ENTSOG GRIP CEE 2014-2023 / Main Report

6.2 Permit Granting

Formal and legal procedures that precede construction works are often the most complex and time consuming stage throughout the investment process. In many cases, permit granting process causes major obstacles to gas infrastructure development in the CEE region and is responsible for most delays in project imple- mentation. The most crucial barriers in this respect include: \\ Changes and contradictions in national legislation; \\ Delays in implementation of EU regulations into national legislations; \\ The obligation to lead a number of administrative proceedings before different authorities in order to obtain necessary approvals, decisions and opinions. The need for better coordinating authority if the project crosses a number of districts; \\ Difficulties in obtaining the access to land; \\ Lack of binding time limits for administrative procedures that may lead to their extension; \\ Blocking of procedures (i.e. tender results); \\ Excessive requirements regarding early stages of project plan development; \\ Long duration of court proceedings. Legal actions taken to simplify and streamline the permit granting process should be promoted. Swift implementation of the recently adopted REG 347/2013 may have a significant impact on setting enhanced standards for the PCI projects. However, it needs to be emphasised that the best practices in the permit granting process should be applied also to other projects of regional and national importance, as they all are a precondition to a properly functioning gas market in the CEE region. Effectiveness of solutions to be introduced based on the REG 347/2013 will depend on its consistent implementation. Therefore, steps should be taken to ensure, in par- ticular in the current transitional period, that organisation of permit granting process as resulting from different schemes applied in neighbouring countries streamlines the implementation of cross-border projects.

6.3 Market

The degree of market development and natural gas transmission system varies considerably within the EU. Apart from countries with mature markets with a highly meshed transmission system and a diversified portfolio of supplies, there are coun- tries that require further investments to create a fully competitive and diversified market. Countries in the CEE regions are such an example. But not all projects supporting diversification of sources and security of supply may be designed in a fully market-based manner. This follows from the fact that the suppliers book capac- ity to meet the market demand and, consequently, do not see it as their responsibil- ity to fund the additional capacity which is not needed from market view but is re- quired to ensure the security of supply in the case of an emergency situation. Additionally, a tendency towards increasingly shorter booking commitments has been observed, whereas long-term capacities bookings normally underpin invest- ments in new gas infrastructure. The development of a competitive gas market results at present in opting for the most favourable solutions in the short and medium term. On the other hand, a free market is not possible without an efficient infrastructure that enables the access to a number of supply sources. In such

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GRIP Central Eastern Europe 2014–2023

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