Italian energy regulator AEEG late Monday said it was launching a new natural gas balancing system on July 1.
The system is intended to act as a platform for gas operators and traders to manage the amount of gas that they inject and withdraw from the country's grid network.
If any market player does not respect the balance of gas in the system -- such as withdrawing more than it injects or vice versa -- it will be penalized until the balance is restored.
The balancing platform is to be organized by the energy exchange operator Gestore dei Mercati Energetici (GME) while the balancing capacities are to be managed by Italy's gas grid operator Snam Rete Gas.
Currently Snam Rete Gas balances the system daily by withdrawing gas from storage or by injecting gas into storage.
With the new system, market participants will be required to report their positions daily to the GME and will be expected to balance the system through intraday trading.
This would change the current balancing system with a market-based one, where the criteria for ensuring a gas balance is done on a best offer basis instead of delegating the responsibility to Snam.
"The birth of a balancing market is an essential element to promote competition in the national gas system and for the development of a fluid and competitive wholesale gas market, characterized by the presence of price signals that reflects the value of gas for balancing purposes," AEEG president Guido Bortoni said in a statement Monday.
"All of this without discriminating between operators in terms of their storage availability and eliminating all obstacles, [is] to permit a more dynamic and competitive playing field for all interested parties," he added.
The balancing system was supposed to be launched on April 1, in line with the European Commission's 'third package' of guidelines for energy markets, but was delayed when Italy's Economic Development Ministry did not provide the AEEG with enough guidance to create the platform.
