2008 Status Review: Capacity Allocation Mechanisms and Congestion Management Procedures for Storage

The ERGEG Status Review of Capacity Allocation Management (CAM) and Congestion Management Procedures (CMP) for Gas Storage found a wide range of different approaches to allocating gas storage capacity and managing congestion in Europe. The key finding of the report is that, where first come first served (FCFS) is the mechanism for capacity allocation a large proportion of storage facilities are fully booked (no capacity available for third parties) and the proportion of storage booked by affiliated shippers is high. In the absence of sufficient regulatory oversight FCFS does not appear to result in a non-discriminatory and fair allocation of capacity. The report also finds that effective congestion management procedures and secondary markets are not widely used. This is a major concern as most EU storage facilities are fully booked and are expected to be congested for many years. Consequently the regulators have committed to developing GGPs on CAM and CMP for gas storage in 2009.