Gas storage and Security of Supply Robert Jan Maaskant Vice-Executive Secretary 4 June 2015, Brussels, Belgium
Agenda Value of Storage & security of supply 1 Actual use of gas storage 2 Market & policy developments 3 Wrap-up 4 2
Agenda Value of Storage & security of supply 1 Actual use of gas storage 2 3 Market & policy developments Wrap-up 4 3
Value of storage 4
Value of storage 5
Value of storage 6
Value of storage 7
Gas storage and SoS European Commission: LNG (33%) and storage (28%) play an important role in case of an interruption of gas supply in East Short-term measures: use of existing infrastructure Medium/ long-term measures: building infrastructure Source: European Commission, Stress test communication, 16 October 2014, COM(2014) 654 final, page 5 8
Agenda Value of Storage & security of supply 1 Actual use of gas storage 2 3 Market & policy developments Wrap-up 4 9
Use of gas storage 2013-2014 MILD WINTER SUMMER WINTER Injection period Withdrawal period Source: ENTSOG data 10
Use of gas storage 2012-2013 LONG AND LATE WINTER SUMMER WINTER Injection period Withdrawal period Source: ENTSOG data 11
Use of gas storage 2011-2012 COLD SPELL SUMMER WINTER Injection period Withdrawal period Source: ENTSOG data 12
Gas storage level (%) – EU 28 13 May 2015: gas in stock 28.3 bcm, 31.3% full Lowest point on 9 April: 23.2 bcm in stock, 25.0% full 13 May 2015: 31.3% full Source: GSE AGSI+ database 13
Gas storage levels (beginning and end of heating season) 2011/12 2012/13 2013/14 2014/15 Cold spell Long/ late winter Mild winter Normal winter 14
Gas storage use in winter 2014 – 15 • High gas storage levels before start winter (>90%) due to high levels in March 2014 • Relatively warm winter, but significantly higher withdrawal rates • Gas storage level vary from year to year significantly depending on various factors on the wholesale market 15
Agenda Value of Storage & security of supply 1 Actual use of gas storage 2 Market & policy developments 3 Wrap-up 4 16
Summer-winter spread is an important driver for gas storage use Summer-winter spreads currently historically low Source: Timera Energy, (http://www.timera-energy.com/market-benchmark-for-gas-flexibility-value/) TTF 17
EU agenda • Review of the security of supply regulation • Projects of common interest list • Gas storage strategy under the Energy Union • Discussion on network code on transmission tariffs 18
Ongoing discussion on SOS in the gas sector on national and EU level It‘s definitely not The market will Things have always part of our surely fix it! turned out well! responsibility! 19
GSE reaction to SoS study and review of 994/2010 Review 994/2010 • Physical backing for supply standard needed: gas storage ensures physical availability close to demand and ‘a hub has never produced any gas’ • Member States should be able to increase supply standards if needed • Member States should be able to make pivotal gas-fired power plants protected customers, provided they are physically backed by firm capacity SoS study Various Member States have various mechanisms in place, SoS tools depend on a.o.: • Import dependency • Ability to cover seasonal modulation needs and peak demand • Demand ratio between summer and winter. • Structure of gas demand (household, industry, power generation etc.) • Characteristics of the existing storage facilities 20 • Compliance with Regulation 994/2010 on security of supply, etc
Agenda Value of Storage & security of supply 1 Actual use of gas storage 2 3 Market & policy developments Wrap-up 4 21
Wrap-up gas storage & SoS • AGSI+ and ENTSOG data show that gas storages are used, although willingness to pay is low • TYNDP and investment databases show that there are still projects being developed. • Market prices are low: risk of decommissioning/ mothballing, not a driver for investments • It will be interesting to see how planned projects will be realised in the coming years... – Summer-winter spreads continue to be the one of the key drivers to store gas – currently low summer-winter spread, development unpredictable – (EU) government intervention could play a role in realising some of the necessary infrastructure • Gas storage is key to ensure Security of Supply 22
GIE is proud to support Thank you for your attention 23
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