The European Federation of Energy Traders (EFET) has published the 8th edition of the annual Gas Hubs Benchmarking Study, according to which scores have improved in all markets, though this is in part attributable to a change in one of the indicators (the volumes of trades in longer-term products which was replaced with an assessment of market interference).
“We are pleased to see continued improvements in these markets,” said Steve Rose Chair of the EFET Gas Hub Development Group. “As the sector prepares for transition, the tools necessary to trade in and out of positions will influence strongly how stakeholders are able to manage risks inherent in their portfolio.”
Further improvements have also been made in transparency and balancing and recognition of developments that were in place in the previous year but had not yet been observed to have had an impact.
“In recent years, liquid trading hubs have been an important tool to allow producers and consumers to rebalance portfolios under the changing dynamics of the pandemic and now the sudden growth in demand,” commented Doug Wood, Chair of the EFET Gas Committee. “Though the current high prices will be a concern to many, the transparency of prices that are afforded by hubs provides important information to stakeholders and authorities in deciding what action may be taken. Where markets do not have effective hubs, it has been more difficult for counterparts to manage their supply/demand balance.”
The study reflects specifically the design of the virtual trading points in each market and for the second year, the update focuses on new and less mature hubs in line with the original objectives of the study and no longer measures the most developed virtual trading points.
This year, the Czech virtual trading point was dropped as the major milestones had been reached and further growth in liquidity will depend on other factors. No new hubs were added, but Baltic hubs and Ireland were scored for the second year. Great improvements were made also in the Baltics, where the greater experience of the hub allowed better recognition of transparency and title transfer requirements. Bulgaria and Romania have also made gains but are still progressing slowly.