A primary concern of the European Union in recent years has been to promote the stability and assurance of the supply of energy to Member States. The European Council has identified the LNG chain as a way to achieve this goal, leading many EU-member States to adopt incentive regulations to encourage companies to build new regasification plants. Our paper discusses and compares these regulations and then focuses on the Italian case. Italy is very reliant on natural gas, but still has no importation infrastructures operated by newcomers. This has prompted the Italian authority to implement a special incentive regulation aimed at facilitating the entry of newcomers to the market. This regulation (No. 178/05) has attracted a higher filing of new infrastructure plans than all those filed in the rest of the EU combined. Our paper claims that this regulation is over-weighted on the incentive side, with the risk that it will both reduce the possibility of newcomers to enter the market and create considerable costs to the entire Italian gas system.
Keywords: LNG, incentive regulation
Jel Code: L95, K12, F14, L11