Natural gas corridors between the EU and its main suppliers: Simulation results with the dynamic GASTALE model

Growth in gas demand poses a challenge for European energy consumers and other gas-importing countries in terms of an increasing dependency on gas imports and consequently also supply security. This paper focuses on interactions among demand, supply, and investments in natural gas corridors, namely pipeline transport, LNG, and storage facilities, affecting the European natural gas market over the period 2005–2030. A number of policy scenarios, including a business-as-usual (BAU) scenario, are formulated to study the impact of demand uncertainty and delays in investment on the gas transport infrastructure required in the long run in Europe. The analyses indicate that substantial investments in gas transport corridors are needed to accommodate imports and seasonal demand variations. Analysis of scenarios of supply interruption, in the form of suddenly reduced import capacity for particular pipeline routes, indicates that portions of Europe could experience price increases of up to 100% in the case of a year-long interruption. To accommodate import needs and to mitigate possible disruptions, pipeline connections running from East to West need to be given special priority.     

Identification of congestion and valuation of transport infrastructures in the European natural gas market

Rising import dependency, increasing market liberalization and cross-border trade and security of supply fears facilitate investments in natural gas supply infrastructures in Europe. In order to ensure an efficient allocation of capital resources, it is important to identify congestion in the existing system and investment requirements based on economic principles. This paper first outlines an analytical framework for the identification of bottlenecks and the evaluation of transport capacities and the cost of congestion based on nodal prices. Secondly, an infrastructure model of the European gas market with high temporal and spatial granularity which exhibits the characteristics of the theoretical model is introduced. Parameterizing the model with the existing infrastructure and applying a demand and supply scenario for the year 2015, congestion mark-ups between countries in Europe are estimated. This approach indicates potential bottlenecks which might arise within the next five years and quantifies their economic costs. With only some temporary congestion, physical market integration is found to be high in Western Europe. In Eastern Europe, severe bottlenecks are identified and discussed. Implications for efficient investment decisions arising from the findings are examined in the context of the theoretical considerations.     

All quiet on the eastern front? Disruption scenarios of Russian natural gas supply to Europe

The 2014 Russian–Ukrainian crisis reignited European concerns about natural gas supply security recalling the experiences of 2006 and 2009. However, the European supply situation, regulation and infrastructure have changed, with better diversified import sources, EU member states being better connected and a common regulation on the security of supply has been introduced. Nevertheless, European dependency on natural gas remained high. This paper investigates different Russian natural gas export disruptions scenarios and analyses short- and long-term reactions in Europe. We use the Global Gas Model (GGM), a large-scale mixed complementarity representation of the natural gas sector with a high level of technical granularity with respect to storage and transportation infrastructure. While we find that most of the EU member states are not severely affected by Russian disruptions, some East European countries are very vulnerable. Prioritizing the removal of infrastructure bottlenecks is critical for securing a sufficient natural gas supply to all EU member states.     

Hydrogen supply chain scenarios for the decarbonisation of a German multi-modal energy system

Analysing hydrogen supply chains is of utmost importance to adequately understand future energy systems with a high degree of sector coupling. Here, a multi-modal energy system model is set up as linear programme incorporating electricity, natural gas as well as hydrogen transportation options for Germany in 2050. Further, different hydrogen import routes and optimised inland electrolysis are included. In a sensitivity analysis, hydrogen demands are varied to cover uncertainties and to provide scenarios for future requirements of a hydrogen supply and transportation infrastructure. 80% of the overall hydrogen demand of 150 TWh/a emerge in Northern Germany due to optimised electrolyser locations and imports, which subsequently need to be transported southwards. Therefore, a central hydrogen pipeline connection from Schleswig-Holstein to the region of Darmstadt evolves already for moderate demands and appears to be a no-regret investment. Furthermore, a natural gas pipeline reassignment potential of 46% is identified.     

Shaking Dutch grounds won’t shatter the European gas market

The Netherlands have been a pivotal supplier in Western European natural gas markets in the last decades. Recent analyses show that the Netherlands would play an important role in replacing Russian supplies in Germany and France in case of a Russian export disruption. Lately, however, the Netherlands have suffered from a series of earthquakes that are related to the natural gas production in the major Groningen field. By consequence, natural gas production rates – that are politically mandated in the Netherlands – have been substantially reduced, by almost 45% in 2015 compared to 2013-levels. We implement this reduced production path for the next decades in the Global Gas Model and analyse the geopolitical impacts. We find that the diversification of European natural gas imports allows spreading the replacement of Dutch natural gas over many alternative sources, with diverse pipeline and LNG supplies. There will be hardly any price or demand reduction effect. Even if Russia fails to supply Europe, the additional impact of the lower Dutch production is moderate. Hence, the European consumers need not to worry about the declining Dutch natural gas production and their security of supplies.     

Mexican natural gas implications for the US market

Despite the current glut of natural gas in the USA, much future demand may not be met unless supplementary sources of supply are developed. Mexico is not now an important supply source but a September 1979 agreement may mean that large volumes of Mexican gas will be exported to the USA in the future. This paper presents a modified version of the out-of-kilter algorithm used to examine the possible impacts of this gas, with particular attention given to identification of those areas most likely to benefit from these supplemental supplies. The results indicate that if Mexican natural gas is introduced to the US pipeline network in either southern Texas or southern New Mexico in large quantities, serious pipeline capacity problems may inhibit the use of Mexican supplies as a supplementary source.     

Energy projections — Oil,natural gas and coal in the USSR and Eastern Europe

There have been many projections of energy supply and demand for the USSR and Eastern Europe, but little agreement on future trends. In this article George Hoffman assembles a variety of published forecasts of Soviet and Eastern European energy production, consumption, imports and exports. This allows comparison of the available data sources and illustrates the range of estimates for gas, coal, oil and nuclear power. The author also outlines the Soviet and Eastern European energy resource base and provides an extensive bibliography.     

Natural gas vehicles: An option for Europe

In Europe natural gas vehicles play a minor role. A decisive reason for this is the dependence of most European countries from gas imports. Except for Italy, there is no tradition to use natural gas as fuel. In addition, there is a lack of infrastructure (e.g. fuelling stations). In contrast to Europe, in Latin American and Asian countries natural gas vehicles are widespread. Some countries foster natural gas vehicles because they have own gas resources. Many countries must reduce the high air pollution in big cities. Environmental reasons are the main motive for the use of natural gas vehicles in Europe. In last years, high oil prices stimulated the use of natural gas as fuel. European governments have developed incentives (e.g. tax reductions) to foster natural gas vehicles. However, the focus is on hybrid technology and the electric car, which, however, need further technical improvement. In contrast, the use of natural gas in conventional engines is technically mature. Additional gas imports can be avoided by further improvements of energy efficiency and the use of renewable energy. In sum, the market penetration of natural gas as fuel should be promoted in Europe.     

Prospects of the European gas market

This paper discusses prospects for increased consumption of natural gas within the European Union (EU) up to 2030. Particular emphasis is on the power generation sector, where the main growth in demand is expected to occur, on supply and infrastructural constraints and on future price of natural gas.     

Vulnerability to terrorist attacks in European electricity decarbonisation scenarios: Comparing renewable electricity imports to gas imports

The decarbonised future European electricity system must remain secure: reliable electricity supply is a prerequisite for the functioning of modern society. Scenarios like Desertec, which partially rely on solar power imports from the Middle East and North Africa, may be attractive for decarbonisation, but raise concerns about terrorists interrupting supply by attacking the long, unprotected transmission lines in the Sahara. In this paper, I develop new methods and assess the European vulnerability to terrorist attacks in the Desertec scenario. I compare this to the vulnerability of today's system and a decarbonisation scenario in which Europe relies on gas imports for electricity generation. I show that the vulnerability of both gas and electricity imports is low, but electricity imports are more vulnerable than gas imports, due to their technical characteristics. Gas outages (and, potentially, resulting blackouts) are the very unlikely consequence even of very high-number attacks against the gas import system, whereas short blackouts are the potential consequence of a few attacks against the import electricity lines. As the impacts of all except extreme attacks are limited, terrorists cannot attack energy infrastructure and cause spectacular, fear-creating outages. Both gas and electricity import infrastructure are thus unattractive and unlikely terrorist targets.     

Current situation and future perspectives of European natural gas sector

Gas market in Europe is experiencing a radical change for different reasons, partially determined and accelerated by economic downturn of the last period. In the past few years, many European countries adopted energy policies largely based on the utilization of natural gas. In fact, a sharp increase of the demand was observed and, at the same time, a lot of infrastructures were developed to assure the necessary supply. In the last few years, due to the economic downturn, natural gas demand decreased, causing a consistent oversupply on the market, which altered the consolidated dynamics of the sector. Understanding the changes currently under development in the European gas market is of paramount importance in order to design future strategies for the sector; in particular, it is necessary to understand if the present situation will cause a reshaping of the sector.     

Opening address: The world gas situation

Worldwide demand and supply of natural gas may rise substantially between the years 1982 and 2000, but the rate of increase will decelerate after 1990. The rapid growth of potential demand in the first decade is expected to take place in the developing countries in particular. During this period, gas production potential will rise most rapidly in Eastern Europe (including the U.S.S.R.) and in the Third World countries of Latin America, Africa, the Middle East, and Asia. In the year which has passed since the Venice Conference, forecasts of future natural gas demand in Western Europe have been reduced from 300–350 × 10⁹ m³ (in the year 2000) to 270 × 10⁹ m³. This change has greatly diminished the expected need for gas imports into Western Europe. It has also had a positive effect on the reserve position, relative to anticipated demand, of the Netherlands, which now will consider making more gas available for Western European markets.     

A simulation approach for analysis of short-term security of natural gas supply in Colombia

Achieving security of gas supply implies diversifying gas sources, while having enough supply, transportation, and storage capacity to meet demand peaks and supply interruptions. Devising a strategy for securing gas supply is not straightforward because gas supply depends on complex interactions of production, demand and infrastructure, and it is exposed to economic, regulatory, political, environmental and technical risks. To address this complexity, we propose a simulation approach that replicates the structure of the gas supply chain, including transportation constraints and demand fluctuations. We build and calibrate a computer model for the Colombian gas sector, and run the model to assess the impact of expanding transportation capacity and increasing market flexibility on the security of supply. Our analysis focuses on the operation and planned and proposed expansions of the transportation infrastructure because adequate regulation and development of this infrastructure can contribute to increase the security of supply in the gas sector. We find that proposed import facilities, specifically LNG import terminals at Buenaventura, increase system's security under the current market structure.     

Bypassing Russia: Nabucco project and its implications for the European gas security

Restrictions on CO₂ emissions, the nuclear phase-out announced by some member states, high emissions from coal-fired power plants, and barriers to rapid development of renewable generation are factors that make the European Union (EU) highly dependent on natural gas. With three non-EU countries (Russia, Algeria and Norway) currently supplying more than half the gas consumed within the EU and with projections pointing out that by 2030 internal sources will only be able to meet 25% of demand, the EU desperately looks for means to secure new sources of gas supply. In this context, the Nabucco pipeline is planned to deliver gas from Caspian and Middle East regions to the EU market. It runs across Turkey and then through Bulgaria, Romania and Hungary before connecting with a major gas hub in Austria. On paper, Nabucco project makes perfect sense, offering a new export route to the EU markets for Caspian gas producers (Azerbaijan, Turkmenistan and Kazakhstan) as well as Iran and, in time, Iraq. The project is backed by the EU and strongly supported by the United States. Perhaps most importantly, Nabucco would completely bypass Russia. This paper addresses issues surrounding Nabucco project and their implications for the European gas security.     

The European power plant infrastructure—Presentation of the Chalmers energy infrastructure database with applications

This paper presents a newly established database of the European power plant infrastructure (power plants, fuel infrastructure, fuel resources and CO₂ storage options) for the EU25 member states (MS) and applies the database in a general discussion of the European power plant and natural gas infrastructure as well as in a simple simulation analysis of British and German power generation up to the year 2050 with respect to phase-out of existing generation capacity, fuel mix and fuel dependency. The results are discussed with respect to age structure of the current production plants, CO₂ emissions, natural gas dependency and CO₂ capture and storage (CCS) under stringent CO₂ emission constraints.     

Future evolution of the liberalised European gas market: Simulation results with a dynamic model

Strategic behaviour by gas producers is likely to affect future gas prices and investments in the European Union (EU). To analyse this issue, a computational game theoretic model is presented that is based on a recursive-dynamic formulation. This model addresses interactions among demand, supply, pipeline and liquefied natural gas (LNG) transport, storage and investments in the natural gas market over the period 2005–2030. Three market scenarios are formulated to study the impact of producer market power. In addition, tradeoffs among investments in pipelines, LNG liquefaction and regasification facilities, and storage are explored. The model runs indicate that LNG can effectively compete with pipelines in the near future. Further, significant decreases in Cournot prices between 2005 and 2010 indicate that near-term investments in EU gas transport capacity are likely to diminish market power by making markets more accessible.     

The prospects for liquefied natural gas development in the US

The objective of our paper is to analyze the prospects for LNG development in the US. In particular, we discuss LNG investment projects with respect to natural gas supply and demand, existing transmission infrastructure, and competing pipeline projects. At the same time potential competition between natural gas and coal in power generation is taken into account. We conclude that in the mid-term, LNG will assume an essential role in meeting US demand because of stagnating and declining domestic production in North America accompanied by an expected increase in demand for natural gas. Additional net imports will be required in the western US (mainly southern California), the Southeast, and in the Northeast—three areas of the nation that lack adequate supply. When accounting for the current status of existing natural gas infrastructure and forthcoming investments, we conclude that there should be little concern about sufficient investment incentives and supply security in the US competitive natural gas market.     

Exploration of the land potential for the production of biomass for energy in the Netherlands

The energy potential for energy crops and biomass residues in the Netherlands is assessed. The analysis explores the possible use of land for biomass production in the future. Various government memorandums and analyses of the expected future land use in various sectors have served as the basis for the assessment of the supply of and the demand for land in the future. In this study the potential supply of agricultural land is based on expected productivity increments in agriculture and assumptions with respect to the future demand for agricultural products. Various future claims for infrastructure, forestry, urban areas and nature are subtracted from the expected supply. The net projected supply of land ranges from zero to 52 000 ha in 2000 to 110 000-250 000 ha in 2015. The supply of agricultural land depends however on a number of supra-national factors, such as the European agricultural policy, world market developments and the agricultural production in the countries in Eastern Europe. Uncertainties remain, therefore, and the projected supply of agricultural land should be considered as a possible scenario based on current trends. If the calculated land potential is used for energy crops like miscanthus and short rotation coppice, this land could contribute 0-10 PJ in 2000 and 27-59 PJ in 2015. Secondary biomass yields, such as those from forestry, agricultural residues, wood from prunings, etc., could contribute a further 34 PJ in 2000, decreasing to approximately 28 PJ in 2015. Taken together these potentials could satisfy 1-1.5% of the energy requirements of the Netherlands in 2000 and 1.5-2.5% in 2015, provided that energy farming is an economically feasible activity for farmers.     

On-site hydrogen production from transportation fuels: An overview and techno-economic assessment

Hydrogen production for future transportation applications have received increased interest due to its inherent environmental and efficiency benefits. Currently, hydrogen is produced from natural gas and naphtha for its use in refineries for clean fuel production along with its use in ammonia production. The hydrogen demand will grow in future for hydrogen based fuel cell vehicles. Significant research is underway to produce hydrogen from renewable and fossil fuel sources. However, on-site hydrogen production using existing fuel and gas station infrastructure to support future hydrogen based fuel cell vehicles has advantages over other approaches. In this context, this study is focused on a techno-economic assessment of hydrogen production from transportation fuels using different conversion technologies. In addition, detailed economics with higher capacity and volume of the hydrogen stations are also discussed. Finally, a detailed roadmap is presented to produce on-site hydrogen at commercial scale.     

Natural gas in Australia

Due to the Soviet-Western European gas ‘deal’, there is an oversupply of natural gas in international markets at present. What this transaction did, among other things, was to start large amounts of Algerian gas moving into Europe after an interruption of almost two years; and it also informed several other potential large-scale exporters of gas that they could not expect to experience a sellers' market for natural gas in the foreseeable future. Consequently, there is an expanded supply of gas, and a downward pressure on gas pricese verywhere. Norway, for example, has expressed a willingness to sell large quantities of natural gas to the UK in the 1990s at prices that would have been unthinkable several years ago. Worldwide, natural gas reserves are increasing more rapidly than production, and the reserve-production ratio for gas is now 58 years (as compared to 33 for oil). In the USA additions to reserves failed to match production in 1984, but the principal problem in that country at present is a general oversupply of all energy sources, including electricity.