There is a great tension at the moment between the use of interventionist measures to achieve energy policy goals and the use of market measures, says Doug Wood, Chair, Gas Committee, European Federation of Energy Traders (EFET), who will be chairing the gas trading stream at the upcoming Energy Trading Central and South Eastern Europe (ETCSEE) in Budapest.
Addressing energy challenges
But, this is where EFET plays an important role as it demonstrates how markets can help to address energy challenges more efficiently. Says Wood, “We will continue to contribute effectively to policy, regulation and market design, and to improve mutual understanding between authorities and market parties. In the CSEE region we want to see well designed trading hubs and access terms that will lead to greater pricing transparency for buyers and sellers of gas and investors in infrastructure.”
We asked Wood to share his views on the on the developments in the gas sector- in particular the central and eastern Europe (CEE) and southeast Europe (SEE) regions. He said, “In terms of market reform, we have seen many parts of this region lose pace compared to developments in the northwest parts of Europe. But we must recognise the different challenges faced here and seek solutions that enable faster progress.”
He explains that increases in interconnection and reverse flow capacity have started to increase supply security and reduce reliance on a single source. “The coming years will see incremental supplies from alternate sources and we must integrate these with existing routes.” He adds that it is too early to tell what will happen with South Stream since there are many possibilities for its rebirth or replacement and therefore, it is important to continue to look for a mutually advantageous solution.
ETCSEE will be focusing mainly on the implementation of new market rules and market progress for gas traders. We asked Wood what advice he offers traders. He says, “We are experiencing changes in market conditions right now that are often faster than market rules can be developed and implemented. Traders must remain in the debate through EFET, and help to share their experiences in the market to ensure that conditions and opportunities continue to improve. Opportunities exist in this region for improved market efficiency.
He says that traders at the event should be discussing topics like where in the region are we seeing liquidity emerging and what can be done to promote this, as well as how these markets can be connected to create a larger, regional pool of trading.