Austria-Czech Capacity Auction Proves Popular

The new Trading Region Upgrade (TRU) service, connecting the Austrian and the Czech gas markets, has received positive response from the market, said both gas grid operators July 19.

About 80% of the total offered TRU capacity from the Czech Republic to Austria (90,000 kWh per hour per year) was sold during an annual auction process held from July 2 to 16. Market participants also expressed a strong interest in purchasing TRU for shorter durations (quarter, month, day).  

The Austrian and Czech gas grid operators, namely Gas Connect Austria and Net4Gas, said that the main aim of their TRU service is to simplify transaction procedures and reduce transaction costs. They announced last month that  TRU would be tested during July and now it has been offered within a one-year pilot phase after which the product will be evaluated.

It was the first time that gas shippers had the opportunity to bid for their gas to be shipped from Austria to the Czech Republic, and vice versa, with a single contract.

There can be a strong motivation to ship gas from Czech Republic to Austria, or vice-versa. For instance, the most recent European Commission’s quarterly report on gas markets found that the average hub price in Austria of €20.65/MWh (roughly $7.05/mn Btu) in 1Q2018 was much lower than the average Czech hub price of €22.51/MWh.