In the second workshop on the RCGILex tool, presenter Fernanda Munari Caputo pointed out the challenges to a free market for natural gas and the means proposed for overcoming them.

There are countless challenges to the development of a free market for natural gas, regulatory, as well as marketing and logistics. In a workshop held last June 8, at the headquarters of the FAPESP Shell Research Centre for Gas Innovation (RGGI), in the Polytechnic School of the University of São Paulo (Poli-USP), in São Paulo, lawyer Fernanda Munari Caputo focused on some of the legal barriers, such as access to gas transportation pipelines, transparency in the offering of contracts and services, and the demand of a minimum consumption level for so-called free consumers.

She was the presenter for the second RCGILex Workshop – a tool created by RCGI’s Project 21 to bring together and analyze Brazilian and São Paulo legislation regarding natural gas (NG). The event, coordinated by Professor Hirdan Katarina de Medeiros Costa, was attended by 16 people, including Professor Luis Antônio Bittar Venturi, coordinator of RCGI’s Project 28.

Fernanda compared the legislation for the NG and electrical power sectors, listing the regulatory frameworks of each one. She also enumerated the main proposals of Subcommittee 8 (SC8) of the “Gas for Growth” initiative for the development of a free market for natural gas, and compared it with what already exists in the electrical power market, besides pointing out the barriers to a free market for natural gas.

“In the electrical power sector, despite the dynamic market, there are many ordinances and resolutions that are not aligned with each other. In the natural gas sector, we have the Natural Gas Law and a few regulations. Nevertheless, there is still no actual free market,” said Ms. Caputo, who is a Master’s degree student in the Institute for Energy and the Environment of the University of São Paulo (IEE/USP).

Among the various challenges to the development of the market, some of those mentioned by the researcher were the extension of the gas pipelines, the transparency of the contracts, and the demand of a minimum level of consumption for qualifying as a free consumer.

“This is a good example of the barrier. In the State of Amazonas, the minimum level of consumption is 500,000 m³/day.” In her assessment, that is an exceedingly high amount and makes it unfeasible for a consumer to enter the market.

“In the United States, there are power and gas models but, here, the natural gas and electrical power sectors seem to be competing with each other, despite the great potential for cooperation between the two energy sources. Our perspective is to study the power and gas model in other countries and see if it is feasible for application here,” stated Professor Luis Antônio Bittar Venturi, who studies the substitution of electrical energy by NG in residences in the city of São Paulo.

“The smart city and smart grid concepts must be taken into account in the case of the study of substituting residential energy sources,” reminded Professor Hirdan Katarina de Medeiros Costa, RCGILex coordinator. “The smart networks, for example, allow integration with micro and mini generators.” 

The RCGILex workshops are being promoted since May and will carry on into November. One of the goals is to familiarize the group of collaborators in Project 21 with this tool, which is an annotated repository of Brazilian and São Paulo NG legislation.