For competition to work in practice, eligible customers need to have access to the various components of GB’s electricity and gas networks, in order to transport the electricity and gas that they have bought from producers and suppliers.
Open and non-discriminatory access to the networks by those who do not own the physical network infrastructure, known as third party access (TPA), is fundamental in facilitating greater competition and making energy markets work effectively.
To enable the transport of energy from producers to eligible customers owners and operators of the electricity networks, the transmission system operator (SO) and the distribution system operators (DSOs), and the owners/ operators of interconnectors are obliged by licence conditions and European legislation to provide access to their lines, pipes and other facilities to third parties.
Under EU legislation, owners or interconnectors, storage facilities and LNG import terminals may apply for an exemption from being required to offer access to third parties. This route is intended to provide for the development of such facilities in a competitive market (such as in GB) where it is not necessary for the facilities to be stringently regulated (for example, tariffs would not need to be agreed by the regulator).
Ofgem considers each request for exemption on a case by case basis to see if these criteria are met. Ofgem has already taken a number of decisions to provide exemptions. As part of the granting of an exemption Ofgem may impose certain conditions on the operation of the facility, for example, the capacity holder may be required to make capacity that they are not using available to other parties.
The GB Markets team oversees the process for considering applications for exemption from the Directive Regulated Third Party Access (RTPA) requirements. This covers the following types of infrastructure development:
· Gas and electricity interconnectors to other countries
· Gas storage facilities
· Liquefied Natural Gas (LNG) importation facilities