Several measures have been taken by the EU in order to secure a safe, integrated, sustainable and affordable energy supply . Particular attention has been given to gas, which is considered an essential component in the energy matrix of the EU.
In this context, and also in light of the Russian-Ukrainian gas crisis in January 2009, Regulation (EU) No. 994/2010 (the Regulation) was enacted in order to, among other things, strengthen the EU’s crisis prevention and response mechanisms.
The Regulation aims to provide the European Commission with reliable information, including as to long-term supply arrangements, necessary to ensure that the EU gas market ‘works effectively for as long as possible in the event of a supply disruption, prior to measures being taken by competent authorities to address the situation in which the market can no longer deliver the required gas supplies’.
Some of the Regulation’s more specific goals are: (i) to establish a risk assessment to identify risks to security of gas; (ii) to establish preventive action plans and emergency plans; and (iii) to ensure gas supplies to households and a range of protected customers for at least 30 days under severe conditions.
Based on the terms of the Regulation, on 11 August 2011, the Office of the Gas and Electricity Markets (OFGEM) issued a letter to gas shippers, suppliers, transmission and distribution companies (Gas Undertakings) requesting information regarding gas contracts held on 1 September 2011 with suppliers from non-European Union countries with a duration of more than 1 year. The information (or a confirmation that the Gas Undertakings are not parties to gas contracts with suppliers from non-EU countries) must be provided to OFGEM by 23 September 2011.
The Department of Energy and Climate Change (DECC) is the authority in the UK responsible for ensuring the implementation of the measures set out in the Regulation, and in its role, DECC has requested Ofgem to collect the information, which will be provided by Ofgem to DECC. DECC will then notify the information in aggregate to the Commission.
The information to be provided to OFGEM is the following: (i) contract duration; (ii) contracted volumes in total, in millions of cubic meters (mcm); (iii) contracted volumes per year, in mcm; (iv) contracted average volumes per month, in mcm, starting September 2011; (v) contracted maximum daily volumes, in mcm; and (vi) contracted delivery points.
The letter also requires the Gas Undertakings to notify DECC about new contracts and changes to existing contracts. OFGEM will outline the process intended to be followed for this in a further letter. In the meantime, OFGEM expects to be notified of new contracts and significant changes to existing contracts.
Ofgem, DECC and the Commission are required to ensure the confidentiality of the information provided.