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New Market Designs and their Effect on Economic Performance in European Union's Natural Gas Markets

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  • N. Haase
  • H. Bressers

Abstract

The European gas market reform triggered new market designs which aimed to achieve competitive natural gas prices, efficiency gains, and security of gas supply. The paper analyses to what extent the effects of regulation-for-competition in the field of gas transport and related commodity measures on economic performance in the form of natural gas prices, network tariffs, efficiency gains, and investments in gas infrastructure can be empirically studied in a European wide comparative analysis. We demonstrate that conceptual and data constraints hinder the verification of the impact of regulation-for-competition (regulatory instruments to increase competition in the gas market) on those performance indicators. Natural gas prices remain oil-indexed and new investment projects are in practice exempted from competition measures. Assuming that a positive impact is a matter of fact is thus premature. A hold-up problem (where industry is reluctant to invest due to regulatory uncertainty and a lack of incentives) is difficult to quantify empirically. However, the industry's strong opposition to ownership unbundling coupled with the popularity of exemptions from third party access while still allowing long-term contracts does indicate that the general argument in favour of a hold-up problem has empirical relevance.

Suggested Citation

  • N. Haase & H. Bressers, 2010. "New Market Designs and their Effect on Economic Performance in European Union's Natural Gas Markets," Competition and Regulation in Network Industries, Intersentia, vol. 11(2), pages 176-207, June.
  • Handle: RePEc:sen:journl:v:11:i:2:y:2010:p:176-207
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    Cited by:

    1. Alessandro Rubino, 2016. "Euro-Mediterranean Gas Cooperation: Roles and Perceptions of Domestic Stakeholders and the European Commission," RSCAS Working Papers 2016/53, European University Institute.
    2. Tsatsos, Aristidis, 2012. "Die Liberalisierung des russischen Gassektors: 3 Szenarios? [The liberalisation of the Russian gas sector: 3 scenarios?]," MPRA Paper 44623, University Library of Munich, Germany.
    3. Hubert, Franz & Orlova, Ekaterina, 2018. "Network access and market power," Energy Economics, Elsevier, vol. 76(C), pages 170-185.
    4. Nicole Herweg & Stefan Wurster & Kathrin Dümig, 2018. "The European Natural Gas Market Reforms Revisited: Differentiating between Regulatory Output and Outcome," Social Sciences, MDPI, vol. 7(4), pages 1-19, April.
    5. Roberto Cardinale, 2023. "Liberalization and the volatility of gas prices: Exploring their relation in times of abundance and scarcity," Competition and Regulation in Network Industries, , vol. 24(2-3), pages 72-96, June.
    6. Rubino, Alessandro, 2021. "The political economy of Euro - Mediterranean cooperation in the gas market: The role of domestic stakeholders and the European Commission," Resources Policy, Elsevier, vol. 70(C).

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