DRAFT
28 April 2016
CEOE COMMENTS: EU ENERGY
PRICES AND COSTS
DRAFT
28 April 2016
Comment to “EU energy prices and costs (ECOFYS)” document
Page 4, “Drivers of energy supply component in retail gas market”: The analysis of “market
regulation” and “liberalization” as impact factors should take into account other cost drivers
(tariff deficit allocation, import restrictions, security of supply, etc.) that affect both market
features.
Page 36, about industrial competitiveness is not based in any of the previous slides. The study
shows different prices comparisons, but nothing about specialization, know-how, technology,
skills, capacity growth outside Europe… All the assumptions about these topics cannot be
called conclusions, they only seem to be guesses or desires by the authors, since they are not
grounded in shown data.
Comments to “The 2016 ad-hoc data collection and its results” document
Symmetry in the electricity and natural gas price breakdown is required. The price breakdown
into components and sub-components should be the same in both cases.
“Energy” component:
The “Security of supply” cost is classified as a sub-component of the “Taxes and levies”
component, but we consider it should be included in the “Energy” component. We also
consider that like “balancing energy”, “ancillary services” are related to the energy cost, and
thus they should also be considered within the “Energy” component.
In general, the “Energy” component for natural gas should be able to include the following
cost elements: commodity price for natural gas, balancing energy, capacity payments, energy
security (security of supply), supplied energy charges, customer services, after sales
management costs, other supply costs, and strategic stockpiles.
“Network” component:
The “Network” component for natural gas should also include other network costs, like the
costs associated to the use of LNG terminals (unloading, regasification and LNG storage) and
underground storages.
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DRAFT
28 April 2016
Comments to Gas Network Component:
Disaggregate the network component:
It would be advisable a higher level of disaggregation for the network component. For
instance the study could differentiate between basic infrastructure (i.e. transmission, LNG and
Storage) and distribution for every Member State.
Comments to Network price vs Network costs:
The slides show a comparison of network prices per Member State, but there is not
comparison of the network costs (i.e. how much the network cost represents in the final bill of
an average consumer). We think it is important to offer information on both aspects since the
study is precisely analyzing both prices and costs. Moreover, it can´t be possible to withdrawn
the right conclusions without having information on prices and costs for the network
component.
Take into account specificities of each Member State:
The study compares the network prices (€/kWh or €/MWh) in different countries; however
we are not sure that the study takes into account the particular characteristics of each
Member State which have a strong influence on the network costs (e.g. population density
and their distribution along the country, territory area, level of penetration, number of gas
consumers, etc.). If all these factors are to be taken into account, then corrective factors could
be introduced in the analysis in order to have a much more fair comparison of network prices
between Member States.
Gas Market Integration Costs:
One of the conclusions drawn in the Energy Prices and Costs report published by the
Commission in 2014 (link) was the need to develop European energy infrastructure in order to
complete the internal energy market. By improving market integration, and enhancing the
interconnectivity between national markets, the EU wholesale gas markets will experience a
higher price convergence. This phenomenon is already observed between gas hubs located in
the NW region (TTF, NBP, Zeebrugge, etc.). This study should not miss the opportunity to
assess the current cost of non-market integration between the EU wholesale gas markets and
present the results as part of the study. These conclusions could be used later on as an
argument to underpin the construction of projects of common interest (PCI), amongst others
regulatory measures.
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