Bnetza sees trust in German gas market merger tools

Relatively low uptake of transport capacity at German border points for the 2021-22 gas year and beyond at the annual auction earlier this week signals trust in measures aimed at preventing bottlenecks following the merger of the NCG and Gaspool market areas, regulator Bnetza has said.

As in previous annual auctions, capacity bookings for the upcoming gas year far exceeded those for subsequent years, Bnetza said. And this suggests market participants trust the newly introduced overbooking and buyback system, expecting that sufficient additional capacity for the joint market area will be made available at next year's annual auction, the regulator said.

Germany's two market areas are expected to be merged by 1 October 2021 into the Trading Hub Europe.

But there have been concerns about an expected drop in available firm, freely allocable entry capacity into the German grid following the merger. This capacity could fall by 78pc once the market areas are merged, Germany's system operators said last year.

A number of measures, including the overbooking and buyback system, are expected to alleviate these issues.

By means of the overbooking mechanism and other tools, system operators would offer firm capacity in excess of available technical capacity. When nominated flows exceed available technical capacity, operators would rely on these tools to alleviate congestion or, alternatively, have to buy back capacity from shippers.

And some German operators already offered additional capacity through the overbooking system at the annual auction on 6 July.

It will be up to the system operators to decide whether any conclusions need to be drawn from the recent auctions for future offerings and for determining post-merger capacity needs, Bnetza said today.

By Stefan Krümpelmann