The implementation in Great Britain of Directive 200467EC concerning

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					The implementation in Great Britain of Directive 2004/67/EC concerning measures to safeguard security of natural gas supply Conclusions following consultation January 2007

URN 07/540

CONTENTS

1. 2. 3.

Executive summary Responses relevant to Articles Conclusions

Annex A – list of respondents

1.

EXECUTIVE SUMMARY

1.1 The Department issued a consultation document in March 20061 seeking views on the measures needed to implement Directive 2004 /67/EC of 26 April 2004 concerning measures to safeguard security of natural gas supply2 in Great Britain. Views were invited by 6 June 2006. This document sets our conclusions from the responses to the consultation. 1.2 The Department’s view was that existing regulatory measures could be relied on to transpose virtually all of the mandatory parts of the Directive in Great Britain. The only exception identified was the reporting of long-term contracts under Article 5.1(c), which we suggested could be met by the relevant data being provided on a voluntary basis. 1.3 We received responses to the consultation from the thirteen organisations listed in Annex A. These replies can be viewed on the Department’s website3 and were generally supportive of the line proposed in the consultation document. A more detailed consideration of the responses made on each of the Directive’s articles is set out in section 2 below. 1.4 We therefore intend to proceed as suggested in the consultation document.

1.5 More generally the Department is reviewing arrangements for ensuring gas supplies as part of its Energy Review and issued a consultation document “Effectiveness of current gas security of supply arrangements”4- in October. Responses to this are sought by 12 January 2007. The resulting decisions may revise existing arrangements but will still need to comply with the terms of the Directive.

2.

RESPONSES RELEVANT TO ARTICLES

2.1 Article 1. Objective. This sets out the purpose of the Directive. It does not require transposition and was not commented on by respondents. 2.2 Article 2. Definitions. This defines terms. Several respondents suggested that the “10 years” in relation to “long term gas supply contract” should refer only to contracts with more than ten years left to run. Our view on this is, however, that the definition in the Directive requires reporting on all contracts of more than ten years duration, no matter when they were concluded. 2.3 Article 3. Policies for securing gas supply. It was generally accepted that Great Britain complies with this Article for the reasons set out in the consultation
“The implementation in Great Britain of Directive 2004/67/EC concerning measures to safeguard security of natural gas supply” which is at http://www.dti.gov.uk/files/file28161.pdf 2 This Directive is at http://eur-lex.europa.eu/LexUriServ/site/en/oj/2004/l_127/l_12720040429en00920096.pdf 3 These can be seen at http://www.dti.gov.uk/files/file36294.pdf 4 This consultation document is at http://www.dti.gov.uk/files/file34563.pdf
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document. However, one of the Energy Review recommendations was to consider the effectiveness of the current gas security of supply arrangements in the UK, and a consultation has been launched with this purpose. Any changes to the arrangements will, of course, still need to comply with the Directive. 2.4 Article 4. Security of supply for specific customers. While none of the respondents disagreed with our assessment of how we complied, several suggested we should take up the option of extending the existing levels of protection given to residential consumers to the commercial sector. It was also suggested that gas storage obligations should be reviewed. However, once again, such changes are being considered as part of the current domestic consultation. We will ensure those conducting that review are aware of these views. 2.5 Article 5. Reporting. Respondents’ comments focused on the provision of information on long term gas supply contracts under Article 5.1(c), with general agreement that, as proposed in the consultation document, the information on longterm contracts required should be provided on a voluntary basis. We are currently discussing with the various parties involved the best way to collect the necessary information. The arrangements will respect the commercial sensitivity of the information. 2.6 Article 6. Monitoring. One respondent suggested that the reference in Article 6.1(a) to “new long–term gas supply import contracts from third countries” might limit the reporting requirement of Article 5.1(c) to import contracts. However our view is that the reference to long-term contracts in Article 5.1(c) is not limited in this way. 2.7 Articles 7. Gas Co-ordination Group. The duties of the Group have yet to be finally agreed, but it is expected that they will include the exchange of information on the current and future security of supply situation, the development of scenarios for the management of major supply disruptions and a database of information on security of gas supply. 2.8 Article 8. National emergency measures. Respondents did not comment on this Article. 2.9 Article 9. Community mechanism. This gives the Gas Coordination Group and Member States various roles in major supply disruptions. Although concern was expressed by one respondent that this might lead to the usurping of the role of Member States in supply emergencies, the Article gives no powers to either the Group or the Commission to intervene directly in national procedures. 2.10 Articles 10, 11 and 12 are procedural and concern monitoring of implementation by the Commission, transposition and entry into force. No comments were received.

3.

CONCLUSIONS

3.1 With the exception of the requirement to report long-term gas supply contracts under Article 5.1(c), we therefore believe that Great Britain complies with the terms of Directive 2004/67/EC concerning measures to safeguard security of natural gas supply. We are discussing with relevant parties how to collect the required information on long-term contracts, which will be done on a voluntary basis and in such a way as to protect commercial confidentiality. 3.2 More generally and as referred to in paragraph 1.5, the Government is reviewing existing measures for ensuring the security of national gas supplies as part of the Energy Review. Any changes to the current regime thought necessary will be announced as part of that process.

Annex A Respondents to the consultation:AEP BG Group Centrica Chemical Industries Association energywatch ExxonMobil Gas Industry Safety Group National Grid RWEnpower Shell UK Ltd SSE Terra Nitrogen (UK) Ltd UKOOA


				
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