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Decc considers putting supplier obligation on gas shippers The government has signalled that UK gas shippers and suppliers may be subject to public supply obligations which could require the industry to ensure supplies to households, and possibly small and medium-sized business customers, in the event of an emergency or unusually high winter peak demand. The possibility of some form of supplier obligation was highlighted in a discussion paper on the gas market issued by the Department of Energy and Climate Change (Decc). However, the department expressly ruled out a public agency to commission, build or operate gas storage facilities. Ministers have decided against such intervention on the grounds that "competition between government-commissioned and commercial storage could discourage commercial storage investment". Decc said 22 commercial gas storage projects were planned. They could quadruple UK gas storage capacity by 2020. The report, prepared in response to growing concern about energy security, said the department had tested the resilience of the system. Decc assessed how the UK would fare if it lost its largest gas storage facility (Rough), gas import terminal or largest source of imports for a whole year, including one with a severe winter. Such a probability was "very low" and the gas market "was resilient", officials concluded. However, the government believes there may be a need for better information flows about gas demand and supplies, and improved communication between the Norwegian transmission system operator and National Grid. Also canvassed in the report was the possibility of expanding the existing Gas Balancing Alert regime into a "more developed market surveillance system". *Northern Ireland regulator outlines gas storage plans* The Northern Ireland Authority for Utility Regulation has announced how it plans to regulate gas storage facilities in the province and what it considers the most appropriate access regime. The watchdog has not yet said whether the third party access regime will be regulated or negotiated. However, it has made it clear that the regime for any projects developed in Northern Ireland will depend on the availability of "flexibility tools", the market power of the facility owners and operators, transparency of storage use and any unbundling requirement. The regulator has also made it clear that support for any investment in storage facilities "must enhance competition in gas supply and enhance security of supply". Source: Utility Week © Faversham House Group Ltd 2010. News articles may be copied or forwarded
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