate 
minimum security of supply standards that must be complied with by the players on the gas 
market of the Member State in question".  

The  same  paragraph  also  defines  how  to  apply  these  standards.  "The  standards  shall  be 
implemented in a non-discriminatory and transparent way and shall be published." 

5.1. 

Security of gas supply standards (for households) 

The Directive defines the security of supply standards. Households are the only category of 
gas  customers,  where  the  Directive  requires  the  Member  States  to  ensure  the  gas 
supplies under specified conditions and inside their territory.  

Important role of security of gas supply standards for households is stipulated in Recital 5 of 
the Directive: "In view of the growing gas market in the Community, it is important that the 
security of gas supply is maintained, in particular as regards household customers."  

"Security of gas supply standards" defines the Article 4(1) of the Directive: "Member States 
shall ensure that supplies for household customers inside their territory are protected to an 
appropriate extent at least in the event of:  

(a) A partial disruption of national gas supplies during a period to be determined by Member 
States taking into account national circumstances; 

(b) Extremely cold temperatures during a nationally determined peak period; 

(c) Periods of exceptionally high gas demand during the coldest weather periods statistically 
occurring every 20 years. 

Security of gas supply standards are defined as critical conditions, at which the secured and 
reliable  gas  supply  shall  be  still  guaranteed  for  households.  These  standards  create  a  set  of 
operational conditions to be fulfilled, which have the essential impact on gas supplies (e.g. 
no gas disruption, or normal winter).  

Seasonality of gas demand implies two indicators – for the strong winter gas demand, and 
for the strong daily peak demand. The third indicator refers to the volume of the gas supply 
disruption.  

From  the  principal  point,  these  three  security  of  gas  supply  standards  are  correctly  defined, 
because they describe the variability of gas demand in Member States in the basic form.  

However,  the  Member  States  were  given  a  wide  discretion  to  specify  the  details  and  the 
protected customers of these standards. They have the possibility to define the volume and 
the duration of partial gas supply disruption and the duration of peak periods of increased gas 
demand. The variability of implementation of security of supply standards related to national 
circumstances in Member States is described in Annex 2. 

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Two  of  these  standards  take  into  account  climate  conditions.  They  are  related  to  seasonal 
variability of gas demand, because gas is used in many Member States as a primary heating 
fuel  during  winter.  In  the  winter  period,  the  gas  demand  is  higher  by  around  20-30  %,  in 
comparison  to  the  average  annual  gas  demand.  For  some  Member  States  (e.g.  France, 
Germany,  UK)  the  difference  between  summer  and winter gas demands is more than 100% 
(double gas demand in winter than in summer).  

Gas  is  also  used  for  power  generation,  which  multiplies  the  security  of  supply  concern  for 
both gas and electricity. Electricity has also higher demand in winter. Electricity demand for 
air conditioning during summer in southern Europe, increases the annual demand and leaves 
less time to prepare for the next winter period (for example to fill the gas stocks for the next 
winter).  

The  summer-winter  difference  of  gas  demand  shows  the  variability  on  an  annual  basis  for 
many national gas markets. For Member States, which use the gas for heating and electricity 
generation, this difference is a precondition for definition of their security of supply standards 
and  national  emergency  measures.  The  partial  gas  disruption  is  more  critical  in  winter, 
because  of  the  increased  gas  supply  during  this  period.  This  also  describes  the  clear  link 
between  the  gas  supply  disruption  and  the  weather  conditions,  both  defined  by  security  of 
supply standards.  

Gas consumption variability per MS

500000

450000

400000
TJ
350000

300000

250000

200000

150000

100000

50000

0

Austria

Belgium

Bulgaria

Czech Republic

Denmark

Estonia

Finland

France

Germany 

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg 

Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sw eden

Jan-07

Mar-07

May-07

Jul-07

Sep-07

Nov-07

Jan-08

Mar-08

May-08

Jul-08

Sep-08

Nov-08

Jan-09

Mar-09

United Kingdom

a)  Partial  disruption  of  national  gas  supplies  during  a  period  determined  by  Member 
States taking into account national circumstances 

The “partial disruption” is not defined in the Directive. Some Member States were inspired by 
the  definition  of  “major  supply  disruption”  (Article  2(2)  of  the  Directive),  but  both 
"disruptions"  differ  in  purpose.  The  partial  disruption  describes  a  disruption  at  MS  level, 
while the MSD is set for at EU level.  

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Four  Member  States  (Malta,  Ireland,  Bulgaria,  and  Luxemburg)  have  so  far  only  set  the 
obligation  to  define  the  security  of  supply  standards,  but  the  standards  have  not  been 
communicated to the Commission yet. 

Some  Member  States  (Czech  Republic,  Estonia,  Malta,  Slovenia,  and  Romania)  define  the 
partial disruption as a 20% gas supply disruption in the country, and Slovakia as of 30%. 
The  time  duration  for  partial  disruption  ranges  from  2  weeks  (Slovenia)  to  10  weeks 
(Slovakia).  

Finland,  France  and  Lithuania  define  the  partial  disruption  as  a  disruption  of  one  supplier 
for the period of 4-6 months (according to the diversification, the disruption of one supplier 
for  Finland  and  Lithuania  represents  100%  of  their  gas  supply,  but  for  France  it  represents 
only around 20-30% of gas supply).  

Some Member  States, instead of defining the standards, impose mandatory gas  stocks and 
mandatory  use  of  gas  from  gas  stocks  for  households  (Hungary  -  45  days  of  gas  demand, 
Poland - 30 days of gas import, Portugal – 15-20 days of gas demand).  

Spain defines security of supply standards in a different way. Partial disruption is defined as a 
disruption  of  one  entry  point  to  the  gas  network  by  the  "N-1  vulnerability  criteria".  The 
remaining  entry  capacity  must  be  big  enough  to  ensure  the  100%  gas  demand  of  a  normal 
winter  day  and  at  least  90%  of  all  CCGT  (gas  turbines)  power  plants  consumption.  This 
measure is combined with the mandatory gas stocks of 20 days of gas consumption.  

In  addition,  2  Member  States  (Bulgaria,  Estonia)  set  a  period  of  technical  gas  disruption, 
which lasts 2-3 days.  

If there is a partial disruption of certain share of gas imported by pipelines, it may influence 
gas  supply  not  only  in  one  country,  but  two  or  more  countries  on  a  pipeline  chain.  Real 
experience  shows  that  the  countries  along  one  gas  pipeline  (like  Brotherhood,  Yamal, 
Western  Balkans,  as  well  as  Finland  and  Baltic  Countries)  are  affected  simultaneously  in  a 
similar way, only differentiated by the level of ability of the previous country in the chain to 
mitigate the supply  disruption.  Gas  supply disruption on the Brotherhood pipeline in winter 
2006  showed  the  following  disruption  pattern  as  reported  by  MS  in  the  Gas  Coordination 
Group: Slovakia (20%), Hungary (30%), Austria (20%), Czech Republic (20%), Italy (15%), 
Poland (10%), Germany (6%) and France (gas pressure drop). In 2009, both Brotherhood and 
Western Balkan pipelines were empty for 14 days. 

Seasonal variability standards 

b) Extremely cold temperatures during a nationally determined peak period  

Nationally determined peak period defines the duration  of extreme cold temperatures event. 
Member  States  are  given  the  flexibility  to  set  this  duration.  However,  the  duration  of  peak 
winter event shows similar patterns within climate regions. Therefore, differences in the peak 
duration in neighbouring countries within the affected area are not justified. The difference in 
determination of the peak period duration by Member States is described in Annex 2. 

According the statistical data, the lowest average annual temperatures - annual peak periods 
- occur in the same time in calendar in every winter.  

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The  extreme  cold  temperature  event  does  not  necessarily  occur  during  the  annual  peak 
period.  According  the  statistical  data,  these  extreme  peak  periods  occurred  only  3  times 
during last 50 years in Europe - in February 1956, December 1962 and in January 1985. For 
example  in  January  1985,  the  temperature  quickly dropped by 15-20°C to -20°C and -30°C 
and  rested  at  these  very  low  temperatures  for  couple  of  days.  Heating  demand  during  these 
days  was  extremely  high.  This  event  is  usually  defined  by  industry  and  in  some  national 
legislation as a 1-in-50 rule and describes the ability of gas network to supply extreme high 
volumes of gas during a short period of time - extreme peak demands. Member States can not 
predict when this 1-in-50 event will happen again.  

This  event  describes  how  much  gas  could  be  delivered  by  the  network  during  certain  time 
period (e.g. Nm3 per one hour or one day). 

c)  Periods  of  exceptionally  high  gas  demand  during  the  coldest  weather  periods 
statistically occurring every 20 years 

The period of exceptionally high winter demand (1-in-20 rule) is the coldest winter period, 
which statistically occurs every 20 years. Gas demand during this winter period is higher than 
during the normal winter period. This defines the ability of gas network to be able to supply 
the higher gas volumes during the all winter period's time.  

For  example,  all  system  operators  in  Spain  have  to  prepare  the  operational  plans  for  every 
winter  by  the  end  of  October,  and  send  them  to  the  TSO.  These  plans  predict  winter  gas 
consumption.  Entry  Capacity  to  the  Spanish  Gas  Systems  must  be  sufficient  to  ensure  the 
annual peak gas demand plus all the gas turbines power plants' (CCGT) consumption (1-in-
50),  and  plus  10%  of  over-capacity  to  guarantee  the  gas  demand  in  case  of  annual  peak 
demand increases more rapidly than foreseen in several years (1-in-20). 

High  share  of  gas  is  used  for  heating  purposes.  Gas  consumption  increases,  when  the 
temperature drops. This is referred to as seasonal variability determines the annual demand 
for  heating.  It  depends  on  daily  temperatures  (described  by  heating  degree  days).  Seasonal 
variability of gas demand is covered by the security of gas supply standards.  

Heating Degree Days in EU-27

1000

°
D

900

800

700

600

500

400

300

200

100

0
01-2005

07-2005

01-2006

07-2006

01-2007

07-2007

01-2008

07-2008

01-2009

Austria

Belgium

Bulgaria

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg

Malta

Netherlands

Poland

Portugal

Romania

Slovak Republic

Slovenia

Spain

Sweden

United Kingdom  

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Heating degree days based on the Eurostat methodology are calculated by the Joint Research 
Centre (JRC IPSC/Agrifish Unit/MARS-STAT) at regional (NUTS 2), national and European 
levels. Heating degree days express the severity of cold temperatures in a specific time period, 
taking  into  account  the  outdoor  temperature  and  the  room  temperature.  To  establish  a 
common  and  comparable  basis,  Eurostat  uses  the  following  method  to  calculate  heating 
degree days:  

D°= (18 °C - Tm) x d ………if 

Tm ≤ 15 °C (heating threshold)  

D° = 0 ……………..  if 

Tm > 15 °C  

Where Tm = ((Tmin + Tmax)/ 2) - outdoor temperature over a period of d days.  

The heating demand differs amongst Member States. Neighbouring countries and countries of 
one region show a similar pattern. Finland has the highest heating degree days, and therefore 
the  highest  demand  for  heating.  Sweden  follows  the  similar  pattern  with  lower  values.  The 
three  Baltic  States  are  very  close  to  each  other.  Countries  with  the  lowest  degree  days  are 
Malta, Cyprus, and Portugal.  

Winter comparison

2004-2005

2005-2006

2006-2007

6000

5000

4000

3000

°
D

2000

1000

0

Malta

Cyprus

Portugal

Greece

Bulgaria

Spain

Italy
Romania

France

Netherlands
Ireland

Hungary
Luxembourg
United Kingdom
Belgium

Slovenia

Germany

Slovak Republic
Czech Republic
Denmark
Lithuania
Austria
Poland

Latvia

Estonia

Sweden

Finland

The winter 2006-7 was the mildest winter in Europe ever. It had the lowest heating demand 
for most Member States, but not for Bulgaria, Romania, Cyprus and Greece. The average gas 
demand was about 2% lower than the nominal winter gas demand.  

Cooling  degree  days  are  used  to  calculate  demand  for  cooling,  especially  with  regard  to 
electricity generation and cooling in Southern European countries in summer.  

Conclusions 

Member  States  have  set  very  heterogeneous  security  of  supply  standards.  The  partial 
disruption differs in duration ranging from 2 days to 24 weeks and in volume (20%-30%, 1 
supplier).  In  some  Member  States,  the  definition  of  standards  has  not  been  done.  These 
differences may create a barrier to solidarity mechanism and to the finalisation of internal gas 
market.  Some  sort  of  standardisation  is  desirable,  at  least  for  regions  or  along  the  same 

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pipeline.  Also  in  order  to  avoid  different  burden  on  market  players,  hence  least  distort 
competition. 

The  standard  "Extremely  cold  temperatures  during  a  nationally  determined  peak 
period"  is  giving  the  flexibility  to  Member  States  for  the  areas,  where  the  same  situation 
happens  in  most  of  the  Member  States  in  very  similar  way.  Correlation  of  this  standard  at 
least  on  regional  level  is  appreciated.  Transposition  is  not  very  clear  and  sometimes  the 
standards are difficult  to  recognise.  The standards are defined  in  a  very general way,  which 
downgrades  their  importance  for  security  of  gas  supply.  Adequate  implementation  of  the 
security  of  supply  standards  is  essential  to  create  a  proper  and  well  correlated  framework. 
Member States took into account their national circumstances, but this created a variation of 
implemented standards to such extent, that the standards are incomparable.  

5.2. 

Extension of scope of the security of supply standards to other gas customers  

Article  4(2)  of  the  directive  allows  extending  the  scope  "…  in  particular  to  small  and 
medium-sized  enterprises  and  other  customers  that  cannot  switch  their  gas  consumption  to 
other energy sources, including measures for the security of their national electricity system if 
it depends on gas supplies."  

5.2.1.  Guaranteed supplies for SMEs and for non-fuel switch customers 

Member  States  may  choose  and  protect  other  vulnerable  gas  customers  –  SMEs  and 
customers  they  can  not  switch  fuel.  Eight  Member  States  have  extended  the  scope  of  the 
protection beyond households.  

Two  Member  States  (Ireland,  Malta)  have  taken  the  opportunity  and  guaranteed  the  gas 
supply  for  SMEs.  Three  Member  States  (Czech  Republic,  the  Netherlands,  and  Portugal) 
extended the coverage of security of gas supply standards to all small customers consuming 
less than 100.000 (PT), 170.000 (NL), or 400.000 (CZ) cubic metres per year. 

UK  has  an  intermediate  category  of  non-domestic  "priority  gas  consumers"  (e.g.  boarding 
schools),  which  includes  the  issue  of  safety  (if  the  life/health  were  at  risk).  They  would 
continue  to  receive  gas  supplies  for  as  long  as  possible  without  jeopardising  supplies  to 
households.  

Romania  extended  the  scope  of  guaranteed  gas  supplies  to  medical  services  institutions, 
education  units,  social  assistance  institutions  for  children,  for  elder  persons,  or  for  persons 
with various degrees of handicap, as well as to public institutions at central and local level, 
cultural and religious institutions and nongovernmental institutions of public interest. 

Further gas customers, which could be covered by the security of gas supply standards, are the 
customers, who have not the fuel switch possibility and depend uniquely on gas fuel. These 
customers  are  covered  by  the  security  of  supply  standards  in  Czech  Republic,  Hungary, 
Ireland, Malta, and Poland. In Estonia the non-fuel switch customers covered by security of 
supply standards are limited to heat producers for households and in Romania to all heating 
producers.  

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5.2.2.  Gas for electricity  

The  Directive  gives  the  possibility  to  extend  the  security  of  supply  standards  to  electricity 
production  from  gas  fired  power  plants,  if  this  production  is  significant  in  a  Member  State. 
Member States did not use this possibility.  

It needs further examination if alternative security of supply measures exist (like fuel switch 
obligation,  compulsory  stockpiling  of  alternative  fuel  or  excess  non  gas-fired  electricity 
generation  capacities)  in  those  countries,  where  gas-fired  power  generation  is  predominant 
and no gas security of supply obligations are foreseen.  

Conclusions for extended scope of significant gas consumers 

Only few Member States use the possibility given by the Directive to include significant gas 
consumers  in  terms  of  SMEs,  non-fuel  switch  possibility  and  of  power  generation.  The 
importance of these categories is set by Member States itself.  

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6. 

SECURITY OF GAS SUPPLY INSTRUMENTS (ANNEX OF 2004/67) 

The  Annex  of  the  Directive  presents  the  non-exhaustive  list  of  instruments,  which  should 
enhance the security of gas supply, as referred to in Article 3(3) and 4(3). 

Instruments mentioned in the Annex consist of: 

•  working gas in storage capacity, and withdrawal capacity in gas storage, 

•  provision of pipeline capacity enabling diversion of gas supplies to affected areas, 

•  liquid tradable gas markets,  

•  system flexibility,  

•  development of interruptible demand, 

•  use of alternative back-up fuels in industrial and power generation plants, 

•  cross-border capacities,  

•  cooperation  between  transmission  system  operators  of  neighbouring  Member  States  for 

coordinated dispatching, 

•  coordinated dispatching activities between distribution and transmission system operators,  

•  domestic production of gas and production flexibility,  

•  import flexibility,  

•  long term contracts,  

•  diversification of sources of gas supply,  

•  investments in infrastructure for gas import via regasification terminals and pipelines. 

Recital 6 to the Directive includes another instrument, which could be used for security of gas 
supply:  "A  large  choice  of  instruments  is  available  for  the  industry  and,  if  appropriate,  for 
Member  States,  to  comply  with  the  security  of  supply  obligations.  Bilateral  agreements 
between  Member  States  could  be  one  of  the  means  to  contribute  to  the  achievement  of  the 
minimum  security  of  supply  standards,  having  due  regard  to  the  Treaty  and  secondary 
legislation, in particular Article 3(2) of Directive 2003/55/EC."  

Annex of the Directive does not provide any further specifications or details of the suggested 
instruments, their importance, and any relation between them, their impact on the security of 
gas supply or any preferences towards a particular measure.  

In this chapter, the similar or related instruments from Annex are put together, and their role 
for the security of supply, as well as their utilisation by Member States, is shortly described.  

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In general, all mentioned instruments in the Annex of the Directive are used for security of 
gas supply purposes in Member States. The different structure of national gas markets is the 
prerequisite between the uses of instruments as emergency measures.  

6.1. 

Gas Storage Facilities 

Gas  storage  is  one  of  the  most  used  instruments  for  security  of  gas  supply  by  Member 
States.  This  is  the  only  instrument,  which  is  specifically  addressed  in  the  Directive.  19 
Member  States  have  together  around  100  bcm  of  gas  storage  capacity,  which  represents 
14% of EU annual gas consumption.  

There are 4 types of gas storages used in Europe: 3 underground types - salt cavities, aquifers, 
and empty gas reservoirs, and 1 type on surface - LNG storage type, usually used for "Peak 
shaving". LNG storage does not require any specific geology; it can be built in every Member 
State.  

Development of underground gas storage depends on geological conditions. Underground gas 
storage is used in all Member States, who have the geological conditions. 21 Member States 
use gas storage as an instrument to increase security of gas supply. Two of them store gas 
only in other countries.  

Article  4(4)  gives  Member  States  the  possibility  to  use  the  gas  storage  facilities  "in  an 
appropriate  degree"  to  achieve  the  security  of  supply  standards.  This  gives  the  freedom  to 
choose,  if  the  gas  storage  will  contribute  to  their  security  of  gas  supply.  Member  States, 
having  due  regard  to  the  geological  conditions  of  their  territory  and  the  economic  and 
technical  feasibility,  may  also  take  the  necessary  measures  to  ensure  that  gas  storage 
facilities  located  within  their  territory  contribute  to  an  appropriate  degree  to  achieving  the 
security of supply standards. 

According  to  the  Directive  (Article  4(5)  and  Recital  13),  gas  storage  facilities  create  a 
possibility  to  develop  solidarity  between  Member  States  in  case  of  gas  supply  reduction. 
Provided  that  adequate  interconnection  is  available,  Member  States  may,  in  line  with  the 
bilateral agreements, take appropriate measures to utilise the gas storage located within other 
Member  State  for  security  of  supply  purposes.  Such  measure  shall  not  impede  the  proper 
functioning of the internal gas market.  

Although the Directive does not mandate any gas storage targets, it puts a strong emphasis on 
this instrument. It is the only instrument facilitating security of supply, to which the Directive 
refers to greater extent in its operative part (Recital 7 and Article 4(4) to 4(6)). The Directive 
suggests that indicative minimum targets for gas storage could be set by Member States or by 
the  industry.  Those  indicative  targets,  if  set,  should  not  create  any  additional  investment 
obligations.  If  such  minimum  storage  targets  are  imposed,  the  Directive  requires  their 
publication for transparency reasons.  

Despite  the  "soft"  approach  in  the  Directive,  the  gas  storage  requirements  have  spread  well 
around Europe. In some Member States this measure is mandatory.  

The Directive creates a possibility for Member States to store the gas outside their territory. 
This also means that interconnection capacity between the two countries concerned shall be 
available  to  use  the  gas  storage,  when  it  is  needed.  Utilisation  of  Latvian  gas  storage 

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22 

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Incukalns  by  all  Baltic  countries  is  an  example  of  such  solidarity  cooperation  within  the 
whole region. 

Gas storage in Member States 

Legislation 

Some Member States set an obligation to the supplier to store the gas. Mandatory levels of gas 
stocks for supplier were set in Poland (30 days of average daily import), Spain (20 days of 
consumption – 10 days as strategic, and 10 days as commercial storage), and for stockpiling 
association in Hungary (45 days). In Portugal the mandatory gas stocks are at least 15 days 
of the average consumption of non-interruptible gas for electricity producers and 20 days of 
other non-interruptible customers including households.  

France adopted different approach, where at the beginning of winter the gas storage has to be 
filled  to  at  least  85%  of  its  capacity.  In  Bulgaria,  the  level  of  stocks  is  defined  by  market 
players  themselves.  In  Romania,  the  suppliers  maintain  the  gas  stocks,  but  their  levels  are 
defined  annually  by  the  regulator  according  the  predictions  of  gas  consumption,  weather 
forecasts and level of existing storage capacity.  

Czech  Republic,  France,  Italy,  Portugal,  Romania,  and  Slovakia  have  obliged  UGSOs  to 
ensure the emergency supply during the emergency situation.  

In  the  German  legislation  is  written  that  the  storage  volume  in  Germany  could  last  for  80 
days, but if suppliers use gas storage, there is no storage volume required. 

Suppliers in Italy are obliged to keep gas stocks of 10% of the annual imported gas volume. 
Italy has very strong legislation for gas storage. It defines various types of winter according 
the gas demand. It also defines the strategic gas stocks and their use, if there is a real strong 
winter and not enough gas to cover the country's gas demand. It also set the exact time period 
for gas injection and gas withdrawal.  

Gas storage facilities used to enhance the security of gas supply 

Gas demand fluctuations vary over time, across years, seasons, weeks and days. Gas storage 
is the primary measure to meet these fluctuations. 

The  Directive  describes  gas  storage  use  by  two  indicators  –  working  gas  capacity  and 
withdrawal capacity. Working gas capacity describes the maximum gas volume, which could 
be withdrawn from the gas storage at the nominal parameters to the gas system, representing 
also the difference between total gas storage capacity and cushion gas capacity (gas used to 
operate the gas storage).  

Withdrawal capacity of gas from storage describes the rate at which gas could be taken out 
from gas storage for a certain period of time. In other words how quickly gas can be taken out 
from the storage. This represents the deliverability of gas storage, or the volume a gas, which 
could be injected into the gas system from the storage over a certain time period. 

Combination of both parameters describes the time period, during which the gas storage could 
supply the gas to the network.  

EN 

23 

   EN 

 
Strategic  gas  stocks  refer  to  the  stockpiling  of  natural  gas  which  is  destined  to  be  used 
exclusively  in  emergency  situations,  hence  inaccessible  under  normal  market  conditions. 
Stockpiling of natural gas is expensive: the cost per unit of energy is much higher than for oil 
(approximately 16.7 MEUR per PJ, compared to 3.33 of oil2). Geological conditions may also 
limit in certain areas the development of gas storage facilities.  

Member  States  have  different  levels  of  exposure  to  risks  and  hence  different  gas  supply 
security  requirements.  A  country  with  a  diversified  gas  import  or  high  share  of  own 
production, good level of interconnections with neighbours, developed market and high fuel-
switching possibilities (high share of industry or power generation consumption) may be less 
exposed  to  risks  and  may  develop  less  expensive  measures  than  strategic  stocks  to  deal 
efficiently with supply shortages.  

However, it needs to be recognised that strategic stocks might be the preferable or only mid-
term  solution,  particularly  for  countries  with  single-source  dependence  and  high  share  of 
uninterruptible  demand.  If  a  Member  State  chooses  the  strategic  gas  stocks  as  a  national 
measure, the use of strategic stocks has to be carefully regulated to avoid market distortions: 
strategic stocks should not be released in non crisis situations to influence the value of storage 
and other flexibility instruments that are developed under competitive market conditions. 

Different types of gas storage 

LNG  storage  (Peak  Shaving)  -  is  used  when  high  deliverability  is  required  with  a  small 
working volume. This storage is reserved for a few extremely cold winter days. Subsequent 
refilling of LNG tanks may take a half-year or longer. Storage of gas in liquid form is very 
expensive  compared  to  the  storage  of  the  same  volume  of  gas  in  underground  storage.  A 
typical  LNG  storage  would  have  a  volume  of  50  Mm3,  an  output  duration  of  100  hours,  a 
storage cost of 0.4 €/m3/y and a deliverability cost of 40 €/m3/y3. LNG storage facilities are 
used because of their high send out capacity, making them ideally suited to cover the extreme 
winter peaks. On other hand the LNG Storage facility is expensive to maintain. 

Gas  salt  caverns  are  facilities  created  in  salt  layers.  They  have  less  working  volume  than 
depleted field storage facilities and are mainly used for peak supply. A typical send out period 
is 10-30 days. Generally, a gas cavern facility consists of a number of individual salt caverns, 
each with a working volume of 30-70 million cubic meters and a send out capacity of about 2-
4  million  m3/day.  Gas  caverns  are  used  to  cover  the  coldest  days.  Due  to  their  small  scale, 
cavern storage facilities require less investment and can be built in stages, one after the other, 
with limited incremental costs for each new cavern. 

Depleted oil or gas fields and aquifer storage facilities are mainly used for summer-winter 
seasonal balancing. They have large working volumes (typically 2.5 bcm) but relatively little 
output  capacity.  They  are  filled  in  the  summer  over  the  curse  of  typically  six  months  and 
emptied in the winter over a period of two-three months.  

Utilisation of gas storage  

2 
3 

Study on natural gas storage in the EU, European Commission DG Tren, October 2008 
Study on Interoperabiliy of LNG facilities and Interchangeability of gas and advice on the Opportunity to set up an Action Plan 
for the Promotion of LNG Chain Investments , MVV, 2008 

EN 

24 

   EN 

 
                                                 
Utilisation of gas storage facilities is different in Europe (see graphs below). 

Gas storage usage per MS

January crisis 

200000

150000

100000

50000

J
T

0

-50000

-100000

09-2006

12-2006

03-2007

06-2007

09-2007

12-2007

03-2008

06-2008

09-2008

12-2008

03-2009

Austria

Belgium

Bulgaria

Czech Republic

Denmark

Estonia

Finland

France

Germany 

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg 

Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sw eden

United Kingdom

These two graphs show the use of gas storage in Member States. Italy, Germany and France 
use the gas storage as main tool to cover the seasonality of gas demand. Most countries show 
similar use of gas storage - gas withdrawal in winter and gas injection in summer. It indicates 
that  security  of  gas  supply  depends  very  much  on  gas  storage  in  these  countries  during  the 
winter  period.  Especially  in  Italy,  where  the  supply - demand  balance  is  very  tight.  The 
dependency  on  storage  and  its  flexibility  was  clearly  demonstrated  in  January  2009,  where 
most MS doubled the gas supply from their storages in comparison to January 2008. 

Flexibility of gas storage per MS

January crisis 

70000

60000

50000

40000

30000

20000
J
T

10000

0

-10000

-20000

-30000

Austria

Bulgaria

Czech Republic

Denmark

Hungary

Latvia

Poland

Slovakia

Spain

United Kingdom

Belgium

01-2006

05-2006

09-2006

01-2007

05-2007

09-2007

01-2008

05-2008

09-2008

01-2009

EN 

25 

   EN 

 
 
 
This is the same graph as above, but in a different scale. It shows the similar winter-summer 
patterns of the utilisation of gas storage facilities for other Member States.  

Some  Member  States  have  no  gas  storage  on  their  territory  (Slovenia,  Estonia,  Finland, 
Sweden,  and  Luxembourg).  Slovenia  and  Estonia  are  storing  gas  in  neighbouring  countries 
for their own security of supply purposes. Greece stores gas in a LNG terminal, but only to 
balance the demand/supply of the system, and not for security of supply purposes.  

Economic and technical feasibility of gas storage  

Cost  Comparison  of  Storage  Costs  by 
Working Volume  

Cost  Comparison  of  Storage  Costs  by 
Deliverability 

Source: Study on Interoperabiliy of LNG facilities and Interchangeability of gas and advice on the Opportunity 
to set up an Action Plan for the Promotion of LNG Chain Investments, DG TREN, 2008 

Conclusions 

The significance of gas storage for security of supply purposes is clearly highlighted by the 
use of this measure in all Member States where it is possible 

Development  of  commercial  storages  should  be  encouraged.  Beyond  their  role  in  balancing 
and  price  hedging,  they  can  enhance  market  liquidity  and  thus  increase  security  of  supply. 
While  preparing  the  in-depth  analysis  of  the  measures  described  in  chapter  3.1,  the 
Commission  shall  examine  whether  the  current  development  of  commercial  storage  is 
sufficient  and  whether  other  options  on  storage  are  necessary  to  support  the  Community 
action,  such  as  for  example  the  development  of  EU  Community  strategic  stocks  or  other 
measures to promote investment in commercial storage. 

6.2. 

Production flexibility 

Production flexibility is used only in Member States with gas production, in particular gas 
export  countries  (The  Netherlands,  UK  and  Denmark).  They  have  enough  gas  reserves  to 
develop the flexibility of gas production, which contributes significantly to their security of 
gas supply. Production flexibility is also one of the instruments indicated in the Annex of the 
Directive. 

The Netherlands as a gas producer has developed a very flexible gas production from its gas 
fields  (especially  Groningen),  which  are  used  in  similar  winter-summer  patterns  as  the  gas 
storage in other Member States.  

EN 

26 

   EN 

 
 
 
450000

400000

350000

300000

250000

200000

150000

100000

50000

J
T

EU gas production flexibility

Mild winter

Austria

Bulgaria

Czech Republic

Denmark

France

Germany 

Greece

Hungary

Ireland

Italy

Netherlands

Poland

Romania

Slovakia

Spain

United Kingdom

0
Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Similar pattern is also shown in the UK, however during the last two years the gas production 
has fallen, negatively influencing the UK production flexibility as an instrument for security 
of gas supply.  

Other  significant  producing  countries  like  Germany,  Italy,  Romania,  and  Denmark  also  use 
their production flexibility to cover (partly) the seasonality of gas demands. In Germany, the 
production flexibility is not as important as storage or import flexibilities.  

Production flexibility decreases with the decline of gas production in EU. Affected Member 
States have to find an alternative. Denmark and the Netherlands are planning their gas future 
with the reality in domestic production.  

6.3. 

Long-term supply contracts (Art. 2(1))  

Article 2(1) defines for the purpose of this Directive long-term gas supply contract as "… a 
gas supply contract with a duration of more than 10 years."  

The significance of long-term supply contracts in European gas market is stipulated in Recital 
11  "Long-term  contracts  have  played  a  very  important  role  in  securing  gas  supplies  for 
Europe and will continue to do so. The current level of long term contracts is adequate on the 
Community  level,  and  it  is  believed  that  such  contracts  will  continue  to  make  a  significant 
contribution to overall gas supplies as companies continue to include such contracts in their 
overall supply portfolio." 

Definition of long-term supply contracts as of the Directive is used by eight Member States 
(Germany, Latvia, Malta, Poland, Portugal, Romania, Slovakia, and Slovenia). Hungary has 
set the time duration of the contract to 5-10 years. Other Member States use the term "long-
term contract" in their legislation, but without definition. Long-term contracts are used both in 
LNG  and  pipeline  gas,  however  for  LNG  the  usual  length  of  contract  is  shorter  as  for  the 
pipelines.  

EN 

27 

   EN 

 
 
Long-term contracts are also included in the Annex as an instrument to increase the security 
of gas supplies. Many Member States use long-term contracts to ensure the gas supplies for a 
certain  period  in  longer  time  frame  (usually  5-20  years).  During  the  last  three  years  most 
Member States importing gas from Russia prolonged their long-term contracts to another 10 
to  20  years.  Long-term  contracts  may  also  influence  the  gas  supply  forecasts  to  the  market, 
showing the amount of gas, which is contracted for the future, and which will be available for 
the market.  

The impact of long-term contracts on the internal market is twofold. The positive side is the 
increase of gas supply stability to the market, and at least some guarantee for a longer period 
that the gas will come to the market. The negative side of the use of long-term contracts is if 
the volumes of transport capacity are only contracted but not used, which may foreclose the 
market to other suppliers. Usually higher than normal consumption volumes of gas supplies 
with  some  flexibility  are  prescribed  in  contracts  for  longer  periods  (e.g.  month)  ,  due  to 
ensuring the gas supply during an exceptionally strong winter or other unpredictable events.  

Further  disadvantage  is  that  existing  long-term  supply  contracts  between  producers  and 
dominant player in the market could lead to barriers to entry by new players into the market 
and potentially could restrict the development of liquid trading hubs. 

Most  of  the  long-term  contracts  are  "take-or-pay"  type.  The  importer  is  obliged  to  pay  for 
contracted but  not actually delivered  volumes of gas. Lithuania and Luxembourg defined in 
their legislation "take-or-pay contracts" but without specific time frame. 

The chart below shows the evolution of long-term gas supply contracts (2007 contract level), 
comparing the baseline gas demand scenario. The level of long-term gas supply contracts has 
increasing  tendency,  and  since  1995  the  volume  of  gas  contracted  with  the  long-term  gas 
supply  contracts  has  been  higher  than  the  actual  gas  consumption  in  EU-27.  This  trend 
continues and the current long-term contracts are of higher volume than the forecast of 2010 
gas consumption in the baseline scenario (without any reductions in alternative scenarios, e.g. 
RES, energy efficiency, or 20-20-20 scenarios). 

Long  term  supply  contracts  for  Europe  divided  to  pipeline  and  LNG,  vs.  the  baseline 
scenario.  

EN 

28 

   EN 

 
700

600

500

400

300

200

100

m
c
b

0

1990

EU-27 LT contracts and demand - total

1995

2000

2005

2010

2015

2020

2025

Pipeline

LNG indigenous Supply

baseline supply

700

600

500

400

300

200

100

0

2030

Source: Gas Strategies and PRIMES 2005 

Comparing the available transport capacities to contracted volumes could adjust the real flows 
and real volumes in a pipeline system. It also enables to define the free available capacity, and 
adjust the ratio between the contracted and imported volumes, as well as the ratio between the 
long  term  contract  deliveries  and  spot  deliveries.  According  to  the  LNG  study,  the  ratio 
between  spot  market  and  long  term  market  in  LNG  market  shifts  towards  the  spot  market, 
however the long-term contracts will still prevail.  

6.4. 

Import flexibility 

Import  flexibility  is  an  important  instrument  also  included  in  the  Annex.  Import  flexibility 
means  the  ability  of  gas  supplier  to  periodically  increase  or  decrease  the  gas  imports  to  the 
most appropriate volumes.  

LNG is particularly important for the short term flexibility. Main elements contribute to this 
flexibility: the possibility of LNG transport ships to be docked in different ports where it is 
mostly  needed,  and  any  additional  spot  LNG  ship  can  bring  additional  gas  to  desired 
destination,  if  it  is  needed.  LNG  terminals  are  utilised  in  less  than  50%  of  their  projected 
annual capacity in the EU.  

Pipelines  flexibility  is  the  possibility  to  divert  the  gas  to  other  pipelines  if  there  are  more 
pipelines connected to the market. This also increases the diversification of gas routes, which 
means also the diversification of sources. Actual available capacity and the ability to increase 
or decrease the gas volumes in a very short time are important parameters for pipelines. Both 
pipelines and spot LNG cover the seasonal variation of gas demand. The seasonal flexibility 
of imported gas volumes is included in the import contracts.  

Gas  storage  can  be  the  most  preferable  measure  during  the  short  term  disruption,  as  it  is 
located  closer  to  the  markets  or  along  the  pipelines  route.  Additional  gas  from  external 

EN 

29 

   EN 

 
 
producers  could  be  only  delivered  within  significant  time  delay  depending  on  the  distance 
from the field (1-10 days) or from extra LNG cargo.  

EU gas import

400000

350000

300000

250000

200000

150000

100000

50000

J
T

0
01-2007 04-2007 07-2007 10-2007 01-2008 04-2008 07-2008 10-2008 01-2009

Austria

Belgium

Bulgaria

Czech Republic

Denmark

Estonia

Finland

France

Germany 

Greece

Hungary

Ireland

Italy

Latvia

Lithuania

Luxembourg 

Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sw eden

United Kingdom

6.5. 

Interruptible contracts, fuel-switch possibility  

Interruptible  contracts  enable  to  cut-off  the  gas  customers  under  specific  circumstances 
(e.g. gas supply disruption), but in the same time, they can not have any negative impact on 
customers. These contracts are used in industry and power generation, where the gas is not the 
main/important  fuel  of  industrial  production,  or  industry  constructed  or  maintains  the 
alternative fuel stocks.  

Some  countries  have  also  introduced  voluntary  interruptible  contracts  with  industry.  Gas 
supplies  are  cut  off  above  certain  price  levels.  This  practice  is  adopted  only  by  the  largest 
market players in France, Germany, and UK and depends on daily gas prices.  

Interruptible  contracts  are  used  by  industry  also  in  combination  with  the  fuel  switch 
possibility (e.g. power generation). Support for interruptible contracts is given in Italy through 
the  legislation  creating  the  incentives  for  additional  interruptibility  by  extra  fee.  This  fee 
depends on the time period during the day in a winter season.  

Romania  introduced  a  voluntary  interruptible  contracts  used  by  so  called  "interruptible 
customers"  with  only  limitation  to  the  security  of  supply  for  household  consumers  in  the 
situations represented by the security of supply standards. Interruptible customer has minimal 
gas consumption 30,000 m3/h in winter and could be cut-off for 24 hours without affecting its 
technical security. 

EN 

30 

   EN 

 
 
According  to  the  European  Gas  Flexibility  Report  20074,  which  analysed  interruptible 
contracts in 14 Member States, the present use of interruptible contracts is about 14 bcm of 
industry gas consumption and 25 bcm of power generation in 2005. It represents about 7% of 
the annual gas demand of these 14 Member States. According this report, the trend in Europe 
is  to  reduce  the  proportion  of  interruptible  gas,  because  of  environmental  constraints  of 
alternative fuel, and because of declining ability to maintain the backup oil systems. 

Fuel switch possibility is introduced by important gas customers. In case of gas disruption, 
company could switch from gas to another fuel and follow operation. As for gas the most used 
alternative fuel is light fuel oil.  

This  is  used  by  power  producers,  which  have  to  maintain  other  fuel  stocks,  or  have  some 
stocks  already  constructed  (e.g.  older  gas  power  plants  with  fuel  oil  as  a  backup  fuel).  For 
example in Bulgaria, gas fired power generation plant has to maintain 5 days of liquid stocks. 

The  Commission  asked  the  Member  States  about  their  possibility  to  switch  fuel,  if  a  gas 
supply disruption occurs. This instrument is used in a very different way by Member States. 
With regard to the share of gas consumption, Finland has 90% possibility to switch from gas 
to  another  fuel,  Sweden  30-40%,  6  other  Member  States  (Belgium,  Denmark,  France, 
Germany,  Ireland,  Italy,  Lithuania,  Slovenia)  between  6-18%,  3  Member  States  (Austria, 
Poland, Slovakia, have not any fuel switch possibility and 6 MS (Bulgaria, Czech Republic, 
Luxembourg,  the  Netherlands,  Portugal,  Spain)  have  not  such  information.  Other  2  MS 
(Greece, and Latvia) did not reply yet. The detailed results are in Annex 4. 

6.6. 

Cooperation of System Operators 

Coordinated dispatching activities between DSO and TSO 

The  coordination  of  various  system  operators  is  defined  in  the  national  legislation.  The 
coordination  of  the  dispatching  activities  an  obligation  for  Czech,  Slovak  and  Bulgarian 
TSOs, through the establishment of dispatch centres for the gas transit network. Austria and 
Estonia created independent market players, called regional zone rulers or balance providers. 
Apart from different name, the main role of all these bodies is the technical management and 
balancing of the gas system. Spanish TSOs are directly responsible for technical management 
of  the  network  to  ensure  the  proper  coordination.  Denmark,  Poland,  Slovenia  and  Finland 
TSOs  shall  cooperate  with  other  system  operators  to  secure  the  gas  supply.  In  Germany  all 
TSOs have to cooperate.  

Cooperation between transmission system operators of neighbouring Member States  

In  case  of  a  gas  supply  disruption,  Transmission  System  Operators  should  cooperate. 
Regional  approach  allows  different  levels  of  market  development  to  be  taken  into  account 
with  the  common  goal  of  realising  the  single  market.  Bilateral  and  multilateral  projects  for 
improving  cross-border  integration  have  been  set  up,  such  as  the  Regional  Initiatives  of 
ERGEG,  government  cooperation  within  the  Pentalateral  Forum  in  North  West  Europe  and 
MIBEL/MIGAS  for  the  Iberian  countries.  Unlike  other  initiatives,  the  Energy  Community 
increases regional cooperation on a legally binding basis. These projects play a useful role in 
the development of best practices.  

4 

European Gas Flexibility Report, Global Insight, 2007 

EN 

31 

   EN 

 
                                                 
Gas regional Initiative (GRI) 

On 25 April 2006, ERGEG launched a Gas Regional Initiative (GRI), made up of three gas 
Regional Energy Markets (REMs). Focusing on more cooperation and harmonisation at cross-
border  issues,  each  regional  gas  market  has  defined  the  priority  actions  in  the  areas  of 
Balancing  markets  and  quality,  transparency,  interconnections  of  primary  capacity  and 
secondary capacity markets, hubs indicating the market liquidity, investments and regulatory 
coordination.  The  Regional  Initiative  Groups  consists  of  the  Regional  Co-ordination 
Committee, together with the Implementation and Stakeholder Groups. A Lead Regulator has 
been appointed for each REM to chair and co-ordinate work within the region.  

Overall aim of Gas Regional Initiative is to push forward at a practical level, the development 
of  regional  gas  markets  in  collaboration  with  industry,  Member  States,  the  European 
Commission  and  other  stakeholders.  At  the  regional  level,  the  gas  REMs  tackle  barriers  to 
competition,  such  as  the  lack  of  market  integration,  transparency  and  balancing  issues, 
highlighted in DG Competition’s energy sector inquiry.  

North-West regional gas market participating countries are Netherlands, Belgium, France, 
Ireland,  Great  Britain,  Germany,  Denmark,  Sweden,  and  Northern  Ireland.  Norway  is  an 
observer. The main priorities are transparency and capacity interconnections for cross-border 
trade.  

South South-East regional gas market participating countries are Austria, Bulgaria, Czech 
Republic, Greece, Hungary, Italy, Poland, Romania, Slovakia and Slovenia. The South South-
East  (SSE)  REM  is  co-chaired  by  E-Control  (Austria)  and  AEEG  (Italy).  This  region 
contributes  significantly  to  the  security  of  energy  supply  in  the  UE  since  nearly  half  of  the 
European  transit  capacities  are  transported  through  the  countries  of  the  South-South  East 
Region. Monitoring the proper implementation of the European gas regulation, the survey and 
analysis of the regional market and its problems, as well as transparency and interoperability 
issues are the main priorities.  

The South regional gas market is led by the Spanish Energy Commission (CNE) and aims 
to  integrate  Portugal,  Southern  France  and  Spain  into  one  gas  regional  market.  The  South 
REM contributes to both the European security of energy supply and diversification of energy 
sources. It is one of the main entries for the natural gas coming from the north of Africa, and 
for the LNG coming from a variety of origins. Interconnection capacity, interoperability and 
transparency issues are the three key priorities.  

Pentalateral Energy Forum 

Estonia 

Storage 

Latvia 

gathers  Governments, 

The  energy  cooperation  framework  has  been 
established in 2005 between France, Germany, and 
the  three  Benelux  countries.  "Pentalateral  Energy 
Forum" 
regulatory 
authorities, Transmission System Operators, power 
exchanges  and  market  participants.  The  goal  is  to 
ensure the better integration of the energy markets 
between these countries, which are natural energy 
trading  partners.  Better  integration  of  energy 
markets,  through  "flow-based  market  coupling", 
serves  to  enhance  reliability,  security  of  supply, 

EN 

Lithuania 

32 

   EN 

 
and economic efficiency. Resources are pooled for forecasting and capacity planning. 

Baltic states cooperation during winter period 

Pipeline  import  from  Russia  is  regularly  disrupted  every  winter  in  some  of  the  Baltic 
countries.  During  this  period  the  gas  is  supplied  from  the  Latvian  underground  gas  storage 
Incukalns (2.3 bcm capacity) to cover the most of the gas demand in Latvia and Estonia, but 
also part of the gas demand in Lithuania, Russia (Kaliningrad area) and sometimes also in the 
St. Petersburg region. Therefore, all gas consumed during the year (both summer and winter) 
has to be imported during a period of about six months in the summer season and stored in 
Latvia. Therefore one of the most significant risks to gas supplies in the Baltic countries is a 
failure of the Inculkans storage facility 

Summer flows 

Winter flows 

Map: Gas flows in Baltic States in summer and winter periods. 

6.7. 

Cross-border capacities  

Proper planning of cross-border capacities is essential for security of gas supply as well as for 
the internal market. The gas network shall be able to deliver all the gas demanded in Europe. 
It  has  to  withstand  very  high  gas  demand  during  strong  winter.  Sufficient  capacity  shall  be 
able  to  deliver  enough  gas  in  future,  following  the  consumption  patterns  in  EU.  The  cross-
border  capacity  planning  shall  be  done  in  line  with  the  annual  gas  demand  scenarios  for 
winter consumption, both at the country levels and at the EU level, and both from the point of 
gas import and of domestic consumption. 

Entry points to European Union 

Europe  has  38  gas  entry  points.  25  pipelines  (from  Russia  3  pipelines  directly,  4  through 
Belarus  and  5  through  Ukraine,  9  from  Norway,  1  from  Tunisia,  1  from  Morocco,  1  from 
Libya,  and  1  from  Turkey)  and  13  LNG  terminals.  The  entry  capacity  of  gas  pipelines  is 
around 370 bcm (e.g. 190 bcm from Russia, 38 bcm from Algeria and 127 bcm from Norway) 
and around 100 bcm of existing LNG terminals.  

The main entry point to the EU is at the eastern border of Slovakia importing the Russian gas 
to  Europe  through  Ukraine.  Other  important  entry  points  of  Russian  gas  to  Europe  through 
Ukraine are in Romania, Hungary and Poland. Poland and Lithuania imports Russian gas also 
through  Belarus.  Finland,  Estonia,  and  Latvia  have  direct  gas  connections  to  Russia.  New 

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pipelines creating additional import capacity for gas from Russia to EU are planned.  

Chart: Annual capacity of pipeline entry points to the EU (bcm)  

Source: GIE, MS reporting, European Commission 

Norwegian gas is imported to Europe through gas pipeline connections to UK, Germany, the 
Netherlands,  Belgium  and  France.  A  new  pipeline  is  planned  to  connect  Sweden  and 
Denmark. Algerian gas is imported by pipelines to Spain and Italy. A new pipeline to Spain is 
under construction and another is planed to diversify the route to Italy. Italy is connected to 
Libya by a pipeline. One new pipeline bringing gas to Europe (Medgas) and one extension of 
import capacity (Algeria-Italy) are already under construction. 

Greece  imports  gas  from  Caspian  area  via  Turkey.  Several  pipelines  are  planned  in  the  4th 
corridor  (Caspian  /  Middle  East  to  the  EU):  Nabucco,  ITGI,  Trans-Adriatic  pipeline  and 
White Stream. There are also Black-sea LNG or CNG options on the table. 

Chart: Annual capacity of LNG terminals in EU (bcm)  

Source: GIE, MS reporting, European Commission  

Spain  has  the  biggest  capacity  of  LNG  terminals.  Spain  operates  6  and  France  3  LNG 
terminals.  Belgium,  Greece,  Portugal,  Italy  and  UK  operate  LNG  terminal.  Seven  LNG 
terminals of 57bcm capacity in total are under construction in four MS (France, Italy, Spain 
and UK). However, two of them (1 in Italy and 1 in UK) are already behind the schedule of 
the construction and the operation start is postponed by couple of years.  

France,  Italy,  Spain,  and  UK  also  plan  to  extend  the  capacity  of  existing  LNG  terminals. 
Other  Member  States  like  Cyprus,  Germany,  Ireland,  Malta,  Netherlands,  Poland,  Sweden, 
and  some  Baltic  countries  plan  to  construct  new  LNG  terminals.  The  Netherlands  have 
already  started  the  construction.  However,  the  experience  shows,  that  only  some  of  these 
plans will materialise.  

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Conclusions 

There  is  only  one  new  gas  pipeline  bringing  gas  to  Europe  under  construction.  All  other 
pipelines are still only plans, how to bring the gas from Russia, Norway, Algeria, and through 
the 4th Corridor. The LNG terminals are in a better position in Europe compared to pipeline 
projects. Strong increase of  LNG availability in the world market has given the potential to 
develop the LNG regasification terminals in Europe. So far 7 new LNG terminals are under 
construction and other 20-30 are planned (including expansion of existing LNG terminals). 

Proper  planning  of  gas  demand  scenarios  is  necessary,  because  the  construction  of  new 
pipelines  and  LNG  terminals  takes  2-5  years.  Without  enough  capacity  at  the  EU  border 
points, it might be impossible to bring sufficient additional gas to Europe. Enough gas at the 
market is the precondition to running the internal gas market properly. 

6.8. 

Diversification of gas supplies  

In  Poland,  Spain  and  Portugal  the  diversification  of  gas  supply  is  stipulated  in  the  national 
legislation as an obligation, maximum 60% of gas supply can come from one supplier.  

Eight  Member  States  (Sweden,  Finland,  Ireland,  Latvia,  Lithuania,  Estonia,  Bulgaria,  and 
Slovakia)  fully  depend  on  gas  imports  from  only  one  gas  supplier.  In  addition,  Estonia, 
Finland,  Latvia  and  Lithuania  have  no  domestic  gas  production.  Bulgaria,  Ireland  and 
Slovakia  have  only  marginal  domestic  production.  Romania  has  also  only  one  gas  supplier, 
but  an  important  domestic  production  covering  more  than  half  of  its  gas  demand.  Poland, 
Czech  Republic,  Hungary,  Austria,  Slovenia,  Greece,  UK,  and  Italy  constructed  additional 
pipeline connections, thus diversified their routes of gas supplies in the last 15 years.  

Portugal and Greece introduced natural gas into their energy mix only in the last 15 years, and 
diversified  their  gas  supplies  by  LNG  terminal.  Ireland  is  planning  to  do  so,  as  well  as  the 
Netherlands, Germany, Poland, and Sweden.  

6.9. 

Investment support 

Investment in infrastructure is one of the instruments from the Annex of the Directive. There 
are  many  projects  through  Europe  to  build  new  or  to  expand  existing  pipelines  and  storage 
facilities,  including  interconnections.  Investment  in  infrastructure  for  gas  import  via 
regasification  terminals  and  pipelines  is  necessary  (see  explicitly  in  the  Annex  of  the 
Directive). But it is also necessary to invest in interconnections and downstream infrastructure 
to reaching the customers. Investment in infrastructure can only help security of supply if the 
gas is physically available and able to flow. 

EU financial instruments 

Basic  financial  instrument  supporting  the  European  gas  infrastructure  are  Trans-European 
Networks  for  energy  infrastructure  (TEN-E).  The  EC  Treaties  of  Rome  (1957)  and 
Maastricht (1993) laid the foundation for the creation of the internal market allowing the free 
movement  of  people,  goods  and  capital.  This  includes  European  internal  energy  market. 
Article 154 (ex Article 129b) in the treaty with regards to Trans-European Networks set out 
the objectives of Community action: "Contributing to the establishment and development of 
Trans-European  networks  in  the  areas  of  transport,  telecommunications  and  energy 
infrastructures." 

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European Community Guidelines for TEN-Energy were adopted for the first time in the year 
1996, comprising the list of projects of common interest. Financial rules specify the financial 
procedures involved. Trans European Energy Networks budget line is managed in accordance 
with Regulation (EC) No 2236/95 of the Council amended by Regulation (EC) No 1655/1999, 
No 788/2004 and No 807/2004. 

Guidelines  on  Trans  European  Energy  Networks  specify  which  projects  are  eligible  for 
funding. The list of projects has been revised four times, in 1997, 1999, 2003, and 2006. The 
last  one  in  Decision  No  1364/2006/EC  of  the  European  Parliament  and  of  the  Council  of  6 
September  2006  laying  down  guidelines  for  trans-European  energy  networks  and  repealing 
Decision 96/391/EC and Decision No 1229/2003/EC.  

Commission  defines  in  the  Guidelines  three  categories  of  projects  -  Projects  of  European 
Interest, Projects of common interest, and Priority projects.  

Table of the allocated budget from TEN-E to gas sector projects 

Nb of proposals 
funded, of which: 

Works 

Studies 

Total Amount 
allocated 

2002 
2003 
2004 
2005 
2006 
2007 
2008 

6 
6 
8 
6 
4 
5 
8 

0 
0 
0 
0 
1 
1 
1 

6 
6 
8 
6 
3 
4 
7 

11.078.300 € 
12.364.700 € 
9.901.590 € 
11.543.140 € 
8.808.900 € 
6.024.500 € 
12.467.183 € 

Other EU financial instruments 

There are several European Community financial instruments which may come into play for 
financing gas infrastructure. 

Structural funds as part of Cohesion policy 

European  Regional  Development  Fund  (ERDF)  contributes  to  the  financing  of  the  Trans-
European  Energy  Networks.  Funds  have  been  allocated  from  the  Community  Support 
Frameworks (CSF I and II) and the Community initiatives (REGEN, INTERREG II).  

For  the  first  time  in  the  Financial  perspective  2007-2013,  Structural  funds  (ERDF)  enabled 
direct allocation of budget for gas infrastructure projects. They defined two special categories: 
Category  36  "TEN-E  gas"  supporting  big  TEN-E  interconnection  projects.  Category  35 
"Natural gas" supports other projects than TEN-E, like distribution networks or underground 
gas  storage  facilities.  8  Member  States  allocated  structural  funds  to  finance  their  gas 
infrastructure projects in total. 4 Member States allocated structural funds to the TEN-E gas 
projects.  

Allocated budget from structural funds for the period 2007-13 for the gas projects  

Member State 

Category 35 - Natural gas 

Category 36 - TEN-E gas 

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Bulgaria 

Lithuania 

Poland 

Romania 

Greece 

Italy 

Portugal 

Spain 

(EUR) 

51.040.633 

26.698.052 

418.188.665 

21.069.687 

81.337.500 

32.044.065 

18.067.152 

9.835.957 

Cross border cooperation  

304.687 

(EUR) 

0 

0 

198.900.000 

47.885.653 

60.150.000 

0 

0 

55.012.432 

0 

Total 

658.586.398 

361.948.085 

European Investment Bank (EIB) loans and loan guarantees 

The  EIB  finances,  through  loans  up  to  50%  of  the  total  cost,  many  TEN  Energy  projects, 
particularly  in  electricity,  with  the  aim  of  contributing  to  the  Community's  TEN  policy. 
Between  1999  and  2007  around  80%  of  a  total  of  €  32  billion  spent  by  the  EIB  in  the 
energy  field  went  to  EU  projects,  which  amounts  to  an  annual  bank  lending  of  €  3.25 
billion.  

The  main  purpose  of  the  EIF  (funded  40%  by  the  EIB,  30%  by  the  Commission  and  the 
remaining 30% by banks and other financial institutions) is to make available, subject to fees, 
guarantees for loans concerning TEN projects. 

European Bank for Reconstruction and Development (EBRD) 

Since  its  establishment  in  1991,  EBRD  has  financed  209  projects  in  the  energy  sector 
providing  total  finance  of  €  6.5  billion  and  supporting  investments  of  approximately  €  22.1 
billion. EBRD focuses on the development of private sector and finances relatively few gas 
infrastructure  projects.  Pipeline  financing  has  increased  in  the  recent  year  for  countries 
outside the EU, in particular Ukraine (3 gas pipeline projects) and Azerbaijan (2 gas pipeline 
projects). 

European Economic Plan for Recovery (EEPR) 

EU adopted in 2009 its European Energy Plan for Recovery of nearly € 4 billion to finance 
the development of a fully integrated energy market as well as to cope with the challenges of 
the security of supply. The amount is divided into three sub-programmes: 

- 2,365M€ is earmarked to gas and electricity infrastructures – also known as interconnections 

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- 565M€ to carbon capture and storage (CCS) 

- 1,050M€ to offshore wind energy. 

Cooperation programmes with third countries 

Since  2007  EC  assistance  to  the  countries  participating  in  the  European  Neighbourhood 
Policy  and  Russia  is  provided  under  the  European  Neighbourhood  and  Partnership 
Instrument  (ENPI).  The  Instrument  replaces  the  assistance  previously  provided  to  the 
countries of Eastern Europe, Russia, Southern Caucasus, Central Asia and the Mediterranean 
under the TACIS and MEDA programmes and is designed to financially support the political 
priorities  agreed  with  partner  countries  through  the  ongoing  political  initiatives.  For  the 
budgetary period 2007-2013, approximately €12 billion in EC funding is available to support 
the partner countries. The Instrument includes  

the  ENPI  Cross-Border  Cooperation  (CBC)  programme,  which  could  offer  some 
possibilities for local infrastructure development. In the context of the ENPI instrument, the 
EC continues its assistance previously provided under the INOGATE Programme (Interstate 
Oil  and  Gas  Transport  to  Europe).  INOGATE,  initially  aiming  at  promoting  the  regional 
integration of the gas and oil pipeline systems and facilitating the transport of oil and gas both 
within the greater NIS region and towards the export market of Europe, has been extended to 
cover  other  energy  sectors  and  projects,  including  electricity,  renewables  and  energy 
efficiency.  

Finally, the Neighbourhood Investment Facility was established at the end of 2007 with the 
objective to and support lending to ENP partners. The Commission’s allocation to the Facility 
for  the  period  2007-2013  amounts  to  €700m  and  is  complemented  by  Member  States’ 
contributions.  The  Facility  is  funding  projects  of  common  interest  focussing  primarily  on 
energy, environment and transport. 

6.10.  Liquid tradable gas markets  

Security  of  supply  can  be  enhanced  by  a  liquid  market.  One  reason  for  this  is  greater 
flexibility  in  terms  of  price  and  volumes  available,  which  enables  the  gas  supplies  to  be 
diverted  in  response  to  price  signals.  Flexible  use  of  gas  storage  facilities  also  helps  to 
improve  the  market  liquidity.  However,  the  liquid  gas  markets  will  help  to  increase  the 
security of supply if the market will be able to deliver the gas from one side to other.  

Important  pre-condition  for  a  liquid  gas  market  is  adequate  infrastructure  (pipeline  and 
storage facilities, including interconnections), in order to ensure that gas can be traded where 
demand arises across Europe. Other important precondition is enough gas on the market.  

Market liquidity is a business, economics or investment term that refers to an asset's ability 
to  be  easily  converted  through  an  act  of  buying  or  selling  without  causing  a  significant 
movement in the price and with minimum loss of value. It also defines the ability of market 
players to trade a market commodity on a spot market.  

Good possibilities for all market players to buy and sell even large volumes of gas at any time 
at a competitive market price is a crucial feature of a well functioning internal market for gas. 
Liquidity will rise, if the number of players active on the market, the volumes traded and the 
numbers of trades that take place will increase.  

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Liquidity  could  be  also  defined  as  a  ratio  between  spot  gas  volumes  and  long  term  gas 
volumes.  Today  almost  90%  of  the  volumes  are  traded  on  the  virtual  hubs  such  as  the 
National  Balancing  Point  (NBP)  in  the  UK,  the  Title  Transfer  Facility  (TTF)  in  the 
Netherlands and the Punto di Scambio Virtuale (PSV) in Italy. Spot market might turn around 
between 10 and 15% of total gas traded. 

LNG has increased its share in the EU gas market gaining more than 12% in 2007. Spot LNG 
cargo is flexible to reach any LNG terminal in Europe, if it is needed. However, the global 
aspect also plays its role, to gain the spot LNG cargo, it is necessary to outbid US and Asia 
markets  by  higher  prices.  The  LNG  Study  defines  the  level  of  the  LNG  gas  spot  and  short 
term  market  to  15%  of  LNG  cargos  to  Europe.  This  share  is  expected  to  increase,  shifting 
more towards shorter term and spot contracts. This also increases the liquidity and flexibility 
of the gas market. 

It should be noted, that price volatility in liquid markets can lead to higher prices. This will 
especially  apply  in  cases  of  shortfalls  of  gas  or  supply  disruptions  respectively,  when  the 
demand  for  gas  will  be  very  high.  Thus  one  of  the  preconditions  is  the  guarantee  to  have 
enough gas on the market.  

Provision of pipeline capacity enabling gas supplies diversion to affected areas, could mean 
the  free  available  capacity  in  the  existing  gas  pipelines,  which  could  be  used  if  gas  supply 
diversion  is  necessary.  However,  it  could  also  mean  the  need  for  more  investments  and 
construction of gas pipelines and gas interconnections inside the internal market. Supporting 
the  investment  and  proper  planning  inside  the  internal  market  will  help  to  fulfil  this  more 
obligation than instrument.  

Conclusion 

Liquidity  in  the  gas  market  increases  the  security  of  gas  supply  in  the  internal  market. 
However, the precondition for a liquid gas market is a definite volume of gas at the market to 
creating the liquidity.  

6.11. 

Other instruments identified and used by Member States 

The Directive provides only for a non-exhaustive list of instruments, the Member States have 
the  possibility  to  introduce  other  security  of  gas  supply  measures.  Most  of  Member  States 
defined in their national legislation the secure gas supplies for some categories of customers 
as a public service obligation. Also the monitoring of security of supply, long term planning 
of the grid development, and network balancing has been defined as other important elements 
increasing the security of gas supplies.  

6.11.1.  Long term planning 

One of the important instruments defined by some Member States (Austria, Denmark, France, 
Ireland, UK) is a planning procedure on a longer term basis. Its main objective is to determine 
the gas consumption for a certain time period, usually 5-10 years with concrete main projects 
to develop the gas infrastructure to meet the gas demand.  

This  task  is  usually  centrally  coordinated  by  the  body  responsible  for  overall  security  of 
supply. This task is also given to the system operators to make a planning for the development 
of their own parts of the network, and which are in line with long-term development plans and 

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gas  demand.  Also  the  gas  suppliers  have  to  prepare  their  own  supply-demand  forecast  and 
provide it to the coordinating body.  

For example, France and Denmark have to prepare a multi-annual indicative plan, which will 
ensure  the  supply-demand  balance  in  gas  for  next  ten  years,  by  defining  the  investment 
priorities,  long-term  contracts  and  the  emergency  measures  in  a  long-term.  Ireland's  Gas 
Capacity Statement takes 20 years forward forecast, in addition to regular 7 years.  

The  third  package  on  IEM5  has  partially  addressed  this  issue  by  the  introduction  of  the 
TSOs co-operation in long-term network development planning. 

6.11.2.  Public Service Obligations  

Public  Service  Obligations  are  obligations  which  would  not  be  assumed  (or  would  not  be 
assumed  to  the  same  extent)  by  undertakings  operating  under  market  conditions  and 
considering their own commercial interests6. Nevertheless, Member States may wish to ensure 
that certain obligations are fulfilled for the common economic interest.  

The Gas Directive requires only that if customers are connected to the gas system, Member 
States should ensure that they are informed about their rights to be supplied with natural gas 
of a specified quality at reasonable prices. Contrary to the Electricity Directive, there are no 
universal  service  obligations  (meaning  that  there  is  no  duty  to  connect  each  customer  who 
wishes to be supplied with gas). This different approach results from the significant difference 
between  gas  and  electricity,  namely  the  fact  that  natural  gas  is  more  easily  substitutable 
source of energy, whereas there are no reasonable substitutes for electricity.  

Therefore,  the  imposition  of  Public  Service  Obligations  on  gas  undertakings  may  include 
obligations relating to: 

•  Security, including security of supply; 

•  Regularity and quality of supplies; 

•  Affordability; 

•  Environment and climate protection; 

•  Long  term  planning  (with  regard  to  security  of  supply,  energy  efficiency,  demand-side 

management and for environmental goals). 

Despite  the  lack  of  obligation  of  universal  (complete)  territorial  coverage  for  gas  networks, 
most Member States impose Public Service Obligations in order to ensure the security of gas 
supply.  The  security  of  gas  supply  is  the  part  of  Public  Service  Obligations  defined  in  11 
Member  States  (Austria,  Bulgaria,  Finland,  France,  Greece,  Italy,  Lithuania,  Latvia, 

5 
6 

Third internal market package 
The definition of "public service obligation" is contained in Council Regulation 1191/69 (OJ L 156 of 
28 June 1969) on action by member States concerning the obligation inherent in the concept of a public 
service  in  transport  by  rail,  road  and  inland  waterway.  Regulation  1191/9  has  recently  been  repealed 
Regulation 1370/2007/EC; however the definition of PSO remains very similar 

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Luxembourg, Portugal, and Slovenia) in the common interest7. Those obligations are imposed 
to  various  system  operators  (TSO,  DSO,  LSO,  UGSO),  as  well  as  to  the  suppliers. 
Furthermore, in most cases the imposed Public Service Obligations are related to the quality 
of delivered gas, quality of gas supply service, regularity of gas deliveries, and to ensure the 
gas supply in case of gas supply disruption or any similar accident. Sometimes the gas supply 
has to be guaranteed for a certain period of time.  

In  Belgium  the  Public  Service  Obligation  is  imposed  to  transit  and  suppliers  to  develop 
adequate gas network. In France the Public Service Obligation is imposed to every supplier, 
who  has  to  store  the  gas  of  amount  of  at  least  85%  of  its  gas  storage  capacity  on  the  1st  of 
November of each year. In Finland, the obligation is imposed to System Operator to connect 
customer, storage facility or LNG facility.  

The Ministry (Greece, Lithuania, and Slovakia) or the regulator (Malta) have got the power to 
impose the Public Service Obligations to ensure the gas supply. In Germany the regulator has 
power  to  impose  public  service  obligation  only  in  a  supply  crisis.  In  Bulgaria  the  Ministry 
shall enlarge the scope of imposed public service obligations related to the uninterrupted gas 
supply. Czech regulator shall extend the scope of imposed public service obligations to prices 
and to define the supplier as a provider of last resort to provide the gas in the event of supplier 
contract failure. In most countries (except the Netherlands) Public Service Obligations include 
also tariff regulation.  

6.12.  General Conclusions  

The balance of various instruments is essential to enhancing the security of gas supply. The 
most  frequent  measures  are  gas  storages,  long  term  contracts,  flexibility  of  production  and 
imports and diversifications of gas supply.  

The list in the Annex is defined as a "non-exhaustive", thus Member States had the possibility 
to introduce further security of gas supply instruments. Most of them set long-term planning 
procedures and public service obligation to guarantee the security of gas supply.  

It is often mentioned that the existence of long term contracts may reduce market liquidity on 
the  basis  that  they  do  not  facilitate  gas  release  to  the  market  for  third  parties  to  trade.  For 
example,  the "liquid  tradable  gas  markets” does  not interact with  the “long term contracts”. 
Both instruments complement one another to enhancing the security of gas supply.  

Investment support and long-term gas supply contracts are used by all Member States, but not 
all  are  mentioned  in  the  legislation.  The  long-term  contracts  shall  be  taken  as  a  tool  to 
guarantee  that  certain  amount  of  gas  will  come  to  the  market.  In  a  world  of  tight 
supply/demand  tension  long  term  supply  contracts  in  the  sense  of  the  Directive  grant 
guaranteed  volumes  of  gas  with  a  predictable  price  calculation  method,  with  less  risk  of 
volatility. 

Flexibility is very much supported. Production flexibility is important measure for substantial 
gas producing countries. However, the maximal volume of gas produced in Member States is 

7 

The  role  of  Public  Service  Obligation  in  the  internal  gas  market  is  defined  in  the  Article  3  of  the 
Directive 2003/55/EC on the internal gas market  

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decreasing,  which  also  has  impact  on  flexibility  of  gas  production.  The  significance  of  this 
measure is in slight decrease. Import flexibility is used by all importing Member States.  

Both  diversifications  of  routes  and  of  energy  mix  are  developed  in  the  same  15  Member 
States. The diversification of suppliers, the cross-border capacity planning, and the long term 
planning of the gas network development are supported in every Member State, usually given 
to system operators and overall responsible bodies. 

Cooperation between TSOs in neighbouring countries and regions is well supported; however 
the coordinated dispatch service is not exactly mentioned. Fuel-switch possibility, alternative 
fuels and fuels stocks use, and interruptible contracts are also used in most of Member States. 
Furthermore, some countries have a very in-depth assessment (and a good control) of their gas 
supply situation and the effectiveness of their mitigation tools, other countries don't.  

Generally we can conclude that the level playing field within the EU has not been reached. 

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7. 

GAS COORDINATION GROUP (ART.7) 

In order to monitor the security of supply situation and provide a coordination mechanism in 
case  of  a  supply  crisis,  the  Directive  establishes  a  Gas  Coordination  Group  chaired  by  the 
European  Commission  and  composed  by 
the  Member  States, 
representatives of the industry concerned and representatives of relevant customers. 

representatives  of 

Gas  Coordination  group  was  established  in  line  with  the  Article  7(1):  "A  Gas  Coordination 
Group  is  hereby  established  in  order  to  facilitate  the  coordination  of  security  of  supply 
measure  (the  Group)."  by  the  Commission  Decision  2006/791/EC  of  7  November  2006 
establishing the composition of the Gas Coordination Group (Text with EEA relevance).  

The  role  of  the  Gas  Coordination  Group  is  stipulated  in  the  Recital  15  of  the  Directive 
2004/67/EC:  "  A  Gas  Coordination  Group  should  be  established,  which  should  facilitate 
coordination of security of supply measures at Community level in the event of a major supply 
disruption, and may also assist member States in coordinating measures taken at a national 
level. In addition, it should exchange information on security of gas supply on a regular basis, 
and  should  consider  aspects  relevant  in  the  context  of  a  major  supply  disruption."  and  in 
similarly worded the Recital 7 of the Commission Decision 2006/791/EC. 

The tasks of the Group are defined in Article 2 of the Commission Decision: "The tasks of the 
Gas  Coordination  Group  shall  be:  (a)  to  facilitate  coordination  of  security  of  supply 
measures  at  Community  level,  including  in  the  event  of  a  major  supply  disruption;  (b)  to 
examine,  and,  where  appropriate,  assist  the  Member  States  in  coordinating  the  measures 
taken at national level to deal with a major supply disruption." 

Composition  of  the  Gas  Coordination  Group  is  defined  by  Article  1  of  the  Commission 
Decision in line with the Article 7(2) of the directive. It is composed of "not more than two 
representatives" from each Member State, from industry represented by industry associations 
Gas  Infrastructure  Europe  (GIE),  Eurogas,  and  the  International  Association  of  the  Oil  and 
Gas  Producers  (OGP),  and  from  consumers  represented  by  the  International  Federation  of 
Industrial Energy Consumers (IFIEC Europe), Eurelectric, and Bureau Européen des Unions 
de Consommateurs (BEUC). The Group is chaired by the Commission. 

The Group is convened to hold regular meetings 3-4 times a year since 2006. The Group is 
convened also for the emergency meetings envisaged under the Article 9 of the Directive. In 
fact the first meeting of the Gas Coordination Group was an emergency meeting in January 
2006.  

The role of the Group has been discussed also with the members of the Group. The role of the 
Group  its  task  and  its  functioning  have  been  judged  satisfactory.  The  main  role  is  to 
coordinate  the  security  of  supply  measures,  but  also  to  monitor,  to  predict  and  to  advise 
Member States in setting emergency measures and actions. According to Member States it is 
also  "a  platform  for  the  Commission,  Member  States  and  industry  to  discuss  the  national 
security of supply measures".  

However, it was also mentioned what better or more precise definitions of many terms of the 
Directive  is  necessary.  Preparation  of  guidelines  for  European  coordination  to  mitigate  a 

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major supply disruption, and the solidarity mechanism in the gas supply are the main tasks of 
the group for the immediate future.  

Conclusions 

Gas Coordination Group enables Member States, industry and Commission to discuss the gas 
security of supply issues in the Community, as well as to develop and shape the instruments 
and emergency measures for security of gas supply. 

Extraordinary meetings of Gas Coordination Group  

Article 9(1) of the security of gas supply directive introduces the mechanism, which enables 
to convene the gas coordination group meetings in an emergency mode "as soon as possible" 
under the consideration of one of these two circumstances: "If an event … is likely to develop 
into  a  major  supply  disruption  for  a  significant  period  of  time,  or  in  the  case  of  an  event 
indicated by a Member State according to Article 8(3)…".  

Article  8(3)  defines  that  "…Member  States  may  indicate  to  the  Chair  of  the  Group  events 
which  they  consider,  because  of  their  magnitude  and  exceptional  character,  cannot  be 
adequately managed with national measures." 

The  Commission  has  already  convoked  four  extraordinary  meetings  of  Gas  Coordination 
Group since 2008, and three in 2009, closely related to the January 2009 gas crisis.  

In January 2006, in the course of gas negotiations between Russia and Ukraine, gas supply to 
Ukraine and onwards to the EU was reduced. The overall reduction amounted to 20% of gas 
supply through Brotherhood pipeline for period of 2 days. This reduction resulted in a chain 
reaction affecting Hungary by 30% reduction of gas supplies, Slovakia, Czech Republic and 
Austria by 20%, Italy by 15%, Poland by 10% and Germany by 6%.  

During March 2008, when Russia announced reduced gas supply to Ukraine by 60 mcm/day 
the Gas Coordination Group run a model scenario showing what could possibly happen if the 
gas transit through Ukraine was reduced by 60 mcm/day.  

These  two  examples  have  showed  some  patterns  how  gas  supply  disruptions  from  Russian 
through  Ukraine  affects  or  could  affect  Member  States.  In  both  cases  the  20%  threshold  of 
supply disruption from 3rd Countries, defined as a major supply disruption, was not reached, 
but Member States were or could have been affected significantly.  

The  January  2009,  gas  supply  crisis  confirmed  the  importance  of  the  emergency  meetings 
approach. Commission was able to provide up-to-date information and analysis of the crisis 
situation in all Member States and in EU, exchanging best practices and measures used among 
Member  States  and  industry,  and  to  advise  both  Member  States  and  industry  to  take  other 
possible measures helping each other.  

Conclusions  

The  extraordinary  meetings  mechanism  of  Gas  Coordination  Group  has  been  proved  as  a 
successful tool even through there was no need yet to set up and apply for the next two steps 
of  the  Community  approach.  The  convocation  of  the  extraordinary  meetings  enabled  to 
discuss the problem, and helped to re-establish the normal relations status between export and 

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transit countries, to at least the level, which has not endangered any more the transit of natural 
gas to Europe.  

In the disruption in January 2009, the other two steps in three step approach of gas emergency 
were not used, but the role of the Group as the real coordination and central information body 
for European emergency situations has been proven.  

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8. 

COMMUNITY THREE STEP APPROACH  

Recital 18 of the  Directive  stipulates the  importance  of  the  Community  approach to  help to 
deal with gas disruption. This mechanism provided by this Directive shall be based "… on a 
three step approach. The first step would involve the reactions of the industry to the supply 
disruption; if this were not sufficient, Member States should take measures to solve the supply 
disruption. Only if the measures taken at stage one and two have failed  should appropriate 
measures be taken at Community level."  

It  is  underlined  in  the  Recital  19  of  the  Directive,  supportive  measures  shall  be  done  in 
accordance with the principles of proportionality and subsidiarity as defined in the Article 5 
of  the  Treaty  "Since  the  objective  of  this  Directive  (…)  cannot,  in  all  circumstances,  be 
sufficiently  achieved  by  the  Member  States,  particularly  in  light  of  the  increasing 
interdependency of the Member States regarding security of gas supply, and can therefore, by 
reason  of  the  scale  and  effects  of  the  action,  be  better  achieved  at  Community  level,  the 
Community may adopt measures, in accordance with the principle of subsidiarity as set out in 
Article 5 of the Treaty. In accordance with the principle of proportionality, as set out in that 
Article,  this  Directive  does  not  go  beyond  what  is  necessary  in  order  to  achieve  that 
objective." 

The link between national emergency measures and the European/Community level is defined 
in Article 8(3). This article gives the right  to Member States  to  indicate to the  Commission 
(Chairman of the Gas Coordination Group) any major gas emergency event in their country, 
which could not be adequately managed by the national emergency measures, because of the 
magnitude or exceptional character of the event.  

The main tasks at the Community level are predefined in Article 9 in the three steps approach:  

•  First, industry takes measures to deal with a supply shortfall.  

•  As second step, Member States' national measures are activated.  

•  Only  if  the  measures  taken  at  the  first  two  levels  are  not  sufficient  to  cope  with  the 
shortfall or disruption of supply, "the Commission shall convene the [Gas Coordination] 
Group as soon as possible, at the request of a Member State or on its own initiative." 

The Commission shall convene an emergency meeting of the Gas Coordination Group. This 
Group shall examine and assist the Member States in coordinating the measures taken at the 
national  level  to  deal  with  the  major  supply  disruption.  The  Group  shall  take  fully  into 
account  the  measures  taken  by  the  gas  industry  as  a  first  response  to  the  major  supply 
disruption and the measures taken by Member States including relevant bilateral agreements.  

Where  the  measures  taken  by  Member  State  at  the  national  level  referred  to  the  Gas 
Coordination  Group  are  inadequate  (…),  the  Commission  may,  in  consultation  with  the 
Group,  provide  guidance  to  Member  States  regarding  further  measures  to  assist  those 
Member States particularly affected by the major supply disruption.  

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Where  the  additional  measures  taken  at  national  level  after  the  advice  of  the  Gas 
Coordination  Group  are  inadequate  (…),  the  Commission  may  submit  a  proposal  to  the 
Council regarding further necessary measures.  

Any  measures  at  Community  level  shall  contain  provisions  aimed  at  ensuring  fair  and 
equitable compensation of the undertakings concerned by the measures to be taken. 

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9. 

NATIONAL EMERGENCY MEASURES (ART.8) 

Member States shall prepare national emergency measures according to the Article 8(1) of the 
Directive.  According  to  the  Article  8(3)  Member  States  shall  communicate  these  national 
emergency measures to the Commission and also publish them. The prominent role of these 
measures is in the preparation of Member States in advance to any crisis situation. Therefore 
the national emergency measures shall be prepared in advance, and updated accordingly if it 
becomes necessary.  

Until  the  end  of  April  2009,  the  Commission  has  received  the  notification  of  national 
emergency measures only from 12 Member States. 7 other Member States (Denmark, Estonia, 
Greece, Hungary, Ireland, Portugal and Sweden) provided their national emergency measures 
to  the  Commission,  but  these  were  not  communicated  thorough  the  official  notification 
procedure. Other 6 Member States (Belgium, Germany, Latvia, Luxembourg, the Netherlands 
and  Romania)  have  not  yet  communicated  to  the  Commission  their  national  emergency 
measures.  Thus  the  further  analysis  is  not  complete,  because  it  is  not  based  on  all  Member 
States. However, the most common practices are similar in many Member States. 

The  national  emergency  measures  shall  ensure  that  market  players  are  given  sufficient 
opportunity to provide an initial response to the emergency situation. Member States have to 
be ready for that event and have to have in operation all necessary provisions and operational 
plans how to deal with the gas supply reduction, or the disruption.  

Member  States  transposed  these  provisions  in  two  steps.  At  first,  they  obliged  different 
market players to develop the national emergency measures in their national legislation, and 
only after this step, the market players have developed the national emergency measures.  

Member  States  realised  the  obligation  to  implement  the  national  emergency  measures  in  a 
different  way.  Some  Member  States  (Austria,  Bulgaria,  Czech  Republic,  France,  Greece, 
Italy,  Lithuania,  Slovakia,  Slovenia  and  UK)  have  developed  a  kind  of  emergency  scale, 
which defines the different emergency stages, as well as enables to decrease the gas demand 
progressively  in  a  country,  without  affecting  the  national  economy.  The  security  of  supply 
authority  (responsible  body)  set  emergency  stages  according  the  importance  of  gas  supply 
disruption. Consequently all market players (system operators, suppliers, etc) have to follow 
the emergency procedures as preset in every emergency stage.  

Some Member States (Austria, Czech Republic, Denmark, Estonia, Finland, France, Greece, 
Italy,  Slovakia,  Sweden  and  UK)  went  further  in  the  implementation  and  created  so  called 
"National  Emergency  Plans".  After  the  January  2009  gas  disruption  Belgium,  Ireland, 
Hungary,  Lithuania,  Poland,  Romania  and  Slovenia  have  also  introduced  emergency  plans. 
The plans include preset roles and responsibilities of market players, who have to operate in 
case of any emergency level (stage) and created a system for various measures necessary for 
the operation under the difficult or emergency conditions.  

Other  aspect  taken  by  Member  States  is  the  role  of  prevention  and  preventive  measures. 
Only  few  Member  States  have  created  so  called  prevention  measures  (Austria,  France, 
Lithuania,  the  Netherlands  and  Portugal)  and  defined  some  of  the  national  emergency 
measures as preventive measures, which also diminish the risk of the gas supply decrease or 

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disruption,  as  well  as  the  impact  to  the  national  economy,  if  the  gas  decrease  or  disruption 
occurs and emergency level shall be set.  

Conclusion 

Member  States  took  two  steps  approach  to  transpose  this  Article.  At  first,  they  set  in  the 
national legislation an obligation for some market players to create the emergency measures. 
The second step after the adoption of the legislation has been up to the defined market players 
to  prepare  and  put  into  operation  their  emergency  plans  after  a  certain  time  period.  This 
approach  has  created  a  delay  in  full  transposition  of  this  Article.  It  also  means,  that  the 
Commission could assess national emergency measures (national emergency plans) only of 18 
Member States. Some of them Commission received only in the last days, thus the assessment 
is very general. 

Most of the Member States have defined their national emergency measures in a systematic 
way  creating  the  national  emergency  plans.  In  these  plans  they  also  included  prevention 
mechanisms, nominal level of gas market operation, as well as different pre-emergency and 
emergency levels defined by disruption volume and by the economic impact.  

9.1. 

Gas emergency scale  

Member  States  have  developed  and  defined  in  their  national  legislation  a  Gas  emergency 
scale.  Every  National  Emergency  Plan  includes  emergency  scale.  It  contains  various  very 
precisely  defined  levels  of  gas  consumption,  which  have  to  be  followed  if  the  different  gas 
consumption level than normal is set. 

The emergency scale of gas supply levels/states ranges between Member States from 3 to 12 
different  levels  of  predefined  gas  consumption  for  different  gas  customers,  but  they  usually 
follows these three main levels:  

(1) 

(2) 

Normal  state,  normal  level  of  gas  consumption  –  is  defined  as  the  gas 
supply/consumption  under  normal  (nominal)  market  conditions  and  full/normal  gas 
supply; 

Limited/exceptional gas consumption level – pre-emergency or potential emergency 
stage is set by 7 Member States (Austria, Bulgaria, Czech Republic, Greece, Slovakia, 
Spain and UK); 

If different state of gas consumption is declared, the gas supply shall be limited to the specific 
extent which does not hamper the economy of the country. This limited level of consumption 
is defined as technological level or exceptional gas supply level.  

•  Safety technological minimum level – is limited level of gas consumption. The limitation 
of the gas supply is set as the minimal gas supply which will not hamper the economy of 
the defined customers (usually industry). It depends on gas appliances and gas equipments 
of  the  company,  its  possibility  to  fuel  switch,  different  technology  for  gas  is  used,  and 
flexibility to run the equipment. Some MS have defined different level of gas customers, 
for whom this minimum shall be defined. In CZ the safety technological minimum applies 
to customers with consumption > 400 000 m3/y, or the consumers, which are not covered 
by security of supply standards 

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•  Exceptional situation - is defined as a situation of exceptional operation in anticipation that 
the  normal  condition  parameters  are  not  fulfilled,  but  the  situation  does  not  require  the 
declaration  of  emergency  situation.  Spain  has  defined  3  levels  (0,1,2)  of  exceptional 
situation depending on the severity of event. 

(3) 

Emergency level – Stage of emergency  

If restrictions of pre-emergency levels do not ensure safe gas supply, Emergency consumption 
levels are declared. Stage of emergency is declared if there is a gas supply reduction, which is 
not possible to be managed without economic impact to the economy. 

The roles and responsibilities of market players are predefined in case of stage of emergency. 
In some Member States, different market players are set as responsible bodies to guarantee the 
gas supply and to manage the gas system (e.g. Supplier to TSO than to Regulator in Germany, 
Suppliers to TSO in Denmark and France) 

Conclusion 

The definition of emergency status, nominal supply conditions, etc., defining the emergency 
systems in general, shall be at least comparable and understandable in all Member States. The 
general patterns are already introduced by Member States in the way how they implemented 
the  provisions  of  the  Directive.  Proper  understanding  of  national  emergency  systems  will 
create a base for the European emergency system, mentioned in the Article 8 of the Directive. 

9.2. 

Definition of crisis situations in gas supply 

Major supply disruption, national energy crisis, or any other crisis situation in gas supply is 
defined by Member States in their national legislation in a different way.  

Czech Republic defines the emergency situation if partial gas supply disruption for the period 
of 8 weeks occurs and the volumes of 20% of the total daily supply contracts set to ensure the 
supply  for  final  customers  in  the  Czech  Republic,  or  for  auto-supplier,  during  the  winter 
period are lost.  

Hungary defined a crisis situation in gas supply as a supply disruption of natural gas, which 
directly endangers persons, assets, nature, environment and supply of majority of customers.  

Latvia  declares  national  energy  crisis  when  the  energy  supply  is  disturbed  in  such  amount 
that  it  may  threaten  the  safety,  health  of  inhabitants  and  activity  of  other  economic  sectors, 
and such disturbances cover a territory in which the number of inhabitants exceeds one third 
of  the  State's  population  or  which  covers  more  than  a  half  of  the  national  territory.  Energy 
crisis is declared when the supply of energy or fuel is threatened or disturbed in such amount 
that energy suppliers can not forecast and eliminate such threats and disturbances by means of 
economic activity methods.  

Bulgaria defines the outage regime within the national territory as a temporary interruption or 
limitation of natural gas generation or supply in cases such as "force majeure"; occurrence, or 
for  prevention,  and  breakdowns  of  facilities  for  natural  gas  production,  transmission  and 
distribution.  

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Romania defines the urgent situation at the national level if the major supplier lost 20% of 
gas volumes through decreased gas import, or from internal production caused by accident.  

Finland  defines  the  emergency  condition  as  a  serious  threat  by  hampered  or  interrupted 
import indispensable fuels and other energy. 

UK defines 5 stages of emergency, and categorise into these 5 stages most expected events. 
These events are also classified if the emergency stage is related to insufficient gas supply or 
transportation  constraint.  The  first  stage  is  defined  as  potential  emergency  stage.  UK  has 
defined also a Protocol setting the order of demand reduction of different customers.  

Portugal defines the energy crisis situation as a difficulty of supply or distribution of energy, 
which requires exceptional measures designed for to ensure supplies for citizens' fundamental 
needs, defence, operations of state and of priority sectors of economy. 

9.3. 

Emergency measures used by Member States 

If different gas consumption level than a normal one is declared, Member States have in their 
legislation predefined specific steps, to be followed by all market players as defined. Some of 
them are similar to the instruments described in the Annex of the Directive, but others are of a 
different origin. 

Changing the responsibilities and the roles of market players – the main control is given 
to  the  market  player,  who  is  capable  to  deal  with  gas  supply  disruption,  usually  TSO. 
Sometimes his responsibility stay, sometimes it changes according the ability how the market 
player can deal with the gas supply disruption. It is also possible to have different responsible 
bodies for different levels of emergency.  

If the supplier is not able to fully ensure its gas supply because of changed market conditions 
to  other  than  normal  level,  system  operator  is  declared  to  be  responsible  for  and  to  take 
adequate measures.  

Reduction of gas demand is one of the measures used by Member States, who introduced the 
emergency scale and national emergency plans. The reduction of gas consumption is defined 
for every emergency level. This reduction depends on the volume of interruptible contracts, 
importance  of  the  gas  consumption  for  the  industry,  economic  impact  of  the  cut-off  gas, 
season when disruption happens, fuel-switch possibility, volume of gas in gas storages, etc.  

The order, in which the gas is reduced, defines the order of action (levels in emergency scale). 
One  of  the  first  steps  of  the  gas  demand  reduction  is  the  cutting  of  the  gas  supply  to  the 
interruptible customers. These are usually industry type customers, who have interruptible 
contracts of gas supply. In some Member States (UK, Germany, France, Romania), industrial 
market players introduced voluntary interruptible contracts.  

Specific  legislation,  protocols,  and  guidelines  are  defined  –  Energy  Security  Act,  special 
decrees of national emergency measures, technical standards to deal with supply disruption, 
emergency protocols, or any other specific documents have been adopted by Member States.  

Gas  stocks  are  usually  used  as  one  of  the  first  emergency  measures  to  act,  also  in  pre-
emergency levels. Some Member States have defined mandatory gas stocks for suppliers to be 
held.  Other  Member  States  connected  directly  the  available  gas  stocks  with  the  security  of 

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supply  standards,  and  these  gas  stocks  shall  be  primarily  used  for  households  in  case  of 
emergency measure. Gas stocks are used also to maintain the quality of delivered gas and for 
the balancing of the gas network.  

In case of gas supply disruption or gas reduced supplies in the national system, linepack of 
the gas system, gas stocks, and maximisation of gas supplies (production) are the measures 
used from the point of maximisation of gas supply to the network. From the gas demand side, 
the reduction of gas demand is also used according the order of gas demand reduction. If the 
situation is critical, strategic gas stocks could be also used in some countries. 

Changing  rules  to  access  the  gas  network  -  If  the  emergency  situation  is  declared,  some 
Member States have defined in their national legislation change of the access rules to the gas 
system, in favour of the predefined categories of gas customers.  

Diversification of gas supplies and routes has been introduced by Spain, which set that no 
more than 60% of total gas imports will be supplied by the same country and no more than 
70% of total gas demand will be supplied by the same shipper. The similar approach is also in 
Poland and Portugal. Also other countries has developed and diversified their gas supplies and 
gas routes, but the diversification is not directly mentioned in the gas market legal framework, 
but only in general in the national energy policies.  

Conclusion 

Specific  and  proper  analysis  of  all  emergency  measures  used  by  Member  States  is  needed. 
Country peer reviews of their emergency measures, plans and procedures could indicate the 
best  practices  and  the  most  used  means,  which  should  be  shared  in  the  Gas  Coordination 
Group. It would be useful to work out on the European emergency scale, which will define 
nominal,  prevention  and  emergency  stages,  giving  indications  which  measures  should  be 
used, based on the best practices in national and regional circumstances. All this will help to 
create the European guidelines to deal with emergency in gas supply.  

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10. 

MONITORING AND REPORTING (ART. 5/6) 

The Directive includes also the monitoring and reporting provisions. The Article 6(3) of the 
Directive  2004/67/EC  asks  to  review  the  monitoring  provisions  implementation  experience 
"By 19 May 2008 the Commission shall submit a review report to the European Parliament 
and the Council on the experience gained from the application of this Article." 

10.1.  Reporting to the Commission 

Article  5  of  the  Directive  obliges  Member  States  to  report  to  the  Commission  relevant  and 
important security of gas supply information, defined as the additional information to the ones 
set  out  for  the  internal  market  report  pursuant  to  the  Article  5  of  the  gas  market  directive 
2003/55/EC.  According  the  Article  5  of  the  gas  market  directive  2003/55/EC,  the  Member 
States have to report on 

•  the supply/demand balance on the national market,  

•  the level of expected future demand and available supplies,  

•  envisaged additional capacity being planned or under construction,  

•  the quality and level of maintenance of the networks, and 

•  measures to cover peak demand and to deal with shortfalls of one or more suppliers.  

According  the  Article  5  of  the  Directive  2004/67/EC,  the  Member  States  have  to  report  the 
additional information on 

•  the competitive impact of the measures taken pursuant to Articles 3 and 4 of the Directive 

2004/67/EC on all gas market players;  

•  the levels of storage capacity;  

•  the  extent  of  long-term  gas  supply  contracts  concluded  by  companies  established  and 

registered on their territory, and in particular  

•  their  remaining  duration,  based  on  information  provided  by  the  companies 

concerned, but excluding commercially sensitive information, and  

•  the degree of liquidity of the gas market;  

•  the  regulatory  frameworks  to  provide  adequate  incentives  for  new  investment  in 
exploration and production, storage, LNG and transport of gas, taking into account Article 
22 of Directive 2003/55/EC as far as implemented by the Member State. 

The  table  below  shows  how  Member  States  provided  the  necessary  information  in  their 
national internal market reports for the year 2007. 

Quality and details of the information provided 

Directive 

Provided 

Not Provided 

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Competitive impact of Security of supply measures 

2004/67 

Storage capacity 

Long-term supply contracts remaining duration 

Degree of liquidity 

Incentive new investments  

Planned additional capacity 

Level of maintenance of the networks 

Supply / demand balance 

Expected future demand and available supplies 

2004/67 

2004/67 

2004/67 

2004/67 

2003/55 

2003/55 

2003/55 

2003/55 

Measures to cover peak demand and supplier shortfalls 

2003/55 

8 

13 

4 

3 

3 

19 

6 

18 

13 

6 

17 

12 

21 

22 

22 

6 

19 

7 

12 

19 

According the Article 5(2) of the Directive 2004/67/EC "This information shall be considered 
by the Commission in the reports that it issues pursuant to Article 31 of Directive 2003/55/EC 
in  the  light  of  the  consequences  of  that  Directive  for  the  Community  as  a  whole  and  the 
overall efficient and secure operation of the internal gas market.". 

Not all MS have all information in the reports as mandated by the Directive. The provisions 
mandated by 2004/67/EC Directive are not included in the 2007 reports of Belgium, Finland, 
Greece,  Latvia,  Luxembourg,  Portugal,  and  Slovenia.  This  has  occurred  possibly  due  to  the 
fact  that  the  security  of  gas  supply  has  been  imposed  on  the  different  entities  than  the  ones 
responsible  for  the  reporting  related  to  the  internal  market.  The  Commission  benchmarking 
report8  concluding  the  2007  internal  market  reports  from  Member  States  describes  the 
information  on  security  of  gas  supply.  Member  States  provided  further  information 
concerning  the  issues  to  be  monitored  (long-term  contracts  and  storage  capacity)  in  the 
framework of the Gas Coordination Group as replies to a questionnaire.  

10.2. 

Monitoring of security of gas supply  

According the Article 6(1) of the Directive, the Commission shall monitor, on the basis of the 
reports referred to in Article 5(1):  

•  the degree of new long-term gas supply import contracts from third countries; 

•  the existence of adequate liquidity of gas supplies; 

•  the level of working gas and of the withdrawal capacity of gas storage; 

•  the level of interconnection of the national gas systems of Member States; 

8 

Benchmarking report 2007, April 2008 

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•  the foreseeable gas supply situation in function of demand, supply autonomy and available 
supply  sources  at  Community  level  concerning  specific  geographic  areas  in  the 
Community. 

Quality and detail of the information provided 

Provided  

Not Provided  

Long term contracts and their remaining duration 

Adequate liquidity on the market 

Underground gas storage  

Import dependency 

Interconnection level 

21 

3 

20 

21 

21 

4 

22 

5 

4 

4 

To  fulfil  the  monitoring  obligation  (see  chapter  above),  the  Commission  distributed  a 
questionnaire in the Gas Coordination Group, which enabled to gather the necessary missing 
information.  The  table  above  shows,  that  not  all  Member  States  (Belgium,  Latvia, 
Luxemburg,  Poland,  Portugal)  have  fulfilled  the  obligation  to  provide  the  necessary 
information.  However,  Commission's  monitoring  obligation  extends  beyond  the  scope  of 
information, which is provided by Member States in the internal markets reports.  

How the parameters are monitored 

Degree  of  new  long-term  gas  supply  import  contracts  from  third  countries  shall  be 
monitored according the Article 5(1)c of the Directive as "the extent of long-term gas supply 
contracts  concluded  by  companies  established  and  registered  on  their  territory,  and  in 
particular  their  remaining  duration,  based  on  information  provided  by  the  companies 
concerned,  but  excluding  commercially  sensitive  information,  and  the  degree  of  liquidity  of 
the gas market".  

If only the extent of long-term contracts is reported by Member States, it is not clear that it 
includes also volumes of imported gas to be reported. Thus the Commission asked Member 
States  for  the  additional  information  on  long-term  contracts  durations  from  third  countries. 
The  duration  of  long-term  contracts  and  their  impact  to  internal  gas  market,  security  of  gas 
supply and market liquidity are mentioned in Chapter 6.3.  

Adequate  liquidity  of  gas  supplies  has  also  to  be  monitored,  but  this  information  was 
included only in three reports (Belgium, Germany, and the Netherlands). The reason for this 
lack in the reporting could be the missing definitions of gas market liquidity and gas supplies 
liquidity or the confusion with the mandate from the 2003/55 directive to report the level of 
gas  market  liquidity.  Market  transparency  is  also  very  low,  thus  the  ratio  between  the  spot 
operations and long-term contract based operations is not known.  

Levels of working gas and of the withdrawal capacity of gas storage, as well as level of 
interconnection of the national gas systems are not asked to report by Member States, but 
only monitor by the Commission. These parameters were also asked in the questionnaire.  

EN 

55 

   EN 

 
 
Foreseeable gas supply situation in function of demand, supply autonomy and available 
supply  sources  at  Community  level  concerning  specific  geographic  areas  in  the 
Community are three separate parameters to monitor.  

Some Member States reported about their future gas demand scenarios, linked to the projects 
to  ensure  the  gas  supply.  To  have  a  complete  picture,  Commission  needs  more  information 
from Member States.  

Commission  monitors  some  geographic  areas  from  both  availability  of  supply  sources,  and 
their  supply  autonomy  in  case  of  supply  disruption.  For  example  the  countries  in  various 
pipeline  chains  from  Russia  were  assessed  in  the  Gas  Coordination  Group,  how  the  partial 
disruption could affect them. The vulnerability of some regions (Baltic countries, or Western 
Balkans gas route) has been identified.  

Conclusions 

Member States reporting obligations are set out in two gas Directives. This obligation, even 
if properly reported by Member States, does not allow the Commission to monitor the security 
of  gas  supply  (at  least  the  parameters  pursuant  to  the  Article  6(1)  of  2004/67/EC)  at  the 
European  internal  market.  However,  Member  States  have  not  prepared  their  annual  internal 
market report in a proper way and many of the mandated information are not included in these 
reports. As a consequence, the Commission had to prepare additional questionnaires and data 
tables to fulfil its monitoring obligation, which created an additional administrative burden for 
both Commission and Member States.  

The obligation, what to monitor, is not sufficient to assess neither the current long-term and 
short-term, nor any future security of supply situation of the EU and the effectiveness of the 
mitigation tools. Reporting obligations are limited in frequency and scope (only once a year, 
mainly focusing on long-term contracts and storage, no information is provided on mitigating 
tools  like  the  extent  of  fuel  switch/interruptible  contracts,  capacity  utilisation,  alternative 
routes  or  supply  flexibility  in  indigenous  production  or  import  contracts).  And  even  these 
reporting  obligations  are  not  fulfilled  by  all  Member  States  (only  three  Member  States 
provided complete reporting). A greater transparency is needed. 

EN 

56 

   EN 

 
ANNEX 1: Distribution of responsibility for security of gas supply in Member States  

Overall responsibility 
Joint  (Ministry,  Regulator,  Dispatch 
centre) 
Ministry 

LNG responsibility 

system operator 

system operator 

Ministry 

Exempted 

TSO 

TSO 

TSO 

Regulator 

Government 

Supplier (Regulator in crisis) 

not set 

Exempted 

not set 

system operator 

system operator 

system operator 

system operator 

system operator 

Joint – Ministry and Regulator 

system operator 

Supplier  

Regulator 

Ministry 

Ministry 

Ministry 

Ministry 

Ministry 

Ministry 

Malta 

Ministry to regulator 

Netherlands 

TSO 

not set 

system operator 

system operator 

not set 

system operator 

not set 

system operator 

system operator 

system operator 

system operator 

Coordination Commission 

not set (LNG not in use) 

Ministry 

Ministry 

Ministry 

Regulator 

not set 

not set 

system operator 

system operator 

Member States 

Austria 

Belgium 

Bulgaria 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxemburg 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Joint - Ministry and Regulator 

system operator 

EN 

57 

   EN 

 
 
 
ANNEX 2: Member States definition of parameters for security of supply standards  

Member 
States 

Austria 

Belgium 

Bulgaria 

Czech 
Republic 

Denmark 

Estonia 

Partial /major 
disruption 

Technical 
disruption (partial) / 
to be determined 

20% 

Technical 
disruption  (partial), 
20% major 

Time period    Winter period 

1-in-20  

1-in-50 

Peak days 

During 
emergency  

48 hours 

8 weeks 

60days 

To 
Determined 

be 

1.10-31.3 

y 

y 

y 

y 

Y20 

Y20 

To 
Determined 

be 

5 days 

3 days 

Max 72 hours 

1.10-1.5 

y 

Just  deliver  the 
gas 

Just  deliver  the 
gas 

Finland 

miss 1 supplier 

4 months 

1.10-30.4 

France 

miss 1 supplier 

6 months  

Y50 

Y50 

3 days 

Germany 

Greece 

Load Shedding Plan 

Hungary 

Ireland 

To be Determined 

Italy 

Latvia 

1/3 of citizens 

Lithuania 

Shortfall  of  one  or 
more suppliers 

Luxemburg  To be Determined 

Malta 

To be Determined  

Netherland
s 

Poland 

To 
Determined 
45 
days 
stocks 
To 
Determined  

be 

of 

be 

10 
of 
days 
stocks  (to  max 
60) 
To 
Determined 
To 
Determined 

be 

be 

30 days of stock 

Long  and  cold 
winter (2005-6) 
To 
be 
Determined 

1.11-31.3 

To 
Determined 

be 

15.11-31.3 

1.9- 

To 
Determined 
To 
Determined 

be 

be 

Portugal 

certain 

certain 

certain 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

Romania 

20%  of  import,  or 
production,  or  20% 
higher gas demand 

Long period 

1.10-31.3 

Y20 

Y20 

Slovakia 

Slovenia 

30% 

20% 

10 weeks 

1.10-31.3 

14 days 

1.12-28(29).2 

y 

y 

Spain 

1  entry  point,  n-1 
criterion  

Sweden 

United 
Kingdom 

for 
Obligation 
sufficient  capacity 
during  1-in-20  and 
have enough gas for 
1-in-50 

35 
of 
days 
stocks  of  strong 
may 
sales, 
increase 
to  60 
days  

Winter plan 

1.12-28.2 

- 

- 

10% 

y 
over 
capacity  

y 

y 

y 

y 

y 

y 

y 

To 
Determined 

be 

To 
Determined 

be 

be 

To 
Determined 
To 
Determined 
Set  by  SO  as 
needed 

be 

certain 

5 days 

Estimate 
winter 
predicted 

in 
plan, 

1day 

1 or more days 

EN 

58 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 3: Member States use of security of gas supply instruments 

. 

Member States 

Storage 

Diversity 
-source,  -
mix, 
supplier,  

Support 
Investme
nt  

LT 
contracts 

flexibility 
-
–prod, 
import, 

Interrupt 
contract  

Fuel 
switch 

Cross 
border 
capacity 
plan 

Cooperat
ion-TSOs 
-DSO-
TSO  

Austria 

Belgium 

Bulgaria 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxemburg 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

y 

y 

y 

y 

n 

y 

n 

y 

y 

n 

y 

y 

y 

y 

y 

n 

y 

y 

y 

y 

y 

y 

y 

n 

yny 

yyy 

nny 

yyy 

nny 

nny 

nny 

yyy 

yyy 

yyy 

nny 

nny 

yyy 

nny 

nny 

yyy 

yyy 

yyy 

yyy 

yyy 

nny 

yyy 

yyy 

nny 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

n 

y 

y 

y 

y 

y 

y 

n 

y 

y 

y 

y 

y 

y 

n 

y 

y 

y 

n 

y 

59 

EN 

.y 

.y 

.y 

.y 

y. 

.y  

.y  

.y  

yy 

.y  

.y 

nn 

yy 

.y 

.y 

.y  

y. 

yy 

.y  

yy 

.y  

.y  

.y 

.y 

y 

y 

y 

n 

y 

y 

y 

y 

y 

n 

y 

n/a 

y 

y 

y 

y 

y 

y 

n 

y 

y 

y 

n 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

n 

n 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

y 

yy 

yy 

yy 

yy 

y 

yy 

yy 

y 

y 

y 

yy 

y 

yy 

y 

yy 

yy 

yy 

yy 

y 

yy 

y 

y 

yy 

y 

   EN 

 
 
 
 
 
 
 
 
United Kingdom 

y 

yyy 

y 

y 

yy 

y 

y 

y 

yy 

EN 

60 

   EN 

 
ANNEX 4: Fuel switch possibility and interruptible contracts 

. 

Country 

Austria 

Bulgaria 

Belgium 

fuel switch 

Interruptible contracts 

Y (Share not known) 

Y (Share not known) 

Y  

N 

Y (15% of industry) 

Y (30%industry) 

Czech Republic 

Y 

Y 

Denmark 

Y (7,5% of consumption) 

Y (50% industry, 40% power generation) 

Estonia 

Finland 

France 

Y (heat supply 3 days) 

Y (90% of consumption) 

Y 

? 

Y (6 % of consumption) 

Y (25% industry, 25% power generation) 

Germany 

Y (10-15% of consumption) 

Y (10% industry, 20% power generation) 

Greece 

Hungary 

Italy 

Ireland 

Latvia 

Lithuania 

Luxembourg 

Netherlands 

Poland 

Portugal 

Romania 

Y (35-40% of consumption) 

N 

Y (gas power plants >50MW)  Y10% industry, 50%power 

Y (9% of consumption) 

Y1% power, 10% industry 

Y  (all  gas  fired  power  plants 
for 5 days) 

Not required 

Y (Share not known) 

Y (Share not known) 

(all  heat  and  power 
Y 
producers with production for 
public sector for one year) 

N 

? 

N 

? 

Y (Share not known) 

Y (Share not known) 

Y (25% power generation from H-gas) 

Y (10% industry, all gas power) 

? 

Y (Share not known) 

Y (Share not known) 

Slovak Republic  N 

N 

Slovenia 

Spain 

Sweden 

UK 

Y (18% of consumption) 

Y (approx. 10% industry) 

? 

Y (5% industry, 25% power generation) 

Y (30-40% of consumption) 

? 

Y  (power  stations  -  10mcm 
for 4 days, industry - 1mcm) 

Y (10% industry, 30% power generation) 

EN 

61 

   EN 

 
ANNEX 5: The role of gas in EU and Member States  

All figures are calculated from the 2007 Eurostat figures 

•  Energy mix is based on the Gross Inland Consumption as defined by Eurostat 

•  Electricity mix expresses the sources used for electricity production as defined by Eurostat 

•  Role of gas is based on the total volume of gas (GIC) divided by all types of use of gas as 

defined by Eurostat. The right column expresses the Final Energy Consumption.  

•  Source of natural gas means the total volume of gas available on the market, calculated as 
a "total import to the country" plus "indigenous production". Other two important figures – 
Stocks change and Total Export were not possible to incorporate into this chart type, thus 
both  are  included  below  the  graphic  to  enable  the  calculation  of  the  Gross  Inland 
Consumption.  

–  EU-27 chart takes only into account volume of gas imported to the EU (Extra-EU import).  

EN 

62 

   EN 

 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN EU-27 (2007) 

 Renewables
141,03
8%

    Nuclear
241,26
13%

    Gas
432,41
24%

    So lid fuels
331,23
18%

    Oil
656,93
37%

Renewables
525,58
16%

Nuclear
935,28
28%

Other
39,81
1%

Coal
988,37
29%

Oil
112,48
3%

Gas
760,18
23%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (%)(2007) 

Energy sector 
consumption
4%

Chemical non-
energy use
3%

District Heating
1%

Power 
Generation
32%

s
a
G

f
o

e
s
U

%
1
6

l

a
n
F

i

Households
26%

Industry
21%

Services
12%
Transport
0%

Others
1%

EU 
indigenous; 
7785401; 
40,4%

Other; 
320733; 1,7%

Egypt; 
221305; 1,1%

Qatar; 
275496; 1,4%

Libya; 
383615; 2,0%

Russia; 
4685365; 
24,3%

Norway; 
3061751; 
15,9%

Algeria; 
1943976; 
10,1%

Nigeria; 
588317; 3,1%

St k h

206703TJ E

t ?TJ

Gas Import dependency (%)

BE BG CZ DK DE EE IE EL ES FR IT CY LT LV LU HU MT NL AT PL PT

RO SI

SK FI

SE UK

EU27

1990

2007

120

100

80

60

40

20

0

-20

-40

-60

-80

-100

-120

EU  gas  import  dependency  increases  from  45%  in  1990  to  60%  in  2007,  peaking  in  2006.  Gas  import 
dependency is around 100 % in 15 Member States, e.g. all or nearly all gas is imported. Denmark and the 
Netherlands are the only gas net exporters. Ireland, Greece and Portugal started to import gas after 1990.  

EN 

63 

   EN 

 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN AUSTRIA (2007) 

Renewables
8,04
25%

    Gas
6,98
21%

    Solid fuels
3,85
12%

    Oil
13,89
42%

Other
2,82
4%

Coal
6,26
10%

Oil
1,28
2%

Gas
11,20
18%

Renewables
41,87
66%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Chemical 
Industry
3%

Energy sector 
consumption
6%

District Heating
2%

Power 
Generation
29%

s
a
G

f
o

e
s
U

%
0
6

l

a
n
F

i

Others
106514
23%

Indigeno us
73899
16%

No rway
56674
12%

Russia
216419
49%

Stocks change:-12122TJ, Export=-116704TJ 

Households
18%

Industry
35%

Services
7%

Transport
0%

Others
0%

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN BELGIUM (2006) 

Renewables
1,79
3%

    So lid fuels
4,61
8%

    Nuclear
12,44
22%

    Gas
14,93
26%

    Oil
22,63
41%

Other
2,08
2%

Co al
6,47
7%

Renewables
3,99
4%

Oil
0,81
1%

Gas
27,24
31%

Nuclear
48,23
55%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Chemical non-
energy use
6%

Energy sector 
consumption
1%

District Heating
0%

Power 
Generation
28%

EN 

s
a
G

f

o

e
s
U

%
4
6

l

a
n
F

i

Qatar
87502
13%

Others
17231
2%

United 
Kingdom
36792
5%

Russia
31528
5%

Nether-  
lands
274535
40%

Algeria
15343
2%

Norway
230194
33%

Stocks change:1350TJ, Export=0TJ 

Households
22%

Industry
32%

Services
10%

Transport
0%

Others
1%

64 

   EN 

 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN BULGARIA (2007) 

Renewables
0,96
5%

    Nuclear
3,78
18%

    Gas
3,01
15%

    Solid fuels
7,84
37%

    Oil
5,07
25%

Chemical non-
energy use
15%

District Heating
7%

ROLE OF GAS (%) 
Energy sector 
consumption
11%

s
a
G

f
o

e
s
U

%
2
4

l

a
n
F

i

Power 
Generation
26%

Households
1%

Industry
30%

Services
3%

Transport
1%

Others
6%

Renewables
2,92
7%

Other
0,37
1%

Nuclear
14,64
34%

Co al
22,37
51%

Gas
2,43
6%

Oil
0,57
1%

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Indigenous

10966

8%

Russia

128088

92%

Stocks change:991TJ, Export=0TJ 

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN CZECH REPUBLIC (2007) 

Renewables
2,18
5%

    Nuclear
6,75
14%

    Gas
7,16
15%

    Oil
10,04
21%

    Solid fuels
21,38
45%

Renewables
3,42
3,9%

Other
0,43
0,5%

Coal
53,80
61,0%

Nuclear
26,17
29,7%

Gas
4,26
4,8%

Oil
0,12
0,1%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
2%

District Heating
7%

Power 
Generation
6%

EN 

s
a
G

f

o

e
s
U

%
7
8

l

a
n
F

i

Indigenous

6524

2,0%

No rway
68335
20,5%

Russia
259008
77,6%

Stocks change:14464TJ, Export=-15196TJ

Households
28%

Industry
36%
Services
18%

Transport
0%

Others
3%

65 

   EN 

 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN DENMARK (2007) 

Renew able
3,56
17%

Gas
4,06
20%

 Solid fuels
4,65
23%

Oil
8,32
40%

Renewables
11,06
28%

Gas
6,91
18%

Oil
1,11
3%

Coal
19,90
51%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
16%

District Heating
3%

Power 
Generation
40%

s
a
G

f
o

e
s
U

%
3
4

l

a
n
F

i

Indigeno
us 
384607 
100%

Stocks change:- 7283TJ, Export=-188377TJ 

Households
15%

Industry
19%

Services
7%

Others
0%

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN ESTONIA (2007) 

 Renewables
0,60
10%

    Gas
0,80
13%

    Oil
1,16
18%

Gas
0,59
4,8%

Oil
0,03
0,3%

Renewables
0,15
1,2%

    Solid fuels
3,71
59%

Coal
11,42
93,7%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007)  

Chemical non-
energy use
21%

Energy sector 
consumption
1%

s
a
G

f

o

e
s
U

%
7
2

l

a
n
F

i

District Heating
39%

Russia
37372
100%

Households
6%

Industry
15%

Services
6%
Transport
0%

Power 
Generation
12%

Others
0%

Stocks change:0TJ, Export=0TJ

EN 

66 

   EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN FINLAND (2007) 

Renewables
8,52
23%

    Solid fuels
7,21
20%

    Nuclear
6,04
17%

    Gas
3,72
10%

    Oil
11,01
30%

Other
0,42
1%

Renewables
24,43
29%

Nuclear
23,42
29%

Co al
21,37
26%

Oil
0,47
1%

Gas
11,13
14%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Chemical non-
energy use
6%

Energy sector 
consumption
9%

District Heating
8%

s
a
G

f
o

e
s
U

%
3
2

l

a
n
F

i

Power 
Generation
54%

Households
1%

Industry
21%

Services
1%

Transport
0%

Others
0%

Russia
173166
100%

Stocks change:0TJ, Export=0TJ 

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN FRANCE (2007) 

Renewables
18,96
7%

    Solid fuels
13,39
5%

Other
5,48
1%

Coal
24,45
4%

Oil
6,16
1%

Renewables
68,29
12%

    Oil
90,90
33%

    Gas
38,48
14%

Gas
25,74
5%

Nuclear
439,73
77%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

s
a
G

f

o

e
s
U

%
9
7

l

a
n
F

i

Households
33%

Industry
23%

Services
21%

Transport
0%

Others
2%

Indigeno us
42586
2%

Others
164850
9%

Nigeria
126113
7%

Russia
238022
14%

A lgeria
312356
18%

No rway
551378
32%

Nether-
lands
324846
18%

Stocks change:20287TJ, Export=-36192TJ

    Nuclear
113,43
41%

Energy sector 
consumption
1%

Chemical non-
energy use
5%

Power 
Generation
15%

EN 

67 

   EN 

 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN GERMANY (2007) 

Renewables
28,11
8%

    Nuclear
36,25
11%

    Gas
76,64
22%

    Solid fuels
86,97
26%

    Oil
112,73
33%

Renew able
93,77
15%

Nuclear
140,53
22%

Gas
84,12
13%

Other
7,62
1%

Coal
299,79
47%

Oil
11,27
2%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
1%

Chemical non-
energy use
3%

District Heating
1%

Power 
Generation
23%

s
a
G

f
o

e
s
U

%
3
7

l

a
n
F

i

Others
109134
3%

Russia
1436060
36%

Indigenous
598741
15%

Nether-  
lands
737589
19%

Norway
1040911
27%

Stocks change:93960TJ, Export=-450935TJ 

Households
35%

Industry
23%

Services
13%

Others
1%

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN GREECE (2007) 

Renewables
1,68
5%

    Gas
3,35
10%

    So lid fuels
10,84
33%

    Oil
17,24
52%

ROLE OF GAS (%) 

Chemical non-
energy use
4%

Energy sector 
consumption
1%

s
a
G

f

o

e
s
U

%
2
2

l

a
n
F

i

Power 
Generation
74%

Renewables
4,59
7%

Other
0,81
1%

Co al
34,68
55%

Gas
13,77
22%

Oil
9,64
15%

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Algeria
36319
23%

Indige-
nous
1026
1%

Russia
118819
76%

Stocks change:-336TJ, Export=0TJ

Households
5%

Industry
12%

Services
3%

Transport
0%

Others
1%

EN 

68 

   EN 

 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN HUNGARY (2007) 

Renewables
1,42
5%

    Nuclear
3,79
14%

    Gas
10,70
40%

    Solid fuels
3,14
12%

    Oil
7,61
29%

ROLE OF GAS (%) 
Energy sector 
consumption
1%

s
a
G

f
o

e
s
U

%
9
5

l

a
n
F

i

Chemical non-
energy use
4%

District Heating
4%

Power 
Generation
31%

Households
30%

Industry
12%

Services
16%

Transport
0%

Others
2%

Renewables
2,02
5,1%

Other
0,01
0,0%

Nuclear
14,68
36,7%

Co al
7,37
18,4%

Oil
0,54
1,3%

Gas
15,35
38,4%

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Indigeno us
93251
19%

Others
6090
1%

Russia
300491
60%

CIS
66357
13%

France
14340
3%

Germany
18144
4%

Stocks change:6650TJ, Export=-7334TJ 

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN IRELAND (2007) 

Renewables
0,47
3%

    Gas
4,28
27%

    Solid fuels
2,29
15%

    Oil
8,73
55%

Other
0,35
1%

Renewables
2,76
10%

Gas
15,46
55%

Coal
7,67
27%

Oil
1,98
7%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Chemical non-
energy use
0%

s
a
G

f
o

e
s
U

%
7
3

l

a
n
F

i

Power 
Generation
62%

Households
14%

Industry
15%

Services
8%

Transport
0%

Others
1%

Indige-
nous
17181
9%

United 
Kingdom
182153
91%

Stocks change:-50TJ, Export=0TJ 

EN 

69 

   EN 

 
 
 
 
 
    
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN ITALY (2007) 

Renewables
12,69
7%

    So lid fuels
16,79
9%

    Gas
69,53
39%

    Oil
80,34
45%

Co al
44,11
14%

Oil
35,41
11%

Other
6,87
2%

Renewables
49,23
16%

Gas
178,27
57%

ROLE OF GAS (%) 
Energy sector 
consumption
1%

s
a
G

f

o

e
s
U

%
9
5

l

a
n
F

i

Chemical non-
energy use
1%

Power 
Generation
40%

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Others
146266
5%

No rway
212636
7%

Libya
352082
11%

Indige-
no us
369799
12%

Nether-  
lands
306248

A lgeria
936650
28%

Russia
863613
27%

Stocks change:49873TJ, Export=-2591TJ 

Households
23%

Industry
23%

Services
10%

Transport
1%

Others
1%

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN LATVIA (2007) 

    Solid fuels
0,11
2%

    Oil
1,62
37%

Renewables
1,41
31%

    Gas
1,36
30%

Oil
0,02
0,4%

Renewables
2,83
59,3%

Gas
1,92
40,3%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

District Heating
15%

Energy sector 
consumption
1%

s
a
G

f

o

e
s
U

%
8
3

l

a
n
F

i

Power 
Generation
45%

EN 

Households
8%

Industry
21%

Services
10%

Transport
0%

Others
0%

70 

Russia
61201
100%

Stocks change:2046TJ, Export=0TJ 

   EN 

 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN LITHUANIA (2007) 

Renewables
0,81
9%

    Nuclear
2,54
27%

    Solid fuels
0,27
3%

    Oil
2,76
30%

    Gas
2,89
31%

Oil
0,41
3%

Gas
2,41
17%

Other
0,77
5%

Coal
0,01
0%

Renewables
0,58
4%

Nuclear
9,83
71%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Chemical non-
energy use
39%

Energy sector 
consumption
1%

s
a
G

f
o

e
s
U

%
9
1

l

a
n
F

i

District Heating
10%

Power 
Generation
31%

Russia
138425
100%

Households
5%

Industry
10%

Services
4%

Others
0%

THE ROLE OF GAS IN LUXEMBOURG (2007) 

Stocks change:-3907TJ, Export=0TJ

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

Renewables
0,12
3%

    Solid fuels
0,08
2%

    Gas
1,20
28%

    Oil
2,92
67%

Other
0,81
20%

Renewables
0,30
7%

Gas
2,90
73%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Power 
Generation
40%

s
a
G

f

o

e
s
U

%
9
5

l

a
n
F

i

Households
26%

Industry
34%

Services
0%

Others
0%

Total 
import 
55948 
100%

Stocks change:0TJ, Export=0TJ 

EN 

71 

   EN 

 
    
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
THE ROLE OF GAS IN THE NETHERLANDS (2007) 

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

Renewables
3,02
4%

    Nuclear
1,08
1%

    Gas
33,40
40%

    So lid fuels
8,36
10%

    Oil
37,17
45%

Renewables
9,15
9%

Nuclear
4,20
4%

Other
0,18
0%

Co al
24,92
24%

Oil
2,22
2%

Gas
62,58
61%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
4%

Chemical non-
energy use
7%

District Heating
1%

Power 
Generation
33%

s
a
G

f
o

e
s
U

%
5
5

l

a
n
F

i

Households
20%
Industry
16%

Services
19%

Transport
0%

Others
0%

Germany
710891
21%

B elgium
146823
4%

Indigeno us
2547408
75%

Stocks change:905TJ, Export=-1855907TJ 

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN POLAND (2007) 

Renewables
4,99
5%

    Gas
12,38
13%

    Oil
25,06
26%

    Solid fuels
55,51
56%

Renewables
5,43
3%

Other
0,92
1%

Gas
5,12
3%

Oil
2,30
1%

Co al
145,57
92%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
11%

Chemical non-
energy use
15%

District Heating
2%

Power 
Generation
8%

s
a
G

f

o

e
s
U

%
4
6

l

a
n
F

i

Indigenous
181274
33,50%

CIS
66573
12,30%

Households
26%

Industry
25%

Services
13%

Others
0%

Russia
260533
48,15%

Germany
32679
6,04%

Stocks change:10743TJ, Export=-1677TJ

EN 

72 

   EN 

 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN PORTUGAL (2007) 

Renewables
4,58
18%

    Gas
3,81
15%

    Solid fuels
2,89
11%

    Oil
14,05
56%

Other
0,36
1%

Co al
12,40
26%

Oil
4,87
10%

Renewables
16,50
35%

Gas
13,12
28%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
2%

s
a
G

f
o

e
s
u

%
9
3

l

a
n
F

i

Power 
Generation
59%

Algeria
59536
34%

Households
6%

Industry
27%

Services
5%
Transport
0%

Others
1%

Nigeria
115411
66%

THE ROLE OF GAS IN ROMANIA (2007) 

Stocks change:2218TJ, Export=0TJ 

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

Renewables
4,75
12%

    Nuclear
1,99
5%

 Gas
12,98
32%

    Solid fuels
10,19
25%

    Oil
10,25
26%

Renewables
16,01
26%

Nuclear
7,71
12%

Coal
25,10
41%

Gas
11,77
19%

Oil
1,10
2%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
6%

Chemical non-
energy use
7%

District Heating
4%

Power 
Generation
27%

s
a
G

f
o

e
s
u

%
5
5

l

a
n
F

i

Households
16%

Industry
26%

Services
9%
Transport
0%

Others
5%

Indigeno us
429507
70%

Russia
164124
27%

CIS
15678
3%

Stocks change:-5387TJ, Export=0TJ

EN 

73 

   EN 

 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN SLOVAKIA (2007) 

Renewables
0,99
6%

    Solid fuels
4,01
22%

    Oil
3,85
22%

    Nuclear
3,96
22%

 Gas
5,09
28%

Other
0,22
1%

Coal
4,80
17%

Renewables
4,96
18%

Oil
0,71
3%

Gas
2,04
7%

Nuclear
15,33
54%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
12%

Chemical non-
energy use
6%

District Heating
9%

Power 
Generation
9%

s
a
G

f

o

e
s
U

%
4
6

l

a
n
F

i

Households
23%
Industry
19%

Services
19%

Transport
0%

Others
3%

Indigeno us 
5056
2%

Russia
238667
98%

Stocks change:0TJ, Export=-6967TJ

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN SLOVENIA (2007) 

Renewables
0,73
10%

    Solid fuels
1,61
22%

    Oil
2,59
35%

    Nuclear
1,47
20%

    Gas
0,91
13%

Renewables
3,38
22,4%

Nuclear
5,70
37,8%

Other
0,01
0,1%

Coal
5,48
36,4%

Oil
0,03
0,2%

Gas
0,45
3,0%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
0%

Chemical non-
energy use
14%

District Heating
5%

Power 
Generation
10%

s
a
G

f

o

e
s
U

%
2
7

l

a
n
F

i

Households
9%

Industry
61%

Services
1%

Others
0%

Indige-nous
120
0%

Austria
6980
16%

Others
109
0%

Algeria
13662
32%

Russia
21657
52%

Stocks change:0TJ, Export=0TJ

EN 

74 

   EN 

 
    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN SPAIN (2007) 

Renewables
10,29
7%

    Nuclear
14,21
10%

    Solid fuels
20,15
14%

    Gas
31,85
22%

    Oil
70,79
47%

Other
3,37
1%

Renewables
59,42
20%

Nuclear
55,10
18%

Coal
73,10
24%

Oil
18,51
6%

Gas
93,80
31%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Chemical non-
energy use
1%

Energy sector 
consumption
6%

Power 
Generation
43%

s
a
G

f
o

e
s
U

%
0
5

l

a
n
F

i

Households
12%

Industry
29%

Services
9%
Transport
0%

Others
0%

Others
48259
3%

No rway
88873
6%

Trinidad and 
To bago
87977
6%

Egypt
169042
12%

Qatar
178299
12%

Indigeno us
3744
0%

A lgeria
546332
37%

Nigeria
346793
24%

Stocks change:12573TJ, Export=0TJ 

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

THE ROLE OF GAS IN SWEDEN (2007) 

    Solid fuels
2,66
5%

    Oil
13,94
28%

    Gas
0,91
2%

Renewables
15,64
31%

    Nuclear
17,27
34%

Oil
1,08
0,7%

Other
0,50
0,3%

Coal
0,65
0,4%

Gas
1,48
1,0%

Renewables
78,17
52,5%

Nuclear
66,97
45,0%

ROLE OF GAS (%) 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
0%

District Heating
1%

Power 
Generation
31%

s
a
G

f
o

e
s
U

%
8
6

l

a
n
F

i

Denmark
42358
100%

Households
4%
Industry
39%

Services
13%

Transport
3%

Others
9%

Stocks change:0TJ, Export=0TJ 

EN 

75 

   EN 

 
    
 
 
 
 
    
 
 
 
 
 
 
 
 
THE ROLE OF GAS IN UNITED KINGDOM (2007) 

ENERGY MIX (in Mtoe, %) (2007) 

ELECTRICITY MIX (in TWh, %) (2007) 

Renewables
4,65
2%     So lid fuels

    Nuclear
16,26
7%

38,71
18%

    Oil
78,71
36%

    Gas
81,96
37%

Renewables
20,37
5%

Other
5,26
1%

Nuclear
63,03
16%

Gas
166,11
42%

Coal
136,69
35%

Oil
4,69
1%

ROLE OF GAS 

SOURCE OF NATURAL GAS (TJ,%)(2007) 

Energy sector 
consumption
7%

Chemical non-
energy use
1%

District Heating
2%

Power 
Generation
34%

s
a
G

f
o

e
s
U

%
7
5

l

a
n
F

i

Households
33%

Industry
13%
Services
9%

Others
1%

Indigenous
3019712
70%

Norw ay
812750
19%

Belgium
74729
2%

Algeria
23778
1%

Netherlands
275762
7%

Others
29873
1%

Stocks change:19728TJ Export= 443373TJ

EN 

76 

   EN