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Evaluating the 6 March PRISMA capacity auctionsPublished: 17 of October, 2017

The last building blocks of the European regulatory LEGO have just clicked into place with the missing network codes, underpinning the first coordinated European capacity auction and the race for fair and indiscriminate competition. However, the results are puzzling. Within one day, the network capacity usage was cemented for 20 years in favour of the dominant player. Market abuse and distortive practices in Eastern Europe run directly counter to the European Union’s investment of billions of euros to strengthen security of supply and diversification by means of infrastructure development.
In early March 2017, long-term capacity bookings were held on the PRISMA auction platform, which covers most of the European Union’s natural gas transmission grid. In this short analysis we highlight a market distortive phenomenon that may be the result of an information advantage of the dominant gas supplier in Europe. By paying about EUR 9 Bn capacity booking fees for the post-2020 period, Gazprom has again secured its control over the Central-Eastern European region and gas trade to the Ukraine.