AGGM Austrian Gas Grid Management (AGGM) assumed on June 1st 2017 the role of market area manager (MAM) for the Eastern gas market area in Austria, which comprises all Austrian provinces except for Tyrol and Vorarlberg. In this role, which AGGM took over from Gas Connect Austria GmbH (GCA), the company is responsible for the management of the international gas transmission systems that are operated at present exclusively in the eastern part of Austria.
There are no transmission systems in the market areas of Tyrol and Vorarlberg. This is the reason why, in accordance with the provisions of the Austrian Natural Gas Act (Gaswirtschaftsgesetz), no market area manager has been appointed for that region. In addition, AGGM has been the distribution area manager for all of Austria since 2013. Its responsibility in this role is to ensure that the individual gas suppliers are able to provide the required volumes of natural gas to all gas consumers everywhere in the country. AGGM controls the flow of natural gas in the pipelines used to distribute natural gas at supra-regional level within Austria (“Level 1 gas distribution systems”). In this way the company plays a major role in ensuring the functioning of Austria’s natural gas market. AGGM’s registered office is located in the Florido Tower in the Vienna district of Floridsdorf.
Tasks and responsibilities of the market area manager and distribution area manager
AGGM fulfils the responsibilities conferred on it in accordance with sections 14 and 18 of the Gaswirtschaftsgesetz 2011 (GWG, Natural Gas Act) and in accordance with the Energielenkungsgesetz (EnLG, Energy Intervention Powers Act). As an Austrian company based in Vienna, AGGM is committed to the liberalisation of the Austrian natural gas market as specified in the Natural Gas Act and follows this principle in meeting their business responsibilities. AGGM supports the ongoing development of a competition-based and competitive energy market in Austria.
In its role as the market area manager, AGGM ensures equal conditions of access to the virtual interconnection point for all market participants, providing an equal footing for trading and transporting gas in Austria. Drawing up an expansion plan for the transmission system in the next 10 years, including annual updates, is another one of the key functions of the market area manager (Coordinated network development plan, CNDP). To this end, AGGM collects the transport capacity forecasts of the individual transmission system operators and aligns them with its own assessments of the actual gas requirements in Austria.
In its role as the distribution area manager, AGGM monitors and ensures the stability of the distribution area, i.e. that portion of the Austrian pipeline system through which gas is supplied to the country. The most important duties include granting “grid access” as part of capacity management. In managing grid access AGGM closely cooperates with the distribution system operators to enable on the one hand suppliers to feed natural gas for their customers into the supra-regional grid in Austria, as well as to allow consumers to draw the gas they need from the grid.
The Austrian Natural Gas Act additionally requires AGGM to prepare a Long-Term Plan (LTP) for the development of the Level 1 gas distribution systems over a period of ten years. The LTP has to be updated on an annual basis and is subject to approval by Austrian regulator Energie-Control Austria AG (E-Control or ECA). In preparing the LTP, AGGM consults closely with Gas Connect Austria, the entity responsible for the transnational pipelines conducting gas through the country (transmission system), and with the distribution system operators, i.e. companies that manage the regional gas grids within the various provinces of Austria.
Another important responsibility of AGGM is congestion management. Congestion may arise as a result of natural disasters as well as when the international gas supply is limited or interrupted for extended periods due to technical problems or for other reasons.
The integrated exercising of the two tasks, i.e. the market area manager and distribution area manager roles by one single company, i.e. AGGM, carries with it significant simplification for the market participants. Now they have one single contact entity for all issues relating to network management, access to the gas grids and system expansion. Moreover, expansion planning and coordination of the transmission system and the distribution system is enhanced.
In June 1998 the first Directive of the European Parliament and the Council of the European Union establishing a Europe-wide market for natural gas was adopted. The market was to be opened up or liberalised gradually to allow all gas consumers to freely choose their gas supplier. The basis for a competitive market has existed since 1 October 2002, when a strict separation between gas traders and gas system operators was introduced. Natural gas can only be supplied by means of a pipeline system, hence it was necessary to outsource the control of such systems to neutral companies acting independently of any specific gas supplier.
AGGM Austrian Gas Grid Management AG was subsequently established for this purpose by OMV Erdgas GmbH (now called Gas Connect Austria GmbH). AGGM took up independent activities as of 1 January 2003 and had the responsibility, within what was referred to as the “Eastern control area” (i.e. all of Austria with the exception of Tyrol and Vorarlberg), to manage supra-regional gas transports within Austria and to control the domestic pipelines required for the task. In this capacity AGGM was the “regional control area manager” for the Eastern control area.
In the years to follow the European Commission came to recognise the need to introduce stricter rules to ensure the functioning of competition in the gas market. The Commission subsequently adopted two additional Directives aimed at liberalising the gas market, most recently the “Third Internal Energy Market Package” in 2009. The provisions contained in the EU legislation were transposed into Austrian law mainly through an amendment of the Natural Gas Act in 2011.
This resulted in a number of changes for Austria’s gas market, the most significant of which was to migrate to an entry-exit model as of 1 January 2013. With the new gas market model, a gas supplier no longer has to reserve in every gas line, on down to the end consumer, the capacities required to deliver the volumes of gas those customers need. It is sufficient when the supplier reserves the required capacities at those points within Austria’s domestic distribution system where the supplier injects the gas into the grid and where the supplier’s customer withdraws the gas from the system.
When the gas market model was later adopted in Tyrol and Vorarlberg, AGGM’s scope of responsibility was expanded to include those two Austrian provinces as well, so that AGGM is currently the Austrian distribution area manager responsible for the entire territory of the country. In a premiere for Europe, AGGM implemented the entry-exit model in a cross-border system, in cooperation with the German and Austrian energy market regulatory authorities and with the regional gas system operators in Tyrol, Vorarlberg and Germany.
For gas transports to Liechtenstein and the Canton of Grisons in eastern Switzerland AGGM implemented a similar model on 1 October 2016.The issue of whether the market area manager and distribution area manager roles should be carried out by one single company in the Eastern market area had been under discussion since the time when the Austrian Natural Gas Act entered in to force in 2011. In early 2017, AGGM was nominated as market area manager by the two transmission system operators GAS CONNECT AUSTRIA GmbH and Trans-Austria Gasleitung GmbH, which was finally approved by the regulatory authority Energie-Control Austria (E-Control) by official decision in spring 2017.
Facts on AGGM Austrian Gas Grid Management AG
Role: distribution area manager in Austria’s Eastern distribution area and in the Tyrol and Vorarlberg market areas
Number of staff: about 35Company organisation:
- Aktiengesellschaft (joint stock company under Austrian law)
- Supervisory Board comprising nine members
- Executive Board comprising two membersShareholder structure (as of 1 January 2015):
- Gas Connect Austria GmbH (51%)
- Netz Niederösterreich GmbH (15%)
- Netz Oberösterreich GmbH (15%)
- Energienetze Steiermark GmbH (15%)
- TIGAS-Erdgas Tirol GmbH (2%)
- Vorarlberger Energienetze GmbH (2%)
Facts and figures on the Austrian natural gas market
- Transmission system length (pipeline systems for imports and cross-border transports): about 1,700 km
- Level 1 distribution system length (pipelines for gas distribution within Austria): about 1,660 km
- Maximum natural gas consumption rate in the Eastern distribution area: about 2.4 million normal cubic metres per hour
- Maximum natural gas consumption rate in the market areas Tyrol and Vorarlberg: about 166,000 normal cubic metres per hour