Transcript Diapositive 1 - Energiatalgud

EUROPEAN GAS MARKET :
The challenges to face
WEC-Europe regional meeting
MONACO
Jean-Marie DAUGER
November 7, 2012
Executive Vice-President
GDF SUEZ
The challenges of natural gas in Europe
Acceptability of natural gas and long
term perspectives on demand
Competitiveness of natural gas
Accessibility and security of supply
Energy policies at national and
European levels
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Natural gas in Europe
Acceptability
Low CO2 emission – High efficiency
Flexible & complementing reneweables
Innovative solutions in the residential
and transportation sector
Economic
 High capital performance
 CCG are quick to build
GDF SUEZ, CCGT Herdersbrug, Belgium
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Natural gas in Europe
Competitiveness
Gas remains a cost competitive base load generation technology in the long
term, but the gas price is a critical driver of overall cost
Type of generation
Generation
technologies
Coal Conventional
Gas Conventional3
EUR/MWh, 2030
Average LCOE of new builds1
9 3
Coal CCS
Gas CCS
Fossil
Nuclear
Intermittent
3
16
39
36
10 4
6
Coal CCS retrofit
N/A
Gas CCS retrofit
N/A
Oil
N/A
38
Wind Onshore
38
13
8
59
87 63- 97
75
98
106
65 – 105
Capex4
Fuel3
Opex
Range of fuel prices
59
8 0 46
78
17
81
9
0 76
103
8 0 89
72
Solar CSP
22
33
40
59
Wind Offshore
100
85
Carbon2
Nuclear
Biomass dedicated
34
44
Solar PV
RES
27
15
27
14
High estimate6
31
30
0 103
61
Non-Intermittent
Geothermal
Hydro
27
13 0 39
53
SOURCE: ECF roadmap 2050, Centrica, MoH MaCDonald UK electricity generator costs update
2 55
0
(1) Average of low and high cost estimates. Exchange rate of 1.1 EUR/GBP, (2) Assuming a carbon price of 44 EUR/tonne, (3) Based on IEA price forecasts and a gas price of 7.50 USD/mmbtu (base case shown) and 14.8
USD/mmbtu (high case), assumed load factor of 85%, (4) Assumes 7% discount rate, (5) Including storage cost of 1.11 EUR/MWh and transportation costs of 1.46 EUR/MWh (source: Centrica), (6) High estimate based on
Mott MacDonald ‘case 8’ pg 88 estimates for 2023 Nth of a kind at 7.5% cost of capital (compared to 7% for ECF), carbon prices adjusted to match ECF for the purposes of comparison, and a gas price rising to approx 12
USD/mmbtu by 2030
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Natural gas in Europe
Competitiveness
For mid-merit order load factors (4,500 hours per year) and at low gas price,
gas looks most attractive
Type of generation
Generation
technologies
Coal Conventional
Gas Conventional3
Average LCOE of new builds1
27
14 4 15
Coal CCS
Gas CCS
Fossil
Nuclear
Intermittent
RES
5
44
24
Coal CCS retrofit
N/A
Gas CCS retrofit
N/A
Oil
N/A
Nuclear
N/A
Wind Onshore
N/A
Wind Offshore
34
N/A
Solar PV
N/A
Solar CSP
N/A
Biomass dedicated
N/A
Geothermal
N/A
Hydro
N/A
39
27
38
29
15 4
82
34
98
71-100
97
36
45
67
EUR/MWh, 2030
22
79-115
8 97
Capex4
Fuel3
Opex
Range of fuel prices
Carbon2
10
30
74
Non-Intermittent
SOURCE: ECF roadmap 2050
(1) Average of low and high cost estimates, (2) Assuming a carbon price of 44 EUR/tonne, (3) Based on IEA price forecasts and a gas price of 7.50 USD/mmbtu (base case) and 14.8 USD/mmbtu (high case)
(4) Capex is assumed to spread in a NPV neutral way, (5) Including storage cost of 1.56 EUR/MWh and transportation costs of 2.44 EUR/MWh (source: Centrica)
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Natural gas in Europe
Competitiveness
Optimized pathways to achieve CO2 reduction targets by relying on natural
gas
Lower costs to
households(1)
€150-250 lower
annual cost of
power per
household
Profits in energy
intensive
industries(1)
Jobs in energy
intensive
industries
Consolidated
investments
5-10% decrease in
profit margins will
be avoided driven
by energy price
increases in
alternative
renewables-heavy
scenarios
20-25 mln jobs will
not be affected by
higher energy costs
in energy intensive
industries
Up to € 450-550 bn
lower required
investments in 201030 compared with
renewables intensive
pathways, with
further savings
potential in 2030-50
Source: European Gas Advocacy Forum
(1)
Includes direct and indirect effects of lower costs in power generation
not additive)
(2) Compared
with ECF Roadmap 2050 60%-RES pathway (Numbers are
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Natural gas in Europe
Competitiveness
The competitiveness of natural gas is now challenged by coal in the power
production sector
The lasting spread between oil indexed long term contracts and spot prices is not
sustainable
All data converted in Million British Thermal Units
Source: IFRI, based on USDOE, International Coal Report, World Gas Intelligence
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Natural gas in Europe
Competitiveness
In 1997 Kyoto: 8% reduction target for
2012 compared to 1990 for EU-15 (EU-15
on track to reach its Kyoto target)
Actual and projected emissions (MtCO2-eq.) for EU-15
In 2012: Energy Roadmap to reach a 80-95%
reduction target in 2050 but incentive
mechanisms to be strengthened
CO2 price in 2011
Source: EU Commission, September 2012
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Natural gas in Europe
Security of supply
A declining conventional indigenous production
Uncertainties on the development of unconventional gas
Increased import needs
2011: 550 bcm
Dependence: 50%
Pipeline imports
Russia
Central Asia
27%
Conventional
production
50%
+ 1.3%/year
2030: 740 bcm
Dependence: 80%
Pipeline imports
Mddle East
Africa
8%
LNG imports
Other
1%
LNG imports
Middle East
Africa
14%
Imports
Russia
Central Asia
44%
Conventional
production
15%
Unconventional
production
5%
Doubling of net imports by 2030
(2030: 500 – 580 bcm)
LNG imports
Middle East/Africa
17%
Pipeline imports
Middle East/Africa
12%
LNG imports
Other
7%
Source: CEDIGAZ, Reference Scenario
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Natural gas in Europe
Security of supply
Increasing liquidity on European market places


Spot-linked gas volumes: 42% in 2011, 45% in 2012 (SG)
Physical volume on hub and virtual market place in 2011: 47% (IEA)*
Sharp acceleration of the process towards a unified market
On-going discussions on the Gas Target Model
Total traded volumes in Continental Europe market
places (in TWh)
Source: IEA
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Natural gas in Europe
Security of supply
Sustained investments from the natural gas industry in infrastructures
Supplies and transmission routes diversification to improve security of supply
The Southern Gas Corridor
Nabucco and Nabucco West pipeline
NORD STREAM
SOUTH STREAM
Trans Adriatic Pipeline project
GALSI
SOUTHERN GAS
CORRIDOR
Source: Eurogas
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Natural gas in Europe
Security of supply
Unconventional gas: A potential to
be further assessed
Role of the industry
Europe unconventional supply potential
60
 Promote industry best practices
50
40
 Resource management
30
Bcm
 HSE
Role of public authorities
 Promote exploration to better assess the
potential
20
10
0
2010
2015
2020
2025
2030
 Harmonization of regulation
Woodmac (2011) Lower Range
IEA (2011)
 Public awareness
CERA (2009)
Rystad Energy (2010)
European commission (2010)
Upper Range
 Public acknowledgment of importance of UCG
in future energy market
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The European energy context
An evolving European regulation:
 A roadmap 2050 consistent with the objective of energy independence and reduction of
greenhouse gas emissions;
 With a need for a reliable carbon market;
 A Gas Target Model aiming at creating a global European gas market;
With emerging new national energy policies:
 Following Fukushima, Germany and Switzerland are to phase out nuclear, and Italy decided
not to develop its nuclear program, paving the way for an energy transition and a potential
increased role of natural gas;
 The UK favors a low-carbon economy through its Electricity Market Reform and Capacity
Mechanism but refocuses on gas;
 Gas-to-power demand is increasingly affected by competition from renewables and, in the
short run, from cheap imported coal
On the supply side, Europe should ensure renewed import capacities from
historical partners such as Russia and Algeria, and also find new volumes from
other sources:
 Unconventional gas resources: what level of production?
 New pipe and LNG import needs to Europe
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