In a report published on Tuesday 7 March, the Centre on Regulation in Europe (CERRE) recommends reform of the gas sector in the EU – including revision of the regulatory framework, market design and network operation – if Europe is to benefit from the advantages gas can offer during the energy transition.
Gas, with a lower carbon content than coal and growing global growth in supply and with an ability to operate effectively as a back-up to intermittent renewable energy sources, can play a key role in Europe’s energy transition. The gas sector in Europe is currently under pressure, however, as a result of low prices for both coal and carbon, the report underlines.
In a raft of recommendations for regulatory and policy reform, CERRE stresses that EU energy regulation should take better account of short-term gas trading, especially at the interface with electricity markets.
Additionally, CERRE recommends enhanced cooperation and information flows between system operators in electricity and gas markets to allow gas to play a competitive role in energy markets.
It also calls for careful cost-benefit analysis for additional infrastructure investment when seeking to diversify gas import routes into the EU in order to enhance security of supply.
It argues for higher carbon prices under the emissions trading system (ETS) to ensure the long-term involvement of gas in the energy system since the low carbon content of natural gas is currently undervalued.
Lastly, CERRE underlines the need to encourage cost-effective and innovative gas products, such as biogas, biomethane, hydrogen, and CCS.
CERRE represents over 40 member organisations, including regulatory authorities, operators in the network industries and universities.
The report is available at: https://goo.gl/upBXEB (Original version in French by Emmanuel Hagry)