Network expansion incentives included in new gas regulations

Incentives for expansion of the country’s natural gas network into new regions at a limited cost, even zero cost, have been included in new and revised sector regulations endorsed by RAE, the Regulatory Authority for Energy. The revisions are set to be published in the government gazette.

The move represents an important step in the effort to liberalize the natural gas market, further aided by the division of distribution and trading activities performed by supply companies.

The sector’s new regulations include a formula determining the calculation of fees for use of the country’s three exisiting natural gas distribution networks in the wider Athens area, Thessaloniki and Thessalia as well as other areas where networks are gradually being developed.

Network usage fee price levels will be endorsed annually by RAE so as to ensure that operational and depreciation costs are covered while also offering satisfactory returns for invested capital.

The network usage fees are designed to enable the natural gas grid operator to recover part or all of the construction costs entailed in developing new supply points.

Connection fee discounts will also be offered to encourage further market penetration of natural gas.

The revised regulations are expected to facilitate development of gas networks in new areas as, besides project costs, the network usage fees will factor in market demand forecasts in regions where new networks are being developed.

Four consumer categories have been established as part of the revised regulations – household, commercial, major-scale non-commercial, and industrial.