Transcript TSO’s and long-term security of gas supply in Europe

TSOs and Long-term Security of Gas Supply in
Europe
Peter A. Hodal
Vice President of Gas
Transmission and System
Operations, Energinet.dk
TSOs and Long-term Security of Gas Supply in Europe
Framework: Natural gas will continue to be an
important part of the energy-mix in Europe!
Increasing demand for Energy in EU
Today natural gas constitutes 24% of Europe’s energy-mix
Expected to be at least 28% i 2030 (IEA)
IEA (WEO 2007) estimates that EU demand for natural gas will
increase by 1,4%/year from 2005-2030 (550 bill. m3 to 771 bill. m3)
The fastest growing primary energy source in the developed world
Gas to power generation a main driver
The Climate issue
Fossil fuels will continue to be an important part
of the energy-mix - cannot be ruled out ’overnight’
– unless dramatic fall in overall energy demand!
Natural gas has the lowest CO2-emission of the
fossil fuels – almost 1:2 compared to Coal!
TSOs and Long-term Security of Gas Supply in Europe
Framework: Natural gas will continue to be an
important part of the energy supply in Europe!
Characteristics/advantages of natural gas
Main producers are close – Worlds largest reserves in
the neighbouring countries/regions - Russia, Norway, Africa,
Middle East
It can be traded globally –
Increasing relevance of LNG
It can be stored
TSOs and Long-term Security of Gas Supply in Europe
But also…
EU indigenous production decreasing: Increasing import
dependency
Increased global competition on fossil fuels – coal, oil, gas
Secure and ’cheap’ supplies can no longer be taken for granted!
Gas will have to be transported over
longer and longer distances to
come to Europe
TSOs and Long-term Security of Gas Supply in Europe
What can be done?
Need for massive investment in infrastructure in EU, particularly
cross-border. IEA estimates 400 bill. $ towards 2030 (of these
160 bill. $ on transmission & distribution)
Better integration of the European network, physically and in
terms of network codes/rules, procedures, IT-platforms
Diversification of suppliers/supply routes
TSOs and Long-term Security of Gas Supply in Europe
What can be done?
Necessity of longer-term contracts (but not for the full
capacity!)
Increased need for storage! (consequence of the longer
transports)
Need for European, not national, security of supply strategies
due to falling domestic production,
EU/TEN funding of strategic projects (such as the Nabucco
feasibility study)
Strategic storages –
Denmark already
has such a setup
TSOs and Long-term Security of Gas Supply in Europe
Market and security of supply – brothers in arms!
Suppliers (Shell): ”An open and competitive, liquid and
interconnected single European market is crucial”
Will make gas move around quickly
Harmonisation of rules on a European level: The importance
of an effective coming ENTSOG, composed by independent
TSOs
But also focus on regional strengthening to secure faster
development of markets!
What will help diversification of supplies? Big buyers with
negotiating powers - or a liquid, competitive market with
many players?!
TSOs and Long-term Security of Gas Supply in Europe
The role of TSOs in gas supply security
Security of supply lies within the ’task-portfolio’ of TSOs
TSOs has the know-how, expertise and overview
TSOs must show the necessary will and courage to invest –
the need is there!
Necessity of improved demand-supply information and
forecast by unbundled/neutral TSOs
Improved options for collaboration between TSOs and SSOs
Open season procedures conducted by the TSOs (in pairs for
border points)
Neutrality/Objectivity: Independent and unbundled TSOs are
the best to play this role!
TSOs and Long-term Security of Gas Supply in Europe
What is Energinet.dk doing today?
Denmark is currently exporter of natural gas
But North Sea gas production
will go ’off plateau’ within 5 yrs.
Led to GISA - Gas Infrastructure
Analysis project, where
Energinet.dk assesses all
options
Diversification of supply routes
TSOs and Long-term Security of Gas Supply in Europe
Does the 3’d package provide the tools?
Points in the right direction as regards security of supply:
Ten years statement/forecasts on a national and European
level
Effective ENTSOG for faster code and rule development (but
ownership or ISO unbundling crucial for strong and credible
ENTSOG development)
ACER and the Commission are granted important roles to
assist and ensure ENTSOG progress.
Improved options for cross-border investments: Regulators
and ACER to secure investment decisions are made
TSOs and Long-term Security of Gas Supply in Europe