2020 ERRA Regulatory Research Award Winner Paper

A proper allocation of cost is key for a fair and liberal gas market both between intra- and cross-system transport as well as inside intra-system transport. Thus, we define three network levels of gas transport: transmission, domestic regional and domestic local – regardless of affiliation to system operators. We derive a tariffing model for those levels striking a balance between cost allocation, a liberal market and overall economic optimization. Relying on the example of Germany, an important gas network in different transport levels with a heterogeneous owner structure, we show how the proposed model can effectively reduce or prevent negative effects such as pancaking.