The Danish and Swedish gas markets merge today
A more efficient gas market, closer regional collaboration and more market players: these are the main benefits Denmark and Sweden can look forward to after integrating their gas markets.
Today, 1 April, the Danish and Swedish gas markets will merge when the cross-border balancing zone in the wholesale gas market enters into force. The preliminary work has been ongoing since 2017, and the two countries’ gas TSOs (Transmission System Operators), Swedegas and Energinet Gas TSO, have worked closely with a number of government agencies and market players to develop the solution.
The market integration is colloquially called JBZ, which stands for joint balancing zone, meaning that the market players do not have to balance the Danish and Swedish markets separately.
The project will result in closer links between the two markets, and is in line with European efforts to ensure closer regional collaboration in the energy markets.
- We want it to be simple and attractive for industry, the transport sector and private individuals to choose gas – especially green gas. And with a joint Danish-Swedish system, more gas suppliers will be able to bid on the Swedish market, says Johan Zettergren, CEO of Swedegas.
- It’s a big day for the Danish and Swedish gas markets. After more than 30 years of closely connected, neighbouring systems, we’re finally taking the plunge and merging our balance markets. Increased cross-border collaboration definitely helps strengthen the markets. I expect that the joint balancing zone will make gas trading across the Danish-Swedish gas market more efficient and increase competition throughout the region, says Jeppe Danø, Gas Market Director at Energinet.
What will happen physically on the border between Denmark and Sweden?
To enable the markets to be integrated, a small change has been made to the way the underlying physical system is operated. From 1 April, the pressure in the Danish and Swedish transmission systems will gradually be equalised. To put it simplistically, the valve in Dragør will be fully opened. Before 1 April, the Swedish transmission system was operated at lower pressure than the Danish system. For this reason, the opening of the valve means that the Swedish system will experience more linepack build-up. Linepack is the volume of gas that can be stored in the pipes, and the pressure in the pipes affects the volume of gas. As a result of the JBZ, the linepack in the two systems will be merged, and much of it can be made available to the market in the form of linepack flexibility.
For more information, see the project webpage: https://en.energinet.dk/Gas/Shippers/Swedegas-Joint-Balancing-Zone