The Development of Gas Hubs in Europe

32 Pages Posted: 7 Nov 2014

See all articles by Caterina Miriello

Caterina Miriello

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy

Michele Polo

Bocconi University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: June 15, 2014

Abstract

This paper investigates the development of wholesale markets for natural gas at the different stages of market liberalization. We identify three steps in the process: wholesale trade initially develops to cope with balancing needs when the shippers and suppliers segments become more fragmented; once the market becomes more liquid, it turns out to be a second source of gas procurement in alternative to long term contracts; finally, to manage price risk financial instruments are traded. We review in detail the different regulatory measures that must be introduced to create an efficient and functioning wholesale gas market. Finally, we analyze the evolution of gas hubs in the UK, the Netherlands, Germany, Italy and Belgium in terms of market rules and market liquidity. We argue that each of these country cases can be easily located into the evolutionary path we have highlighted at the beginning, with the UK and the Netherlands leading the process, Germany catching up, Belgium slowing down and Italy showing an interesting counterfactual.

Keywords: natural gas markets, gas balancing, market liquidity

JEL Classification: Q48, L95

Suggested Citation

Miriello, Caterina and Polo, Michele, The Development of Gas Hubs in Europe (June 15, 2014). Available at SSRN: https://ssrn.com/abstract=2519608 or http://dx.doi.org/10.2139/ssrn.2519608

Caterina Miriello (Contact Author)

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

viale Filippetti, 9
Milan, 20122
Italy

Michele Polo

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

Register to save articles to
your library

Register

Paper statistics

Downloads
45
Abstract Views
288
PlumX Metrics