Entry in European natural gas retail markets: accessing the right contract “portfolio”

The ambitions of the European Union at the end of the 2^nd millennium concerning energy policy were noble: creating energy markets that are competitive, secure and sustainable. Although the progress made in creating a common natural gas market is significant, the Energy Sector Inquiry identified a number of shortcomings related to the competitiveness of the markets. This paper looks at a particular building block for the creation of competitive markets: market entry. The authors identify and explain the ldquoportfoliordquo of tools required for a gas market player who is developing retail activities. Secondly, the availability of a balanced portfolio to new entrants is evaluated based on publicly available literature. Analysis of publicly available data suggests that entrants still face difficulties in constructing the right portfolio. Finally, some solutions for facilitating market entry are recommended.