Decarbonising gas markets: How could the EU Gas Package impact the UK?

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This notice is to alert bidders to a call for competition for the DESNZ commissioned research that focuses on: - Identifying areas of regulatory divergence between the UK and the EU. - Evaluating the impacts of divergence on market dynamics, competition, and energy security. - Assessing the impacts on natural gas, hydrogen, and biomethane trade between the UK and the EU. The specification and tender documents are published on the DESNZ Jaggaer portal: https://beisgroup.ukp.app.jaggaer.com/go/96581074019354733734 The maximum value and length for this contract is £50,000 exc VAT over ~3 months. However, bidders are encouraged to highlight where efficiencies in time and cost can be made in their bid. The Department for Energy Security and Net Zero (DESNZ) is looking to commission research to improve our understanding of the Package and its possible effects on natural gas, hydrogen and renewable gas markets in the UK and the EU. The primary objectives of the analysis we seek to tender will be to: Identify areas of potential regulatory divergence: Identify and analyse specific areas where regulatory differences exist or may emerge between the UK and the EU concerning natural gas, hydrogen and biomethane markets, including pricing mechanisms, market structures, environmental and emissions standards, and certification as a result of the EU's Decarbonised Gas and Hydrogen Package. Evaluate the impacts on market dynamics: Investigate how identified actual or potential regulatory divergence influences market dynamics, such as competition, investment, and market liquidity, within both the UK and EU gas markets and the potential impact on hydrogen and biomethane markets. Examine trade implications and risks/opportunities for the UK: Assess the impact of identified actual or potential regulatory divergence on natural gas, hydrogen and biomethane trade between the UK and the EU, including changes in import/export volumes, tariffs, and market access barriers. Assess the opportunities as well as risks to alignment/non-alignment. Assess implications for energy security: Examine how regulatory divergence may impact energy security in the UK and EU, including supply reliability, diversification of sources, and infrastructure investments. The project will involve two parts, one being an analysis of potential areas of divergence, with the second analysing the impacts of divergence through scenario modelling. This will meet the primary objectives of the project: Support policy recommendations: Inform policy decisions on security of supply, gas market decarbonisation, biomethane and hydrogen frameworks. Support UK-EU Energy cooperation: Provide objective analysis to support negotiations with the EU on cooperation on natural gas, biomethane and hydrogen markets.

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