Energy Market Regulation and Energy Market Reform

Providing Regulatory Experience on Energy Market Reform

Developing competitive and efficient energy markets is intended to facilitate energy supply to customers at reasonable prices, whilst encouraging new entry and investment. However, energy market regulation and energy market reform is a complex area, requiring careful analysis, and benefitting from experience in practical application of regulatory principles.

MJMEnergy’s staff and associates have many years experience in energy market regulation and energy market reform, from the perspectives of both the regulated company and the regulator, and have advised companies, regulators, governments and consumers bringing a combination of technical, marketing, commercial and regulatory experience on energy market reform.

Consultancy Projects:

The following titles are examples of some of the energy consultancy projects that we have carried out in this area of expertise. (Clicking the title will provide more information.)

  • Pakistan Gas Sector Restructuring (World Bank)
  • Pakistan Gas Sector Restructuring (World Bank)

    MJMEnergy and ECA jointly worked on this project on behalf the World Bank to provide recommendations for a suitable gas sector structure to ensure the financial viability of the sector, the introduction of higher cost LNG imports, the development of transmission system expansion and private sector participation.

    In particular, MJMEnergy focussed on gas transmission networks, its costing, configuration and capacity.

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  • Indonesia Gas Infrastructure Optimisation and Investment Framework
  • Indonesia Gas Infrastructure Optimisation and Investment Framework

    MJMEnergy completed an extensive review of Indonesia’s gas market infrastructure and the associated investment planning processes for Indonesian regulatory, DG MIGAS, on behalf of the World Bank. The work focussed on three main work areas:

    1. Gas Infrastructure Optimisation;
    2. Investment Framework for Gas Infrastructure; and
    3. Review of Gas Infrastructure Planning Function.

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  • Support to DESFA
  • Support to DESFA

    Over an extended period MJMEnergy, in conjunction with CERA, provided Greek gas company, DESFA, with support on implementation of the EU Gas Directives, including reviews of the Network Code and LNG terminal user agreements, regulatory support, and EU liberalisation analysis.

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  • Review of Nigerian Petroleum Industry Bill
  • Review of Nigerian Petroleum Industry Bill

    MJMEnergy, acting for a Nigerian energy producer, provided analysis of the Nigeria Petroleum Investment Bill 2012 (PIB-2012) to aid the development of a lobbying strategy.

    In particular MJMEnergy provided support on issues pertaining to gas market liberalisation, trading and tariffs. Areas covered included the development of infrastructure, third party access, tariffs and legal issues such as the Network Code.

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  • Northern Ireland Utility Regulator Network Code Expert
  • Northern Ireland Utility Regulator Network Code Expert

    MJMEnergy were engaged as specialist Network Code advisors to the Northern Ireland Authority for Utility Regulation (NIAUR) providing advice on the development of a common energy market.

    Areas covered included a review of reports and documents produced by the various players on the Common Arrangements for Gas (CAG) project (a plan to integrate the Northern Ireland and Republic of Ireland gas systems), and assistance in the development of policy, particularly in relation to system operation, supply security and infrastructure investment.

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  • Drafting of Regulatory Exemption Application for Merchant Interconnector Pipeline
  • Drafting of Regulatory Exemption Application for Merchant Interconnector Pipeline

    Working for a major merchant interconnector operator in Europe, MJMEnergy drafted a regulatory access proposal with supporting documentation, relating to Article 22 of the EU Gas Directive. MJMEnergy worked to assimilate material provided by the client and supplement it with market analysis, review of competing infrastructure, review of the relevant legislation, and a review of the contractual arrangements.

    Working to very tight timescales, we then drafted a full exemption application for the project.

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  • Ukraine Gas Restructuring
  • Ukraine Gas Restructuring

    In conjunction with ECA, MJMEnergy provided consultancy services to Naftogaz and the World Bank for the restructuring of the Ukrainian gas sector.

    Mike Madden, Nick White and Chris Le Fevre worked with ECA to assist Ukraine’s national gas company Naftogaz in refining its restructuring concept and developing a feasible short and medium-term implementation plan to restructure transmission, storage and distribution businesses. This was aimed towards establishing a competitive gas market, to restore Naftogaz’ financial stability and for Ukraine to meet its obligations under the EU 3rd Energy Package.

    In particular MJMEnergy provided advice on the operational and commercial aspects of gas infrastructure.

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  • Review of Nigerian Network Code
  • Review of Nigerian Network Code

    Working for the World Bank, MJMEnergy reviewed the draft Nigerian Network Code, providing a summary of key issues to be considered by the Ministry of Petroleum Resources, with supporting technical analysis and evidence drawn from Network Codes elsewhere.

    As part of the report MJMEnergy identified areas where more work would be needed before implementation of the Network Code would be possible.

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  • Singapore Gas Market Monitoring
  • Singapore Gas Market Monitoring

    MJMEnergy, acting as consultants to the Singapore Gas Market Surveillance Panel (GMSP) on behalf of the Energy Markets Authority, analysed roughly 1TB of data on gas flows and system capacities through the Singapore National Gas Transmission System (NGTS) in order to produce an independent quarterly market monitoring report for the Singapore Energy EMA and the GMSP.

    Areas covered included pipeline capacity bookings versus actual usage, discrepancies in shipper nominations and the recommendations for changes to the Singapore Gas Network Code and wider regulatory structure.

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  • Advice on Application of EU Network Codes to Merchant Pipeline
  • Advice on Application of EU Network Codes to Merchant Pipeline

    MJMEnergy advised IUK on the application of EU Network Codes to IUK’s UK-Belgium Interconnector business. MJMEnergy consultants commented on drafts of IUK’s proposals for implementing EU Network Codes, in particular Congestion Management Principles.

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  • Gas Tariff Study for Libya
  • Gas Tariff Study for Libya

    MJMEnergy undertook this work for CERA who were working for the Libyan Energy Ministry. The study involved a detailed review of gas policy, pricing and tariffs in Algeria, Egypt, the Netherlands and Russia, and recommendations for gas pricing policies to facilitate development of the Libyan gas market.

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  • UK Significant Code Review: Gas Supply Security
  • UK Significant Code Review: Gas Supply Security

    Ofgem as part of its Gas security of supply review, commissioned MJMEnergy/Redpoint to identify and analyse the possible risks to GB gas supply security, to inform the regulator’s decisions as to whether to support strategic storage or other interventions in the gas market.

    The report was based on a wide-ranging literature review and a series of interviews with key stakeholders and academics.

    MJMEnergy produced a report that provided an overview of the issue of security of gas supply as it affected the GB market, including an analysis of what was meant by security of supply, current and future challenges to security of supply and a description of the GB gas market from a security of supply perspective.

    We also analysed potential supplies of gas (delivered as LNG and pipeline gas respectively) and associated risks to GB supply security and provided key conclusions regarding risks to security of supply for the GB gas market.

    MJMEnergy provided gas specialist support to Redpoint’s modelling of the impact of various potential security of supply interventions.

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  • EU Competition Enquiry Advice
  • EU Competition Enquiry Advice

    MJMEnergy, working in conjunction with Gas Strategies, provided advice to the EU’s Directorate-General for Competition on the development and interpretation of results of questionnaires sent to European energy market players, including transporters, suppliers and traders.

    The questionnaires were intended to assess the state of competition and identify barriers to competitive gas supply markets in EU states.

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  • Pakistan LNG Import Fast Track Project
  • Pakistan LNG Import Fast Track Project

    The purpose of this project was to provide support to SSGC and the Government of Pakistan (MPNR) in order to facilitate the importation of LNG into Pakistan. This involved writing the original tender, reviewing the bids and supporting the GOP in the technical and commercial negotiations.

    MJMEnergy were technical and commercial advisors, working alongside QED.

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  • Ireland Gas Balancing
  • Ireland Gas Balancing

    MJMEnergy, in conjunction with Deloittes, provided the Republic of Ireland regulator, CER, with advice and support on the development of the gas balancing regime in Ireland, covering the Bord Gais’ Code of Operations and balancing penalties.

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  • European Commission Competition Enquiry Support
  • European Commission Competition Enquiry Support

    MJMEnergy, in conjunction with Gas Strategies, supported the European Commission in its energy sector competition enquiry.

    In particular MJMEnergy was involved in the development and assessment of questionnaires that were sent to all EU gas operators focussing on key issues and barriers in market liberalisation.

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  • Nigeria Extractive Industries Transparency Initiative Gas Audit
  • Nigeria Extractive Industries Transparency Initiative Gas Audit

    MJMEnergy, working in conjunction with the Hart Group, assisted in several gas audits as part of Nigeria Extractive Industries Transparency Initiative (NEITI).

    This included detailed analysis of historical gas flows and system dynamics to assess total production, flaring, own use, marketed gas and gas losses, and to identify inconsistencies and concerns in the data. The reports also included recommendations for system improvements in areas such as gas quality, metering and data management.

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  • Commercial and Regulatory Review of the South African and Mozambique Gas Markets
  • Commercial and Regulatory Review of the South African and Mozambique Gas Markets

    MJMEnergy, working in conjunction with QED, provided Sasol with a gas market study covering Mozambique and North-East South Africa.

    In particular MJMEnergy undertook detailed analysis of the gas pipeline network in Mozambique and North-East South Africa, identifying the maximum capacity of the existing facilities, and modelling the impact of changes in load, location, compression and pipeline strings on maximum capacity. This work required detailed technical understanding of gas transmission and operations, and maintenance regimes, as well as gas flow modelling skills, and an appreciation of gas transmission regulatory and charging arrangements. MJMEnergy interacted with local companies, operators and regulators on site visits in South Africa.

    In addition, MJMEnergy contributed to the wider market study, considering supply and demand and market opportunities.

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  • Study on Reform of Nauru Phosphate Corporation
  • Study on Reform of Nauru Phosphate Corporation

    MJMEnergy with PPA Energy on its proposals for reform of the electricity industry on Nauru. This project, on behalf of the Asian Development Bank, focused on ways to renovate and modernise the electricity supply system, whilst addressing last-standing payment and cross-subsidy issues. MJMEnergy provided editorial support on the report.

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  • Pakistan Network Code Support
  • Pakistan Network Code Support

    MJMEnergy working on behalf of the World Bank and the Government of Pakistan, assisted in the development of the Pakistan Network Code. This included guiding the process of drafting the code text, working with government, regulatory and industry stakeholders to explain and refine the text, through a series of industry workshops, as well as assisting the regulator, OGRA, in the development of licences and other associated regulation.

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  • UK and Italy Gas Transportation Study
  • UK and Italy Gas Transportation Study

    MJMEnergy, working in conjunction with Gas Strategies, provided a Japanese utility with a detailed study of gas transportation arrangements under the network codes in the UK and Italy, including the impact of market liberalization and gas tariff structures.

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Training and Capacity Building:

The following are examples of some of the energy training and capacity building we have carried out that is relevant to this area of expertise. (Clicking the title will provide more information.)

  • EU Gas Markets
  • EU Gas Markets

    This two-day overview explores the EU Gas Markets with teaching sessions, case studies and our gas balancing simulation game.

    This two-day course looks at:

    Day One:

    You will gain an overview the whole EU gas market, examining the infrastructure and supply/demand match. We will explain the principles of liberalisation and together we will explore contracts, pricing, markets, gas transportation and security of supply.

    Day Two:

    We will spend some time investigating the key European markets, looking at energy trading regulation and discuss the future of gas in Europe and the possible effect the UK’s departure from Europe might have on the European gas market.
    The next public course date is:

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  • UK Gas Markets
  • UK Gas Markets

    As well as explaining the whole UK 'world of gas', this one-day course will also look at coping with the un-predictables, like the weather, future consumption patterns and the imperative of trading in gas supplies and explaining how these factors form the NBP prices.

    This one-day course looks at:

    • The Physical Gas Market
    • Market Fundamentals & Price Behaviour
    • Overview of the Commercial Gas Market
    • The Gas Balancing Game
    • Instruments & Trading Strategies
    • The Future of Gas

    The next public course date is:

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  • CREG Open Season Training
  • CREG Open Season Training

    MJMEnergy provided Colombian energy regulator, CREG, with a bespoke training seminar on Open Seasons and their application to the construction of gas pipelines. The training included explanation of the concepts of Open Season and a review of their use in different jurisdictions around the world as well as recommendations for Colombia.

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  • 21st Century Regulation
  • 21st Century Regulation

    Course Description

    This three-day course has been specifically developed in order to explain both the background and practice of gas market regulation as well as providing suitable tools and intellectual and practical frameworks for parties involved in 21st Century gas regulation.

    Understanding and applying regulation to gas markets is a crucial skill as energy market liberalisation gathers pace around the world.

    Day One:

    The purpose of this first day is to provide you with a solid academic theoretical and historical basis to energy market regulation, drawing on the experience of European and North American energy markets in particular.

    Day Two:

    The purpose of this second day, building on regulatory economic theory, is to provide a series of practical examples of how regulation is undertaken in the real world. This will be achieved firstly with a series of sessions on specific regulatory issues followed by a number of case studies.

    Day Three:

    The purpose of this third day is to build on both economic theory and practical application in order to provide you with useful tools and approaches that you can apply to your own particular regulatory environment, whether you are a regulator, the regulated, or a participant in a regulated market.

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  • EU Electricity Markets
  • EU Electricity Markets

    Course Description

    Over the two days you will gain a sound understanding of the complexities of the European electricity markets, explore the methods used by different countries across Europe and participate in two different interactive trading and balancing scenarios. You are free to ask questions from the trainers who are both experts in this field and there will be plenty of opportunities for discussion.

    Day One:

    You will gain an overview of the European electricity market and examine policy and legislation backgrounds. We will also explore together some of the key country markets and actively engage with balancing.

    Day Two:

    We will provide you with an understanding of the environmental drivers, including the consequences of COP 21, and examine wholesale markets, trading and some of the other key European country markets. You will compete with other delegates in the trading exercise and learn about the future of power generation, markets and demand.
    The next public course date is:

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  • UK Energy Market Futures
  • UK Energy Market Futures

    The course will equip all those needing their own take on the UK energy market with the ingredients to assess likely future scenarios up to 20 years ahead. It features a helicopter view of the current market, known planning success stories, clean energy solutions and other energy-critical subjects. It will help debate the question, "is the future electric?" and look into the shape and challenges of future markets.

    The course covers:

    • Reasons for change and policy interventions
    • The Carbon Counter Game
    • Pathways - all hail electrification!
    • Decarbonisating energy
    • The hydrocarbon bridge - how we are doing?
    • My 2050 role play
    • What's in the News?

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  • Ofgem Gas Technical Basics/Advanced
  • Ofgem Gas Technical Basics/Advanced

    We designed a Gas Basic and Gas Advanced course for Ofgem to provide a greater understanding of the operation of the gas supply system for their non-engineers as well as perspectives on commercial gas issues.

    An extensive handbook to go with each course and a precourse online questionnaire to help staff know which level they required was also provided.

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  • Framework Agreement with IGEM for the Provision of Technical Training
  • The IGEM Academy

    Over the last few years MJMEnergy has worked closely with IGEM to prepare and deliver technical training for engineers, both in the UK and overseas. Typical examples have included the following:

    • Introduction to the UK gas industry and its market.
    • Asset integrity management.
    • TGas market safety, legislation and regulation.
    • Engineering ethics – doing the right thing.
    • Safety, risk & reliability management.
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  • Cambodia Energy Security Seminar
  • Cambodia Energy Security Seminar

    MJMEnergy prepared a series of training seminars, which were delivered at the Asean Energy Security seminar in Cambodia. The seminars covered several topics including gas market liberalisation, energy balancing, scheduling and tariffs.

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Energy Publishing:

The following titles are examples of energy reports that we have written, published or sell and are included to complement this section. Feel free to click on the titles for more information.

  • A Lot of Hot Air?
  • A Lot of Hot Air? To What Extent Could Gas Lose Ground in the Heating Market in Europe

    MJMEnergy researched and wrote this analysis paper for Cedigaz, exploring the role of gas in the heating market in Europe, and considering the potential for replacement by alternative heat sources, including heat networks and heat pumps.

    The study included detailed analysis of the current market, changing demographics, technological and political developments, and market development, with case studies and forecasts to 2050 for the UK, France, Germany, Poland and the Netherlands.

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  • The Long Term Capacity Auctions
  • The Long Term Capacity Auctions

    Shippers wishing to deliver gas into Transco's supply system are required to hold entry capacity rights. Entry capacity is available at the six major beach terminals, as well as a number of smaller entry points. Capacity is variable depending on demand and network flows. The cost and availability of entry capacity is major factor in UK gas producers and shippers profitability.

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  • Network 2000
  • Network 2000

    Mike Madden and Nick White authored this report for FT Energy, explaining the key changes to the UK Network Code arrangements in 1999, including the creation of a within-day gas balancing market for both shippers and the transporter, the On-the-day Commodity Market, and the development of entry capacity auctions.

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  • Liberalising Gas Markets in Europe
  • Liberalising Gas Markets in Europe

    In this ground-breaking report published by Petroleum Economist, Mike Madden and Nick White reviewed the state of the gas market in each of the then 15 EU states and considered the impact of the EU Gas Directive on companies, markets and suppliers.

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  • The New Electricity Trading Arrangements
  • The New Electricity Trading Arrangements

    Written by Nick White for Petroleum Economist, this industry guide described and explained the major reform of the UK electricity system whereby the centralised electricity Pool system was replaced by a system of bilateral contracts (referred to as the New Electricity Trading Arrangements or NETA) with generator self-dispatch under the terms of the Balancing and Settlement Code.

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  • The Network Code
  • The Network Code

    The Transco Network Code introduced in 1996 was a new approach to gas transportation arrangements, which has now been used as a model f or many liberalising gas markets. Mike Madden’s report written for FT Energy explained the background, rationale, development, text and operation of the Network Code, helping readers to understand the huge changes in the UK gas market at the time.

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  • Lifting of Stricter Consents: The Future of UK Gas-Fired Power Plants
  • Lifting of Stricter Consents: The Future of UK Gas-Fired Power Plants

    This report written by Nick White and David Smith and published by FT Energy reviewed the impact of the UK Government’s decision to impose a moratorium on new gas-fired power stations during the period leading up to the reform of the UK electricity pool.

    In bringing a premature end to the Dash for Gas, the Government temporarily preserved UK coal operations, but with the risk of deterring inward investment and distorting the market.

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  • Gas and Electricity Trading in Italy
  • Gas and Electricity Trading in Italy

    Written by Nick White and Philip Pike for the Energy Publishing Network, this report provided a detailed overview of gas and electricity markets, players, strategies and trading in Italy in the early years of the energy market liberalisation.

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Key staff and associates:

  • Mike Madden
  • Nick White
  • Jeremy Bending
  • Chris Le Fevre
  • Duncan Jack