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- 1.
When liberalisation took place national markets were characterized by just one or a few companies owning multiple storage plants and European directives did not impose any horizontal unbundling aiming to split storage companies by selling part of their plants to new entrants, as was done in the case of electricity generation.
- 2.
Recent forecasts concerning North–Western Europe (Hoffler and Kubler, 2006) show that a storage gap is going to affect the whole region in ten years, due also to the expected decrease of national production in the UK and the Netherlands. The Storage gap could be even wider than expected if the increasing import dependency led more Countries to devote storage capacity to precautionary inventories.
- 3.
The inquiry has found that most of the storage from the sample which is fully booked has been more than 95% full at the beginning of winter (in the period from January 2003 to mid-2005). In some cases however less than 90% of capacity has actually been used (European Commission, 2007, p. 65).
- 4.
An extensive analysis of the flexibility sources in European Countries before the implementation of market liberalisation is provided in International Energy Agency (2002).
- 5.
We do not consider this issue at the European market level to the extent that at present a single market for gas is far from being working in the European Union.
- 6.
It is worth noting that in the US the decision to exempt storage companies from regulated access is left in the hands of an independent regulator, which must assess by a case by case analysis if the degree of market concentration is such as to allow market based rates for storage services.
- 7.
Areeda, while commenting the diffusion of the doctrine, states in that “The essential facility doctrine is less than a doctrine than an epithet, indicating some exceptions to the right to keep one's creations to oneself, but not telling us what those exceptions are” (Areeda, 1989).
- 8.
From an empirical point of view the specificity of flexibility tools should arise as a difference of the value added to the same amount of gas sold to the same type of customers across suppliers. For example, the flexibility of imports may be coupled with a different price of the commodity and the availability of interruptible contracts is coupled to discounts offered to the industrial customers signing these contracts.
- 9.
We do not consider here the difference among space, injection capacity and withdrawal capacity. In practice the amount of rationing may be different for the three types of storage capacity offered to customers. For instance rationing might be overcome in terms of space but might persist as far as withdrawal capacity is considered.
- 10.
This kind of rules, satisfying an intuitive fairness criterion, is often used; a possible “equity” justification comes from the practice of it being coupled with public service obligations that require utilities to assure gas sales to households in any event (thus, access rights to storage capacity become proportional to the household market share served by each firm).
- 11.
In practice if a new entrant has no flexibility tools available but storage, then by hoarding storage capacity the leader can prevent the follower from extending its market share.
- 12.
In principle, an increase of z f given the total amount of available storage has possibly both a pro competitive effect (by increasing the supply function of the competitive fringe) and a counter competitive effect by raising the leader marginal cost.
- 13.
In a more general setting, we might expect that the less costly the alternative flexibility to the leader, the larger the amount of storage allocated to the follower in a market solution, the better the gas market performance at the final stage, with a value of \(\hat{\gamma}\) decreasing with respect to w 2l .
- 14.
Please note that there is no question of “cost mix”, since in both cases the leader will produce the relevant incremental output y − S by using x 2.
- 15.
Each importer must have precautionary stocks equal to 10% of the amount of gas imported from non-EU Countries. Both Stogit and Edison Stoccaggio are required to keep gas stocks for this purpose (5.08 Bsmc and 0.02 respectively) and the obligation of importers is fulfilled by renting gas stocks. In addition an obligation is placed on households suppliers to ensure supplies in the case of “1 out 20” winters.
- 16.
For investment in the development of new storage facilities, the rate of increase is 4% for 16 years, while the expansion of capacity in old concessions is allowed a 4% increase for 8 years.
- 17.
A problem of capacity hoarding concerning storage is also signalled by the research carried out by the European Commission about competition in the internal gas market (European Commission, 2007).
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Cavaliere, A. (2009). The Regulation of Access to Gas Storage. In: Cretì, A. (eds) The Economics of Natural Gas Storage. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-79407-3_4
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