European Gas Hub Study
  • Welcome to the EFET Gas Hub Development Study.  This emerged from an observation that many new virtual trading points and gas hubs were being implemented across EU and in connected markets, in very different ways.  We applaud the development of Entry/Exit systems and hubs as these bring significant benefits to consumers and markets.  However, differences in implementation result in increased transaction costs (for both traders and hub operators) and risks, and unnecessary levels of operational complexity, which will ultimately reduce the overall benefits derived from the Internal Energy Market. 
  • This led to the question: could EFET develop a “best practice” model, based on its experiences (good and bad) in other markets, that could be used to advise NRAs and TSOs of what traders look for in a hub.  The objective was to produce a useful and practical guide, which would promote convergence in how hubs were being designed, and which could be used to promote liquidity.
  • The first part of the study (see ‘Summary Presentation’) was to identify preferred practices from liquid hubs in NW Europe.  What emerged quickly was the importance not only of the tasks themselves, but also the sequence with which there are implemented.
  • This led to an initial parametrisation of the model against which the developing hubs in less mature markets could be assessed.  The attached charts in the second part show the results based on the model and the known status as of Q1 2014 ( see ‘Individual Hub Assessments’).  It is anticipated that the model could be refined and hubs could be reassessed on a regular basis.  EFET considers that an annual revision may be suitable and hopes to complete a follow-up assessment in Q1 2015.
  • The results here are based on the views of EFET members, exercising all reasonable care to determine the best practice model and establish specific recommendations for individual hubs pursuant to their development phase with a view to progress hub development across Europe.  The analysis should not be relied upon for any public or commercial purposes.

Member Companies