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Market model

The Swedish market model is arranged up in a way that balance must be maintained between supply and offtake in the gas grid. The model involves several different parties.

Swedegas owns the Swedish gas transmission grid and is responsible for operation, maintenance and capacity allocation. The end users and the distribution system operators (DSOs) that are directly connected to the transmission grid book capacity in the Swedegas´ transmission grid. End users in the distribution grids book capacity from the DSOs.

Capacity booking procedures in the transmission grid are part of the transmission agreement. The average transmission cost will depend on how the customer utilises the booked capacity.

After signing a delivery agreement, the end user will have gas delivered to its offtake point by the gas supplier during the agreed delivery period. In order to supply gas to end users, the gas supplier must appoint a balance administrator (BA). The BA can be either the gas supplier or another company with whom the gas supplier has a balance supply agreement. The vast majority of the gas purchased by the BAs comes from Denmark.

The BA has financial responsibility for ensuring that the end user offtakes have a corresponding supply. Balancing takes place on a 24-hour basis. As the transmission grid functions as storage, the tolerance level for short-term imbalances could be as high as 25 per cent of winter day consumption.

To operate as a BA, a balance administrator agreement must be entered into with Swedegas, which is the system balance administrator. This agreement governs the exchange of information, settlement and financial regulation of imbalances. Responsibility for system balance in the transmission grid entails overall responsibility for ensuring that in the short term there is a balance between supply and offtake of gas in the gas grid. 

market model