In Italy, the natural gas market has undergone a radical transformation began in 2000, through Legislative Decree No 164/00 which has started the process of liberalization. Despite the opening up to competition, many problems still persist, especially at the upstream phase, where the former monopolist Eni holds a dominant position also favoured by the long-term contracts with take or pay clauses. In order to promote competition and protect the end consumer, the Authority for Electricity and Gas has proposed the introduction of a regulated market for gas exchanges. Indeed, the negotiation of natural gas provides higher flexibility and liquidity useful to the evolution of the system in a context of full liberalization. The purpose of this paper is to simulate the behaviour of a natural gas exchange and to assess the impact that the latter has on the price volatility. To this end, we adopt the model of the Clearing House, where buy and sell orders are accumulated over time and the market is cleared periodically at the intersection of demand and supply curves. The results show that, in a natural gas exchange, the volatility of the market price decreases with the increasing number of investors. The price becomes more representative of supply and demand trends, not discriminatory, because equal for all transactions, and oil price independent.
Towards an Italian natural gas exchange: the implementation of the Clearing House model / Capece, G; Cricelli, L; Di Pillo, F; Levialdi Ghiron, N. - In: INTERNATIONAL REVIEW OF BUSINESS RESEARCH PAPERS. - ISSN 1832-9543. - 6:5(2010), pp. 107-118.
Towards an Italian natural gas exchange: the implementation of the Clearing House model
Di Pillo F;
2010
Abstract
In Italy, the natural gas market has undergone a radical transformation began in 2000, through Legislative Decree No 164/00 which has started the process of liberalization. Despite the opening up to competition, many problems still persist, especially at the upstream phase, where the former monopolist Eni holds a dominant position also favoured by the long-term contracts with take or pay clauses. In order to promote competition and protect the end consumer, the Authority for Electricity and Gas has proposed the introduction of a regulated market for gas exchanges. Indeed, the negotiation of natural gas provides higher flexibility and liquidity useful to the evolution of the system in a context of full liberalization. The purpose of this paper is to simulate the behaviour of a natural gas exchange and to assess the impact that the latter has on the price volatility. To this end, we adopt the model of the Clearing House, where buy and sell orders are accumulated over time and the market is cleared periodically at the intersection of demand and supply curves. The results show that, in a natural gas exchange, the volatility of the market price decreases with the increasing number of investors. The price becomes more representative of supply and demand trends, not discriminatory, because equal for all transactions, and oil price independent.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.