Saturday 22 September 2007

A Glimmer in the Gloom: GazpromWatch Part 194

No, not just England’s win against Samoa, but some rather encouraging news from, of all places, the European Commission. It is pursuing a twin-track energy policy, trying to bring about true competition in the gas and electricity markets (on the UK model, in fact) at the same time as bolstering security of supply.

German and French vested interests (not to mention Gazprom) argue you can’t have both. They are wrong: proper market design can achieve better security via more competition. However, squaring the circle isn’t just a difficult technical task for regulators and market-designers, it’s an uphill struggle against both active resistance and uncooperative dumb-insolence.

Amazingly, the Commission soldiers on undaunted, and its proposals this week are clever. Briefly, they are designed to:

(1) gain the vital benefits of 'unbundling' the operation of infrastructure from commercial energy-supply, without forcing the aforesaid vested interests actually to divest themselves of the infrastructure. Unbundling is a sine qua non of competitive markets, and mere ‘administrative separation’ has completely failed to work the trick. Full divestment would be best; but placing the operatorship in the hands of an independent third party (as happens in the UK where regional monopolies are unwilling to divest, i.e. Scotland) is a pretty satisfactory second-best.

(2) keep European energy markets open for inward investment without allowing, err, Gazprom (or Algeria's Sonatrach), to buy controlling interests until it has met several important tests (don’t hold your breath).

Gazprom has been relatively restrained in its immediate response to these moves. They’d prefer the field to be left wide open to their divide-and-rule tactics, but the Commission is proving remarkably focussed on its twin aims, and Gazprom will need to find ways to play ball under the new rules. Take a bow, Jose Manuel Barroso, Andris Piebalgs and 'Steely Neelie' Kroes.



Steven_L said...

Privatising and de-regulating utilities is a great idea. It gives the consumer more choice - and me more opportunities to make lots of money slamming the consumers!

I like Redwood's idea of allowing Southerners to buy Northumbrian Water and vice-versa. I'm hope they do it. I'll get a contract from Northumbrian Water and come down there and slam all you metered folk with 'cheaper' water.

Nick Drew said...

Mark - couldn't agree more, but we can only get there step at a time

There are a couple of very helpful factors in this case, which in conjunction with the Commission's determination lead me to cautious optimism:

- France is already highly integrated into the European electricity market at the wholesale level, both physically (interconnections) and commercially, since it exports so much power. This forces them to play by (some of) the rules to a large extent

- they are already highly dependent on gas imports, and will want the benefits of interconnection & trade there too, this time for security of supply. With gas, they need to be prized away from their blinkered approach to strategic storage: but on this we have something to learn from them, too.

Need to be realistic about timing though (= pas d'escargots). And we've already predicted they will be playing a little game on nuclear decommissioning ...

Nick Drew said...

Steven - it's a great idea and has been around for quite a while - water, the last great commodity, it's crying out for a traded market.

Interestingly, Enron (who pioneered trading in gas, then electricity, then paper-n-pulp, then coal etc etc & were trying for broadband and property-indices when it all went belly-up) had a crack at this. But they quickly recognised it was too soon. So they bundled it all up as Azurix, 'floated' (!) it off at a huge profit ... and let it sink.

Timing is everything !

Anonymous said...

Just pointing out in my rush to agree...but the EU costs us billions and works for us...should we really be congratulating it for getting something right?

And are 100% right about those frog twats, and their German lackeys will follow suit too.

Old BE said...

Water is all very well, but isn't it rather expensive to transport around the place?

Steven_L said...

No one actually transports it around the place Ed. Deregulation doesn't work like that. It just means anyone can sell anyone elses water sort of.

Nick Drew said...

Shots - given the ongoing EU nonsenses we have to suffer, I just like to give credit on the odd occasion when it's due ... (oh, and I like to be warm in winter, too !)

Ed, Steven - you don't literally need to transport the stuff from your own sources to the end-customer, but you do need a central 'clearing' market where the stuff can actually be traded physically at the wholesale level, between the big players.

There is a proposal to facilitate this in the UK by linking some of the major canal systems, which would establish a 'wholesale market' (& since water finds its own level, transport would be quite cheap). Apparently, with only a few extra miles of new interconnections, a vast percentage of the water companies in England could be linked up in this way.

Old BE said...

I realise that the gas in my pipes and the electricity isn't generated by the people I buy it from, but a water network would need the facility for Thames Water, say, to be able to put water in so that supply in Manchester could be maintained, wouldn't it?

Nick Drew said...

Ed - yes, that's pretty much it: there needs to be some central clearing mechanism where the wholesaler puts in as much as their customers (wherever they are) take out

Of course this can happen in several ways:

- actually pump in some water to the wholesale network from wherever the wholesaler usually gets it, and get credited accordingly

- buy some on the wholesale market and pump it in (it would probably be 'in' already, since the physical trade in a wholesale market usually takes place at some central point in an integrated / interconnected network)

- be allowed to run a short position on some exchange, or within some 'balancing rules' of the network

- take it from storage somewhere

Of course, for this to work you need a ... *wait for it* ... liquid market !

Seriously, though ...

Anonymous said...

I don't thin it needs to work this way at all. What you need to do is spearate out the delivery of water from the delivery of the actual service. You pay the service provider, who then has to decide at what point he trades off the needs of the share-holders with the needs of the end customer - prices too high will hurt consumers are drive them into the hands of a competitor. Prices too low will hurt the share price. Games will be played depending on the likely weather outlook. Service providers will pay for delivery wholesale but will negotiate depending on the exact nature of the deal. Water wholesalers will continue to be regulated by Ofwat.

Nick Drew said...

Hmm - you may have something there but I'm not sure I exactly follow it

Anonymous said...

aaaa片, 免費聊天, 咆哮小老鼠影片分享區, 金瓶梅影片, av女優王國, 78論壇, 女同聊天室, 熟女貼圖, 1069壞朋友論壇gay, 淫蕩少女總部, 日本情色派, 平水相逢, 黑澀會美眉無名, 網路小說免費看, 999東洋成人, 免費視訊聊天, 情色電影分享區, 9k躺伯虎聊天室, 傑克論壇, 日本女星杉本彩寫真, 自拍電影免費下載, a片論壇, 情色短片試看, 素人自拍寫真, 免費成人影音, 彩虹自拍, 小魔女貼影片, 自拍裸體寫真, 禿頭俱樂部, 環球av影音城, 學生色情聊天室, 視訊美女, 辣妹情色圖, 性感卡通美女圖片, 影音, 情色照片 做愛, hilive tv , 忘年之交聊天室, 制服美女, 性感辣妹, ut 女同聊天室, 淫蕩自拍, 處女貼圖貼片區, 聊天ukiss tw, 亞亞成人館, 777成人, 秋瓷炫裸體寫真, 淫蕩天使貼圖, 十八禁成人影音, 禁地論壇, 洪爺淫蕩自拍, 秘書自拍圖片,

做愛的漫畫圖片, 情色電影分享區, 做愛ㄉ影片, 丁字褲美女寫真, 色美眉, 自拍俱樂部首頁, 日本偷自拍圖片, 色情做愛影片, 情色貼圖區, 八國聯軍情色網, 免費線上a片, 淫蕩女孩自拍, 美國a片, 都都成人站, 色情自拍, 本土自拍照片, 熊貓貼圖區, 色情影片, 5278影片網, 脫星寫真圖片, 粉喵聊天室, 金瓶梅18, sex888影片分享區, 1007視訊, 雙贏論壇, 爆爆爽a片免費看, 天堂私服論壇, 情色電影下載, 成人短片, 麗的線上情色小遊戲, 情色動畫免費下載, 日本女優, 小說論壇, 777成人區, showlive影音聊天網, 聊天室尋夢園, 義大利女星寫真集, 韓國a片, 熟女人妻援交, 0204成人, 性感內衣模特兒, 影片, 情色卡通, 85cc免費影城85cc, 本土自拍照片, 成人漫畫區, 18禁, 情人節阿性,

Anonymous said...

情色電影, aio交友愛情館, 言情小說, 愛情小說, 色情A片, 情色論壇, 色情影片, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊美女, 視訊交友, ut聊天室, 視訊聊天, 免費視訊聊天室, a片下載, av片, A漫, av dvd, av成人網, 聊天室, 成人論壇, 本土自拍, 自拍, A片, 愛情公寓, 情色, 舊情人, 情色貼圖, 情色文學, 情色交友, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 色情遊戲, 情色視訊, 情色電影, aio交友愛情館, 色情a片, 一夜情, 辣妹視訊, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊, 視訊美女, 美女視訊, 視訊交友, 視訊聊天, 免費視訊聊天室, 情人視訊網, 影音視訊聊天室, 視訊交友90739, 成人影片, 成人交友,

免費A片, 本土自拍, AV女優, 美女視訊, 情色交友, 免費AV, 色情網站, 辣妹視訊, 美女交友, 色情影片, 成人影片, 成人網站, A片,H漫, 18成人, 成人圖片, 成人漫畫, 情色網, 日本A片, 免費A片下載, 性愛, 成人交友, 嘟嘟成人網, 成人電影, 成人, 成人貼圖, 成人小說, 成人文章, 成人圖片區, 免費成人影片, 成人遊戲, 微風成人, 愛情公寓, 情色, 情色貼圖, 情色文學, 做愛, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 寄情築園小遊戲, 色情遊戲, 情色視訊,