The gas target model for the Visegard 4 Region: conceptual analysis. OSW Report, May 2013

The similarity of issues and geographical proximity have led the Visegrad 4 countries (V4) to undertake closer collaboration in natural gas policy, notably by agreeing on a common security of supply strategy, including regional emergency planning, and a common implementation of the Gas Target Model (GTM) that European regulators have proposed for the medium-long term design of the EU gas market, and which has been endorsed by the Madrid Regulatory Forum. As a contribution to this collaboration, the present paper will analyse how the GTM may be implemented in the V4 region, with a view to maximize the benefits that arise from joint implementation. A most relevant conclusion of the GTM is that markets should be large enough to attract market players and investments, so that sufficient diversity of sources may be reached and market power indicators are kept below dangerous levels. In most cases, this requires physical and/or virtual interconnection of present markets, which is also useful to achieve the required security of supply standards, as envisaged in the Regulation 994/2010/EC.