The Strategic Role of Underground Gas Storage Facilities: Legal Requirements for Third-Party Access

Summary

ABSTRACT

Natural gas storage plays a key role in maintaining the reliability of supply needed to meet consumer demand for energy. Apart from the significant role of strategic storage in ensuring Europe‘s security of supply, natural gas storage is also of interest to market players in the industry for commercial reasons. This chapter presents the applicable legal framework for storage facilities under the Third Energy Package within the context of these two dimensions: the first relates to the value of storage and the importance of strategic storage, especially in meeting energy needs during the winter season; while the second focuses on the current climate and outlook for the storage market, and also makes reference to the outcome of the stress tests in late 2014. The second part of this chapter concentrates on storage facilities from an infrastructural perspective, the applicable third-party access (TPA) regime, the refusal of access scenario and the grounds for such refusal, as well as possible exemptions from TPA under Article 36 of Directive 2009/73/EC.

INTRODUCTION: STORAGE FACILITIES UNDER THE THIRD ENERGY PACKAGE: THE LEGAL FRAMEWORK

Along with import contracts, liquefied natural gas (LNG) and hub-related products, gas storage is considered to be one of the most important flexibility tools for network users as regards supplying customers. Access to storage is consequently an interrelated topic which needs to be clearly defined from a regulatory perspective. With the entry into force of the Third Energy Package, new rules regarding storage have been introduced. In particular, as regards access to storage, Article 33 of Directive 2009/73/EC (the Gas Directive) is the core provision as far as the regulatory framework for operating storage facilities is concerned. The enforcement of these operating rules is governed by Article 41 of the Gas Directive, which entitles national regulatory authorities (NRAs) to monitor the correct application of the criteria to be used in deciding whether a negotiated access regime (nTPA) and/or a regulated access regime (rTPA) will be in place for the organisation of access to storage facilities. Furthermore, the European Commission has published an Interpretative Note on Gas Storage, which although not binding has been taken into account in several countries in defining the criteria to determine the access regime.