32 / 232
32 |
Ten Year Network Development Plan 2015
Lack of market support
Lack of market maturity
Other
%
46
32
22
Figure 3.4:
Overview of the Market related project barriers
%
65
15
20
Availability of funds
Amortization rates
Other
Figure 3.5:
Overview of the Financing related project barriers
3.3.2 MARKET ENVIRONMENT
Many promoters are facing challenges in triggering investment on a market basis as
it is supposed to be the rule under the Third Energy Package.
The difficulty in receiving sufficient market commitment is one of the main barriers
highlighted by promoters. The focus on short-term capacity products, as a result of
the way European regulation has been implemented, the current economic situation
and unclear signals from EU energy policy, do not deliver the necessary investment
signals and long-term financial commitment to trigger new infrastructure projects.
The lack of market maturity is also identified as a barrier with regard to the number
of users and the development of the commercial arrangements.
In some regions, promoters are facing additional challenges as the gas market is not
sufficiently mature to give the appropriate signals and provide sufficient financial
commitment. These regions are often at the same time suffering from a lack of infra-
structure integration compared to the rest of the European gas market.
Within the framework of the TEN-E Regulation, European Commission has
emphasised that co-financing will only apply for key projects not affordable solely
within the concerned markets. Nevertheless, the expectation persists that co-financ-
ing would reduce the need of long term commitment by the market.
3.3.3 FINANCIAL ENVIRONMENT
Gas infrastructure projects are capital intensive assets with a very long economic
lifetime therefore project financing is a major part of the process of enabling the
investment. Financial tools put in place to support new investments are not always
attractive to investors.