Gas security of
supply report 2016
Preface ... 4
Summary ...5
1. Security of gas supply...7
1.1 Gas security of supply in the European context ...7
1.2 Energinet.dk responsible for security of gas supply ... 8
1.3 Infrastructure ... 10
2. The past year... 12
2.1 No security of supply incidents in 2015-2016 ...12
2.2 Gas consumption unchanged during past year ...12
2.3 Gas supplies from the North Sea ...13
2.4 Use of the transmission grid ...14
2.5 More and more biogas plants ...15
2.6 Use of gas storage facilities ...15
2.7 Satisfactory gas quality ...15
2.8 Plentiful gas on the market in 2016 ...16
3. The coming winter ...19
3.1 Capacity orders 2016-2017 ...20
3.2 Distribution and dimensioning ...21
3.3 Gas quality during the coming winter ... 22
4. The future development ...23
4.1. Consumption trend in Denmark ... 23
4.2 Consumption trend in Sweden ...24
4.3 Gas supplies to Denmark impacted by Tyra ...24
4.4 Gas supply situation ... 25
4.5 Gas storage capacity ... 27
4.6 Infrastructure after 2016... 27
4.7 Assessments for the European gas system ...29
4.8 Transmission tariffs ...30
4.9 Information security becoming more important ...31
5. Ensuring security of supply ...33
5.1 Risk assessment ...34
5.2 Preventive action plan ... 35
5.3 Emergency plan ... 35
5.4 Contingency planning and drills ...36
5.5 Assessment of security of gas supply ...37
Contents
Gas security of supply report 2016
The report can be downloaded in Danish at:
www.energinet.dk/gasforsyningssikkerhed-2016 The report can be downloaded in English at:
www.energinet.dk/security-of-supply-2016 Photos: Reorganising of electricity and gas lines by Energinet.dk at Enghave Brygge in Copenhagen to enable a new residential area, new infrastructure and a metro station.
Security of supply for Danish gas continues to be very high.
While it is not clear whether natural gas production from the North Sea will continue at the same level, Danish security of supply will remain high due to expansion of transport capacity to Germany.
The aim of this 'Gas security of supply report' is to report on security of supply developments and coming initiatives, and to assess security of supply in the Danish gas system in accordan- ce with the Danish Executive Order on maintaining security of natural gas supply. The report is an annual report from Energi- net.dk to the Danish Energy Agency and participants in the gas sector.
The report begins with a brief description of the general level of security of supply. The aim of this description is to put the level into perspective in terms of multiple parameters, inclu- ding time (today and in the future), geography (in Denmark and the rest of Europe) and Energinet.dk's responsibility in this area.
This is followed by a description of the past year in relation to a number of key figures, such as consumption, supplies, inci- dents, and the use of gas storage facilities, the transmission grid and international connections.
Winter is the most difficult season for the gas market, and cal- culations are made ahead of each winter to ensure everything will run smoothly. The report describes the key figures from these calculations for the coming winter.
The future is described in terms of the challenges Energinet.dk is facing and the initiatives planned in order to maintain the high security of supply in the long term. To cover a wide spec- trum, expected values are considered as well as sensitivities in the form of deviations from expectations.
Finally, the report presents an overall assessment of security of gas supply and the measures helping to secure the supply.
Preface
Denmark has a high security of gas supply. The Danish gas market can be supplied from production in the Danish North Sea gas fields, the European gas market through connections to Germany, and two Danish gas storage facilities. There has never been a breakdown in the Danish gas transmission system – including 2015 and 2016 – and ongoing technological overhauls and efficient operation minimise the technical risks of breakdown.
In this security of supply report, Energinet.dk finds that the Danish gas transmission system is resistant to breakdown – even at times of high gas demand.
The past year
Despite periods of maintenance in the North Sea during winter 2015-2016, leading to less flow to Denmark, the market was fully able to ensure supplies to customers. This is because Den- mark can also be supplied with gas from the gas market in North West Europe, highlighting the importance of recent ex- pansion of import capacity across the Danish-German border.
There were no security of supply incidents or disruptions to consumers in 2015 due to the gas transmission system. The last Early Warning incident was in 2013. It was resolved through market measures which ensured a greater flow of gas from Germany. There was a single IT incident in 2015 which had no impact on security of supply.
Supply situation during renovation of Tyra
Gas supplies to Danish and Swedish customers can still be
maintained if the Tyra platform in the North Sea closes tem- porarily in 2018. In that case, the Danish gas system will ope- rate closer to its capacity limits and will therefore be more vul- nerable to incidents. When the system is operating closer to its limits, higher price spikes in the gas market will be expected during the renovation period.
Thanks to expansions to capacity across the Danish-German border and two gas storage facilities, Danish and Swedish customers can continue to be supplied as before. Only if there is an extremely long, hard winter, supply problems might arise.
If the Tyra platform comes back online after the renovation, the Danish gas system will again be well supplied. If Danish Under- ground Consortium (DUC) decides to close the Tyra platform permanently, the supply situation will have to be reviewed so that additional measures can be initiated to address the redu- ced flexibility in the longer term.
New connection - Baltic Pipe
In cooperation with Polish TSO GAZ-SYSTEM, Energinet.dk be- gan a preliminary investigation into a possible connection be- tween the Danish and Polish gas systems – Baltic Pipe. The preliminary study is being carried out by an external consul- tancy company. In addition to a pipeline across the Baltic Sea between Poland and Denmark, the preliminary investigation covers a connection between the Danish and Norwegian gas networks in the North Sea. If Norwegian gas flows to Polish consumers, it will add flow to the Danish gas system. Increased transit is expected to lead to economic benefits.
Summary
The Polish TSO and Energinet.dk are preparing for the joint sale of long-term capacity contracts via an 'Open Season' process.
The result of offering these will subsequently be included in the final economic assessment. If the project is approved by both TSOs, the capacity contracts can be signed with market participants. This is expected to take place in autumn 2017.
European security of gas supply
During a period of strained political relations in and around Europe, security of supply remains an issue in Europe, as the EU is importing increasing volumes of gas, primarily from Russia.
The European Commission presented a proposal for revising the EU regulation on security of gas supply in early 2016. The key element is a stronger solidarity principle, based on a more regional approach to supply crises. The revised regulation pro- poses stricter requirements to help neighbouring countries in the event of a regional supply crisis. The new regulation is ex- pected to be adopted in early 2017.
Within a European security of supply context, the European Network of Transmission System Operators for Gas' (ENTSOG) evaluation also shows that Danish security of supply conti- nues to be strong.
Bio natural gas production increasing
Bio natural gas has been injected into the grid since 2012, and this will continue in increasing quantities. Most of the bio na-
tural gas will be injected into the distribution grid, while some of it will be elevated to the transmission grid. Bio natural gas must meet the same quality standard as natural gas, but may also contain residual oxygen from desulphurisation. The speci- fications for oxygen levels in the Danish gas system differ from the oxygen content in the German system. As a result, Energi- net.dk had to limit flow capacity to Germany for approx. 3 months in July 2016. The restriction was lifted when Energi- net.dk and Gasunie Deutschland, the natural gas TSO in Ger- many, agreed on a procedure for handling the situation.
1 TYNDP15, ENTSOG
Historically, Denmark has had a high level of security of gas supply. Continuous expansion and operational improvements have minimised the technical risks related to security of supply.
As a result, there has never been an incident in the Danish gas transmission system that led to disruption for consumers.
The increase in import capacity across the Danish-German border significantly improves security of supply – Denmark can now receive gas from domestic sources in the North Sea and also import it from the gas market in North West Europe. This proved extremely useful during long-term maintenance activi- ties in the North Sea in 2016.
Security of supply for gas consumers often depends on the market or on international circumstances. Although Denmark is self-sufficient in gas from the North Sea, much of the gas produced there can be freely supplied to either the Nether- lands or Denmark – only the player's commercial considera- tions determine where the gas flows. Energinet.dk supports security of supply by purchasing storage capacity, among other initiatives. These purchases can be used if an emergency supply situation arises.
1.1 Gas security of supply in the European context
Security of supply in the gas sector is increasingly affected by European regulation, as EU member states face a common challenge in that they consume far more energy than they produce. This is a strategic challenge, which has become parti-
cularly evident at a time when political relations with Russia are strained, given that Russia is also the largest supplier of gas to the EU.
In 2015, the EU imported about one third of its gas consump- tion from Russia. The EU is Russia’s largest gas customer, crea- ting a relationship of mutual dependence. Till date there have been no failures in supply from the Russian gas fields to the EU.
However, there have been situations where the transit of gas through countries like Belarus and Ukraine has been blocked as part of a conflict with Russia.
The general European security of supply evaluation of The European Network of Transmission System Operators for Gas (ENTSOG) shows that the Danish security of gas supply will remain strong in the future.
1 Security of gas supply
EU Regulation 994/2010 primarily establishes a legal framework for:
• Protection of certain customer groups.
• Definition of supply standard and crisis levels.
• Distribution of responsibilities, solidarity, planning and coordination, both concerning preventive mea- sures and reactions to actual disruptions to supplies at member state level, regional level and EU level.
• Risk assessments, preventive action plans and emer- gency plans, including exceptional measures that can be introduced when the market is no longer able to satisfy gas demand.
• Well-functioning internal market, even in situations of shortage of supply.
In the Danish Natural Gas Supply Act, primarily in section 12(1), it is stated that a TSO must:
• connect, as required:
· plants to upgrade biogas to natural gas quality · distribution grids
· consumers
• ensure the quality of the natural gas supplied from the transmission grid
• maintain security of supply in Denmark
• cooperate with other TSOs towards the efficient interchange of natural gas
• develop plans to meet future transmission capacity needs
• ensure that there are sufficient quantities of natural gas in the overall natural gas supply system to maintain the physical balance in the grid
Energinet.dk's responsibility for security of the natural gas supply is described in more detail in the Danish Executive Order on maintaining security of natural gas supply (no. 962).
To reduce the vulnerability in the European gas system and achieve greater solidarity across borders, common European ini- tiatives have been launched over a number of years. The EU regulation on measures to maintain security of gas supply par- ticularly sets the framework for cooperation. The primary con- cern of the EU regulation is to maintain a well-functioning in- ternal market in the context of gas shortages. This means that the market – at national, regional and European level – contri- butes to strengthen security of supply throughout the EU.
1.2 Energinet.dk is responsible for security of gas supply
As a TSO, Energinet.dk is responsible for maintaining security of supply in the Danish gas market. Specifically, Energinet.dk is responsible for ensuring adequate capacity in the gas trans- mission system, including gas interchange with the European market, gas from the North Sea, capacity to and from the sto- rage facilities and to the distribution systems via meter and regulator stations (M/R stations).
Availability of gas for the Danish market is a matter for the mar- ket players in normal situations and also in the three crisis le- vels. If necessary, Energinet.dk can contribute to the availability of gas in the Danish market in an Emergency by using the reser- ved volume and withdrawing gas from the storage facilities.
1.2.1 The Danish security of supply model
The gas market plays a key role in the Danish security of gas supply. Energinet.dk supports security of supply by using the Danish security of supply model.
The security of supply model is based on the framework of the EU regulation. The overall intention is to avoid situations in which the market is unable to supply gas to customers.
The model contains specific tools which Energinet.dk can use to increase the likelihood that the market will continue to sup- ply customers when there is a gas shortage.
Crisis levels
There are three crisis levels beyond normal operation: Early Warning, Alert and Emergency.
• Early Warning is declared if an incident occurs that could cause a significant deterioration of the supply situation and could potentially trigger an Alert or Emergency later.
• Alert is declared if an incident occurs that causes a significant deterioration of the supply situation, but the market is still able to manage that disruption or demand without the need to resort to nonmarket measures.
• Emergency is declared when all relevant market measures have been deployed and the gas supply is still not sufficient to meet demand. In this situation it is considered necessary to use nonmarket measures to safeguard the gas supply for protected customers.
At the Emergency crisis level, there is a distinction between protected and non-protected customers with regard to gas supplies. Only protected customers are guaranteed a gas sup- ply in an Emergency.
Protected and non-protected customers
All private customers are protected. Energinet.dk has further decided that small and medium-sized enterprises, district heat- ing installations and vital institutions such as schools and hos- pitals also have the status of protected customers (to achieve the best possible protection of gas consumers in relation to the EU regulation).
Non-protected customers are typically large enterprises which consume a lot of gas. Non-protected customers can be discon- nected in an Emergency. The disconnection depends on the parti- cular circumstances, and three days’ notice will be given to allow processes using natural gas to be shut down in an orderly way.
A 'cubic metre limit' is set and published each year by the Danish Energy Agency, and is used to decide which customers are protected. In 2016/2017 the limit is 3 million Nm3/year. In practice, this means that all industrial enterprises with an an- nual gas consumption of less than 3 million Nm3 and most gas-fired CHP plants will be protected.
To reflect the different treatment of the two customer groups during Emergency, there are two different tariffs relating to security of supply. There is one tariff for protected customers and another lower tariff for non-protected customers.
Crisis management
In Denmark, the three crisis levels could be triggered if, for example, supplies to Denmark were interrupted from the North Sea, the largest source of supply. In this situation, Danish and Swedish customers could still be supplied with gas from various sources, including the two Danish gas storage facilities and imports from Germany. This happens mainly because the prices create an incentive to the relevant players to boost deli- veries to the Danish market.
A gas crisis in another country could also trigger the three cri- sis levels in the Danish gas system. Of course, Energinet.dk's
Normal Early Warning Alert Emergency
Supplier: the market CRISIS LEVELS
The security of supply can be supplemented by Energinet with non-market based tools
The supply to the market can be supplemented by Energinet.dk
with non-market based tools Figure 1. The Danish security of supply model.
decision will take account of the wider circumstances in addi- tion to the incident itself. It is often more serious if an incident occured in winter than in summer because consumption in Denmark is highly temperature dependent.
Serious incidents rarely occur in the Danish gas system. In the last five years, there have only been two Early Warnings. They were declared immediately after each other in 2013. The situa- tion occurred before the gas system was upgraded with the compressor station in Egtved and the pipeline duplication to Germany.
It was caused by an unseasonably cold spring combined with two unforeseen technical incidents causing various problems including a 10-day interruption to the North Sea supplies.
Neither of the Early Warning situations triggered an Emergency.
1.3 Infrastructure
The Danish gas system is an integral part of the European in- frastructure. Every year, approx. 2.5 billion Nm3 of natural gas is transported to Danish customers, with an additional transit to Sweden of approx. 0.8 billion Nm3 and the wider European market via Germany.
The North Sea gas fields are connected to the gas systems of both Denmark and the Netherlands. This means the gas can be moved to the European market via the route with the lowest transport costs.
There are 19 plants upgrading biogas to natural gas quality connected to the distribution grid. One plant is connected di- rectly to the transmission grid. Around 10 plants are expected to be connected in the coming years.
Transmission grid
The total length of pipelines in the transmission grid is about 900 km. The transmission grid is connected to the distribution grids via 43 M/R stations which reduce the pressure to suit the pipeline systems of the distribution companies.
The transmission system also provides access to the two Da- nish gas storage facilities. The gas storage facilities are used by the players to smooth out seasonal fluctuations between con- sumption and demand. The storage facilities also play an im- portant role in maintaining security of supply in an Emergency.
The distribution grid
The distribution grid has a total pipeline length of about 17,000 km and is connected to more than 400,000 households and businesses. In Copenhagen, Frederiksberg and parts of Aalborg, there is also a network supplying customers with modern town gas.
As more and more biogas upgrading plants are connected, gas is increasingly being delivered directly to the distribution grid.
Some distribution grids are therefore changing role, from only receiving gas from the transmission grid, to also having local production.
The North Sea
* Station Pipeline
Connection to gas transmission systems Gas storage facility Compressor station Gas treatment plant Platform
Not owned by Energinet.dk
Figure 2. Illustration of the Danish gas infrastructure.
TRANSMIS-
SION GRID M/R-STATION DISTRIBU-
TION GRID CONSUMERS
Figure 3. Illustration of the journey from the transmission system to the consumer.
Energinet.dk took over DONG Gas Distribution on 30 Septem- ber 2016, as part of the Danish Parliament’s decision to keep the gas distribution grid under public ownership. Energinet.dk thus took over the gas distribution grid in south Jutland and in south and west Zealand. The company is independent under Energinet.dk and is now called Dansk Gas Distribution.
Terms:
Degree days : Degree days are a measure of how cold it has been. The degree days in a 24-hour period are the difference between the average daily temperature and 17°C. For example, if the average temperature over the 24 hours is 4°C, there are 13 degree days in the gi- ven day. 24-hour periods with an average temperature above 17°C do not count.
Gas year: A gas year is defined as 1 October to 30 Sep- tember.
Nm3: One Nm3 (normal cubic meter) is the amount of gas which at 0°C and an absolute pressure of 1.01325 bar takes up one cubic meter.
Normal year: A normal year is defined as and calcula- ted at 3,113 degree days.
Duration curve: Curve showing consumption every day of the year in decreasing order.
2.1 No security of supply incidents in 2015-2016
There were no Early Warning, Alert or Emergency incidents declared in 2015 or the first 11 months of 2016. The only two incidents occurred in 2013, when Early Warnings were declared in March and April.
IT Incidents
There was a single IT incident in the gas system in 2015, which meant that Control Centre Gas had to move to the emergency control room. The incident had no impacts on supply.
2.2 Gas consumption unchanged during past year
Gas consumption in Denmark did decline from 2010-2014, but remained largely unchanged from 2014-2015. Gas consumption
in Denmark in 2015 exceeded DKK 2.4 billion Nm3. 2015 was a slightly warmer year with 11 per cent fewer degree days than in a normal year.
Consumption is expected to be approx. 2.5 billion Nm3 in 2016, i.e., similar to 2015. 2016 also looks set to be a warm year. At the time of writing there had been nine per cent fewer degree days in 2016 than in a normal year.
2. The past year
EarlyWarning Alert Emergency
2013 2 0 0
2014 0 0 0
2015 0 0 0
2016 0 0 0
Table 1. Overview of security of supply incidents between 2013 and 2016 (November).
2 For 2016, only data available at the time of editing is included.
0 1 2 3 4 5
2015 2014
2013 2012
2011 2010
109% 86% 94% 93% 77% 89%
Billion Nm3/year
Figure 4. Natural gas consumption in Denmark in the period 2010-2015.
Peak day consumption
The temperature has a major impact on peak day consumption and hence on the load on the transport systems.
The peak day consumption so far in Denmark in 2016 has been 17.5 million Nm3. This happened on 21 January 2016, when the daily mean temperature was -6.6°C.
For winter 2016-2017, the peak day consumption has been esti- mated at approx. 19.2 million Nm3/day at a daily mean tempe- rature of -13°C, which is the 20-year winter design temperature according to Danish Meteorological Institute statistics.
2.3 Gas supplies from the North Sea
Most of the gas supplied to Denmark comes from the North Sea. Denmark continues to be a net exporter of gas, but some- times the flow is reversed and natural gas is imported from Germany.
The gas from the Danish fields is taken onshore via the Tyra and Syd Arne pipelines, where it is sold in the Danish exit zone or exported to Sweden and Germany. Natural gas is also ex- ported from the North Sea to the Netherlands via the NOGAT pipeline.
Supplies to Nybro in 2015 were just under 4 billion Nm3, ex- ceeding the Danish and Swedish gas consumption. There were thus net exports of gas from Denmark to Germany in 2015, as was the case in 2014.
There was major maintenance in the North Sea during the winter, which led to a reduced flow from the North Sea and increased imports from Germany at times. Maintenance in the North Sea took place from the start of December to mid- February.
Supplies from Nybro in the first nine months of 2016 have been around 2.7 billion Nm3. The forecast for supplies for the whole of 2016 is around 4 billion Nm3. In 2016, the peak supply from Nybro to date has been 13.2 million Nm3/day. This happened on 24 August 2016.
0 1 2 3 4 5 6
Export to the Netherlands Import from Germany
Export to Germany Export to Sweden Consumption in Denmark
2015 2014
2013 2012
2011 Billion Nm
0 -1 5 10 15 20
2014 2015 2013
360 300
240 180
120 60
Million Nm /day
Day
0 5 10 15 20
2014 2015 2013
360 300
240 180
120 60
Million Nm /day
Day
Figure 6. Annual net production from the Norht Sea allocated on
flow 2011-2015. .
Figure 5. Duration curves for daily consumption for the period 2013-2015.
Figure 7. Duration curves for daily production for the period 2013- 2015.
-8 -6 -4 -2 0 2 4 6
Dec.
Nov.
Oct.
Sep.
Aug.
July June May Apr.
Mar.
Feb.
Jan.
Net import from Germany 2015 Million Nm /day
2.4 Use of the transmission grid
Import fra Tyskland
Following the expansions in Germany, it has since 1 January 2016 been possible to import 10.8 million Nm3/day from Ger- many.
The direction of flow between Germany and Denmark has pri- marily been northward across the border point during winter
2015/2016 due to maintenance in the North Sea. Once the maintenance ended, the flow across the border turned and has been primarily southward since March 2016.
Capacity utilisation
I None of the peak day volumes came close to the capacity limits in the transmission system entry and exit points or sto- ragewithdrawal capacity in 2015.
Figure 8. Net imports at the Danish-German border point in 2015.
Point Capacity
Million Nm3/day Max flow 2013
Million Nm3/day Max flow 2014
Million Nm3/day Max flow 2015 Million Nm3/day
Nybro Entry 32,42 14,1 16,2 14,6
Lille Torup Gaslager Withdrawal 8,03 6,0 4,5 7,3
Stenlille Gaslager Withdrawal 8,23 9,3 7,8 7,8
The Danish Exit zone Exit 25,5 19,5 16,9 15,6
Ellund Entry/Exit 10,84/ 20,0 5,1/2,1 4,6/6,0 4,2/7,0
Dragør Border Exit 8,6 1 7,4 6,1 6,2
1 The Swedish system is not designed to receive these volumes at the assumed minimum pressure at Dragør of 45 bar. The uninterruptable capacity is stated to be 7.2 million Nm3/day.
2 Total capacity of the receiving terminals at Nybro. The potential supplies are today smaller, as the Tyra-Nybro pipeline is subject to a capacity constraint of
about 26 million Nm3/day, and large volumes cannot be supplied from the Syd Arne pipeline.
3 Guaranteeed capacity.
4 At a calorific value of 11.2 kWh/Nm3.
Table 2. Capacities at the transmission system entry and exit points compared to actual peak day volumes. The capacity at the Ellund entry point in 2012-2013 was 4.8 million Nm3/day. The capacity at the Stenlille gas storage facility in 2012-2013 was 9.7 million Nm3/day.
Capacity at the Danish-German border
It has been possible in 2016 to import 450,000 Nm3/hour from Germany to the Danish transmission system, equivalent to 10.8 million Nm3/day. In comparison, it is possible to export 823,000 Nm3/hour from the Danish transmission system to Germany.
2.5 More and more biogas plants
Nineteen upgrading plants have been connected to the gas grid since 2011. One plant is connected directly to the transmis- sion grid at Bevtoft. The plants have a total capacity of over 100 million Nm3/year. The injection of upgraded biogas into the gas system has been constantly increasing, with biogas accounting for 2.5 per cent of gas consumption in the first half-year of 2016.
Energinet.dk is aware of around 10 projects involving biogas upgrading which may be realised and connected to the Danish distribution or transmission grid within the next few years.
Bio natural gas has similar combustion characteristics to natu- ral gas but can contain residual oxygen from desulphurisation.
This oxygen level led to some challenges during summer 2016.
This was because the specifications for oxygen levels in the Danish gas system differ from the oxygen content in the German system. As a result, Energinet.dk had to limit flow ca- pacity to Germany for approx. 3 months in July 2016. The re- striction was lifted when Energinet.dk and Gasunie Deutsch- land, the natural gas TSO in Germany, agreed on a procedure for handling the situation.
2.6 Use of gas storage facilities
The two gas storage facilities, Lille Torup and Stenlille, have a total capacity of over 1 billion Nm3. This corresponds to over one-third of the Danish annual consumption.
Gas consumption varies with the seasons and over each 24- hour period. The use of the gas storage facilities in 2015 was very similar to previous years.
Market players use the two Danish storage facilities at Lille Torup and Stenlille to store gas between seasons and to supply the necessary daily capacity. During the summer, when gas consumption is low, gas is injected into the gas storage facili- ties. In winter, when supplies from the North Sea can no longer cover Danish consumption or exports to Sweden and Germany, gas is withdrawn from the storage facilities again.
If supplies from the North Sea or Germany are disrupted, the two gas storage facilities can provide emergency gas supplies.
2.7 Satisfactory gas quality
Energinet.dk is responsible at all times for ensuring that the gas supplied from the transmission system complies with the Rules for Gas Transport and the Gas Regulation, even though the gas comes from different sources. The gas transported in Energinet.dk's transmission system is supplied from:
• The Danish North Sea gas fields via the Nybro treatment plant.
Existing upgrading plants
Possible upgrading plants
Figure 9. Green plants are existing upgrading plants connected to the gas network. Red plants indicate upgrading plants, which may be realised within the next couple of years.
• The German market via Ellund.
• The Lille Torup and Stenlille gas storage facilities.
• Injected bio natural gas.
Under normal supply conditions, it is a requirement that the up- per Wobbe index for natural gas is in the range 14.1-15.5 kWh/
Nm3 (50.76-55.8 MJ/Nm3). The relative density of natural gas quality must not be below 0.555 or above 0.7.
The transported gas complied with the quality requirements in 2015.
2.8 Plentiful gas on the market in 2016
In winter 2015/2016 there was plenty of gas in the Danish mar- ket. Gas consumption in Denmark and Sweden was also low due to relatively high temperatures.
The flow has been supplemented with imports from Germany during the winter due to maintenance in the North Sea. Plen- tiful gas supplies from the North Sea and a wider price spread between Denmark and Germany meant that the flow turned to exports across the German border once the maintenance ended. Denmark has been a low-price area compared to Germany since March.
The European and Danish gas markets were well supplied during the winter. There were stable supplies to the market and the tem- perature was generally above normal levels. The oil price has also been extraordinarily low, helping to keep the gas price down.
There was also an expectation in the market of greater liquid gas (LNG) deliveries to Europe in summer 2016, adding further downward pressure to prices.
Trade on gas exchange continues to increase
Gaspoint Nordic has set a new record for trading volumes for the sixth year running. During the first nine months of the year, the gas traded on Gaspoint Nordic was equivalent on ave-
EUR/MWh Million kWh/h
-4 -3 -2 -1 0 1 2 3
Net imports from Germany (right axis)
Price spread between ETF and GASPOOL (left axis) -2,0
-1,5 -1,0 -0,5 0,0 0,5 1,0 1,5
Aug.
July June May Apr.
2016 Mar.
Feb.
Jan.
Dec.
Nov.
2015 Oct.
Figure 11. Flow across the border point Ellund compared to the price spread between Denmark and Germany.
0 100 200
Stenlille withdrawal Ll. Torup withdrawal -300
-200 -100
Stenlille injection Ll. Torup injection Nov.
Sep.
Jul.
May Mar.
Jan.
Million Nm
2015
Figure 10. Monthly distribution of withdrawals from and injections into the storage facilities in 2015.
15,6 15,2 14,8 14,4
14,02010 2011 2012 2013 2014 2015 2016
Wobbe index (kWh/Nm )
Wobbe index measured in Ellund Wobbe index measured in Dragør Upper and lower limit on the Wobbe index
Figure 12. Changes in gas quality in the period 2010-2015. The figure shows the vari- ation in the Danish gas system brought about by imports from Germany via Ellund. The lower limit is indicated without considering the parti- cular supply from Ellund as mentioned in the Gas Regulation.
rage to a turnover of about 97 per cent of Danish consumption.
This is a significant increase throughout 2014 and 2015, where the percentages for the first nine months were 20 and 60 per cent, respectively.
Day-ahead trade still accounts for the great majority of the total trade on Gaspoint Nordic. Gaspoint Nordic introduced two different market makers for their within day-product in the first half of 2016 to boost trading in this product.
Trading volumes declined again on the bilateral market (Gas Transfer Facility – GTF). At present, gas corresponding to a
turnover of about 30 per cent of Danish consumption is being traded on the GTF. The bilateral trades are being largely re- placed by trades on Gaspoint Nordic.
2.8.1 Future changes to the gas market
Changes in the balance model
Energinet.dk introduced a new balancing system in 2014 which uses within day-trading to balance market imbalances. The new balancing system has had a limited effect on the liquidity of within day-trading. Energinet.dk has therefore introduced changes to the balance model based on a joint evaluation with market players.
The evaluation showed that the liquidity of the within day- market, when the system is out of balance, can be further im- proved by Energinet.dk spreading its trades more arbitrary throughout the day. Previously, market participants knew exactly when Energinet.dk would enter the market. This meant that liquidity was high within Energinet.dk's trading windows but limited at other times.
The balance model has therefore been adjusted such that Energinet.dk can enter the market every hour during normal office hours (instead of during predefined trading windows).
Market participants therefore do not know if Energinet.dk is trading or when. In the future, liquidity is therefore expected to be more evenly distributed across the day, whereby the market gains a further advantage of fast access to gas purchases and sales at the 'right price'.
Gaspoint Nordic is 100 per cent owned by Powernext
Gaspoint Nordic is the Nordic gas exchange. Energinet.
dk decided in July 2016 to sell its shares in Gaspoint Nordic to the French Powernext, which is a part of EEX Group. The sale ensures better access to the European gas market and greater product diversity for Danish players.
Following the sale, Gaspoint Nordic is 100 per cent owned by EEX Group. This means that Gaspoint Nordic is visible and more accessible to far more European gas traders. This may further increase trade on Gaspoint Nordic.
The adjusted balance model also involves changes to imbalan- ce payments, to give the market greater incentive to balance in situations where Energinet.dk has not been in the market.
The changes were made prior to 1 October 2016.
Common balance zone for Denmark and Sweden
Energinet.dk is working with Swedish TSO, Swedegas, to ana- lyse the potential of establishing a single common balance zone for the Danish and Swedish gas market.
The analysis has to answer whether a common balance zone would be an advantage for the two gas markets and the TSOs.
The analysis will provide the basis for assessing whether one common balance zone should be implemented. We expect the analysis to be completed at the beginning of 2017.
Figure 13. Share of Danish gas consumption traded on Gaspoint Nordic - comparison of the years 2015-2016 (September).
0 50 100 150 200
2015 2016
Dec.
Nov.
Oct.
Sep.
Aug.
Jul.
Jun.
May Apr.
Mar.
Feb.
Jan.
%
To assess the supply situation in the coming winter, a reliability evaluation of the gas system is carried out. This evaluation looks at whether the system capacities are able to ensure sup-
plies to consumers during each 24-hour period during winter 2017-2018. The assessment shows there is plenty of capacity in the gas system to supply demand on a very cold day.
3 The coming winter
Winter Outlook 2017-2018
The Winter Outlook assessment is used to evaluate the capacity in the gas system based on a winter's day with a temperature of -13°C. The assessment for the coming gas year is:
• Total transport: Total net transport has been esti- mated at 25.9 million Nm3/day.
• Exit DK: Consumption in Denmark is 19.2 million Nm3/day. For the exit zone, the demand corresponds to Energinet.dk's expectations at a daily mean tem- perature of -13°C.
• Ellund: Ellund has net imports of 0 million Nm3/day.
• Dragør: Dragør has exports of 6.7 million Nm3/day corresponding to 280,000 Nm3/hour.
• Storage facilities: Total withdrawal of gas from the storage facilities is estimated at 16.2 million Nm3/day, with 8.2 million Nm3/day coming from Stenlille and 8.0 million Nm3/day from Lille Torup. The distribution of withdrawals is optimised to achieve the highest possible network pressure.
• Nybro: Supplies at Nybro are estimated at 9.7 mil- lion Nm3/day
GAS STORAGES 16,2 million Nm3/day
STENLILLE 8,2 million Nm3/day
DRAGØR 6,7 million Nm3/day NYBRO
9,7 million Nm3/day
ELLUND 0 million Nm3/day LL. TORUP
8 million Nm3/day
EXIT ZONE DENMARK:
19,2 million Nm3/day Gas treatment plant Connection to gas trans- mission systems Gas transmission line Border station Denmark - Germany Gas storages Flow direction Entry/Exit point
Figure 14. Winter Outlook 2017-2018.
3.1 Capacity orders 2016-2017
Shippers must book capacity in the grid from Energinet.dk when they want to transport gas in the transmission grid.
Capacity can be booked as annual, quarterly, monthly, daily or withinday products and is offered at the following points:
•Nybro, which is connected to the offshore pipes from the North Sea.
• Ellund, which is connected to the German transmission system.
• Dragør, which is connected to the Swedish transmission system.
• BNG entry, which is biogas upgraded to natural gas quality.
This capacity is used to receive gas anywhere in Denmark.
• The exit zone, which is used to deliver gas anywhere in Denmark.
Altered pattern in capacity orders
In the past, long-term capacity products have been a key part of gas shippers' capacity orders for the coming gas year. In re- cent years, short-term products have become a more impor- tant part of the shippers' optimisation. Shippers prefer short- term products, which are more flexible and support tempe- rature dependent consumption.
All capacity products are showing a strong decline in sold an- nual capacity for 2016/2017 compared to gas year 2015/2016.
This makes it difficult to predict future capacity orders based on the annual booking.
Energinet.dk has also changed the price structure so that short- term products are cheaper relative to the annual product.
Annual capacity for gas year 2016/2017:
• Ellund southbound direction:
No annual capacity has been sold in gas year 2016/2017. Last year, sales of annual capacity in the southbound direction rose from 1.1 million kWh/h to 1.4 million kWh/h.
• Status towards Sweden:
Sales of annual capacity at Dragør exit have declined signifi cantly. About 1.1 million kWh/h was sold this year, compared to 2.4 million kWh/h last year.
• Status for Nybro:
Sales have fallen from 4 million kWh/h to 3.1 million in the new gas year. Nybro continues to be one of the points where the most annual capacity is sold.
• Exit zone:
Last year, annual bookings in the exit zone were about 6.3 million kWh/h, versus about 6.7 million kWh/h the previous year.
• BNG entry (bio natural gas):
Annual bookings last gas year were about 84,000 kWh/h for BNG entry.
Annual capacity can be ordered all year round for the exit zone and BNG entry. It is therefore not yet known for gas year 2016/2017. These orders are also expected to be decreasing.
3.2 Distribution and dimensioning
Supplies to the individual M/R stations in the transmission system and to individual consumers must be maintained both in normal situations and in crisis situations with very low daily mean temperatures. This is ensured by analysing the systems and assessing natural gas demand from each M/R station. The assessments are made jointly by the distribution companies and Energinet.dk.
The analyses include the three largest distribution companies, NGF Nature Energy Distribution A/S, Dansk Gas Distribution A/S and HMN GasNet P/S.
3.2.1 NGF Nature Energy Distribution A/S
The M/R stations supplying NGF Nature Energy Distribution are deemed to have sufficient capacity to cover the supply requirement for winter 2016-2017 (Appendix 1).
NGF Nature Energy Distribution's expected capacity require- ments were calculated based on empirical data and customers' capacities. NGF Nature Energy Distribution then adjusted the numbers taking into account the simultaneity of various types of consumption.
Work is actively being done with the pressure in the distributi- on lines to create flexibility for biogas production. The pressure will be changed in the distribution lines from 18 bar in the win- ter period to 13 bar in the summer period.
3.2.2 Dansk Gas Distribution A/S
The M/R stations and distribution system in Dansk Gas Distri- bution's area are deemed to have sufficient capacity to cover the supply requirement for winter 2016-2017 (Appendix 2).
Dansk Gas Distribution's expected capacity requirements have been calculated based on existing and new capacities in the underlying distribution grid. Regular analyses of gas consump- tion are performed, such as consumer transition from gas to district heating. A small increase in consumption was observed from the M/R station in Egtved over the past year.
In 2016, the distribution grid received biogas upgraded to natu- ral gas quality from one additional upgrading facility. A total of four biogas plants are connected. Agreements have been con- cluded to receive over 5,500 Nm3/hour bio natural gas in the area.
3.2.3 HMN GasNet P/S
M/The M/R stations and distribution systems in HMN GasNet's distribution area are deemed to have sufficient capacity during winter 2016/2017 (Appendix 3).
HMN GasNet has received biogas upgraded to natural gas quality since 2014. As of 1 September 2016, agreements have been concluded with a total of 11 biogas producers to supply 71 million Nm3/year. This corresponds to approx. 9,000 Nm3/ hour.
Figure 15. Illustration of gas quality for different types of gas. Biogas must be upgraded to natural gas quality before it can be injected into the natu- ral gas grid.
Relative density (-)
Wobbe index (kWh/Nm ) 1,0
0,8 0,6 0,4 0,2
0 7 8 9 10 11 12 13 14 15 16
Danish North Sea gas Expected from Germany Russian gas
Upgraded biogas (98% methane) Raw biogas (65% methane)
Requirement in the gas regulations
Hydrogen
Gas regulations special supply
More facilities are expected to be connected during the 2017- 2018 period, bringing the total annual capacity for biogas up- graded to natural gas quality to around 126 million Nm3, corre- sponding to around 15,000 Nm3/hour.
3.3 Gas quality during the coming winter
Energinet.dk expects gas quality in the coming winter to be based on a combination of Danish North Sea gas, bio natural gas and gas from Germany imported via Ellund.
In the coming winter, Energinet.dk expects gas quality to vary as follows:
• The Wobbe index for the Danish North Sea gas is expected to vary from 14.7 kWh/Nm3 to 15.5 kWh/Nm3.
• Gas imported from Germany is expected to have a lower Wobbe index than that of Danish North Sea gas.
• Energinet.dk estimates that the average Wobbe index of gas from Germany will be 14.7 kWh/Nm3, varying from 13.9 kWh/Nm3 to 15.5 kWh/Nm3.
• Bio natural gas injected into the gas system is expected to have a lower Wobbe index than that of Danish North Sea gas.
Bio natural gas has similar combustion characteristics to natu- ral gas and normally consists of a mixture of methane and CO2.
Bio natural gas typically has a Wobbe index at the lower end of the variation range permitted in the Gas Regulation.
In future, new types of RE gases, such as hydrogen, may be in- troduced into the Danish gas system. In the coming years, Ener- ginet.dk will investigate how ready the gas system is for the gas quality which characterises new RE gases.
The future trend for the supply situation is analysed to assess which changes might affect security of supply in the longer term. The analysis helps to identify whether further initiatives should be implemented. The main focus is on changes in de- mand and supply on the Danish and Swedish markets, but chan- ges in storage and infrastructure capacity are also important.
4.1 Consumption trend in Denmark
The total natural gas, biogas and bio natural gas consumption in Denmark, excluding field consumption in the North Sea, is expected to decrease to around 2.3 billion Nm3/year in 2030.
Natural gas consumption in Denmark is expected to decrease to approximately 1.8 billion Nm3/year in 2030. Consumption of biogas and bio natural gas is expected to increase from the current level of about 0.2 billion Nm3/year to about 0.5 billion Nm3/year in 2030.
Changes in consumer segments
Low gas prices are expected to maintain a constant level of consumption in the short term, but in the longer term the transition to renewable energy in the electricity and district heating sector is expected to lead to declining natural gas con- sumption.
Consumption by individual heating systems is expected to weakly decline up until 2030, due to energy savings and con- version to other forms of heating.
Gas consumption by businesses is expected to remain virtually unchanged. The use of gas in industry is sensitive to market
conditions, and may be reduced due to conversions or changes to the number of manufacturing companies.
There is much greater uncertainty surrounding the trend in the transport sector. Up until 2030, a rise corresponding to total consumption for transportation of less than 100 million Nm3/ year is expected. The growth will primarily be driven by heavy transport.
4.1.1 Sensitivities in gas consumption
Any assessment of future gas consumption is fraught with uncertainty, especially concerning gas consumption for CHP, transport and the process industry.
The possible outcomes for gas consumption has been assessed based on four scenarios, describing a number of alternative developments for the entire energy system and especially gas for CHP, transport and heating3 .
The following trends potentially point to a lower gas consump- tion than the projections suggest:
• A large number of gasfired CHP plants are changing their operating patterns or closing down.
• The transition to renewable energy in the process industry.
• Faster reduction in natural gas consumption for heating.
• Low consumption in the transport sector.
4. The future development
3 Energy scenarios for 2030, Energinet.dk (2016).
Conversely, these trends may pull in the direction of higher gas consumption:
• Slower reduction in gas consumption for domestic heating.
• Faster rollout for gas in the transport sector.
• Improved conditions for gasfired CHP, such as higher CO2 and electricity prices.
The assessment is that gas consumption in 2030 could vary by -0.5 to +0.6 billion Nm3/year compared to the central estimate.
This means that the range of possible outcomes is over 1 billion Nm3/year.
4.2 Consumption trend in Sweden
Sweden currently receives natural gas exclusively from Denmark.
Denmark is expected to remain Sweden's only source of supply.
Gas consumption in Sweden was approx. 0.8 billion Nm3 in 2015. From 2016-2025, consumption is expected to be approx.
0.9 billion Nm3/year.
After 2025, Energinet.dk expects natural gas consumption in Sweden to decline gradually corresponding to the Danish con- sumption. Much of Sweden's gas consumption is for CHP gene- ration. Swedish consumption therefore varies greatly depen- ding on the temperature. For example, 2010 was a cold year with total Swedish gas consumption of 1.6 billion Nm3. Future natural gas consumption is dependent on several uncer-
tain project plans which may affect consumption, such as bio- gas and LNG.
4.3 Gas supplies to Denmark impacted by Tyra
The primary sources supplying the Danish gas market are the North Sea and Germany. Biogas production in Denmark is also expected to increase.
4.3.1 Natural gas supplies
The Danish Energy Agency's most recent projection of North Sea production from August 2016 shows an increase in produc- tion during 2021-2025. This assumes that Tyra will be renovated during 2019-2021 and continue to be in service after 2021. A fall in gas production in 2019-2021 is therefore expected compared to last year's estimate.
Both oil and gas resource estimates have been generally increa- sed, due to changes in risk assessments and several expected expansions. The expected reserve estimates have also been sig- nificantly increased, while the contribution from technological resources and the prospective resources have also been reduced.
The future supply situation which Energinet.dk has used as out- set is the Danish Energy Agency's production forecast from 2015, as Tyra's future has yet to be determined. Special consideration has been given to the supply situation during the renovation of Tyra.
Figure 16. Expected development in overall gas consumption 2016- 2030 with indication of projection uncertainty from Energinet.dk's 2030 scenarios. Natural gas and green gasses. Based on Energi- net.dk's analysis assumptions 2016.
2016 4 3 2 1 0
2018 2020 2022 2024 2026 2028 2030 Billion Nm
Households Industry Transportation Power and heat Uncertainty
Natural gas supplies to Denmark are determined by the propor- tion of North Sea production that is sent to the Netherlands and Germany (via Denmark). For the total supply to the Danish and Swedish markets, it is assumed that the Danish Hejre gas field commences operation no earlier than 2021. Postponement would not have any significant effect on the assessment of the Danish supply situation if Tyra continues to be in operation.
The assessment assumes that all gas from the North Sea is supplied to Denmark and not the Netherlands. There is capaci- ty in the Nogat gas connection between the Danish gas fields and the Netherlands, and 4-5 billion Nm3/year can be supplied to the Netherlands. Higher exports to the Netherlands mean lower supplies to Denmark at Nybro, which in turn means lo- wer commercial exports to Germany.
The expected reserve estimates have been increased in the Danish Energy Agency's projection from 2016, and this can either mean more gas to Germany via Denmark or gas to the Nether- lands, but this will be decided by the commercial players.
Bio natural gas production
The contribution of biogas to the security of supply is currently minimal at 2.5 per cent of consumption in the first half of 2016.
In the longer term this contribution will increase. The produc- tion of biogas will correspond to 5 per cent of Danish gas con- sumption in 2018, if the Danish Energy Agency's forecast for new plant is realised. The Danish Energy Agency expects that the growth in biogas in Denmark up to 2020 will mainly be in the form of plants upgrading biogas.
4.4 Gas supply situation
In the longer term, the Danish supply situation depends largely on whether the Tyra field continues to be able to deliver gas to the Danish gas market. The future supply situation has there- fore been assessed for the following scenarios, based on Ener- ginet.dk's analysis assumptions for 2016:
• The supply situation with Tyra in operation for the entire period.
• The supply situation with Tyra out of operation in 2018-2021.
Energinet.dk is continuously monitoring the supply situation, and ensures that new information on developments is passed on to market players. Examples of the factors monitored inclu- de the Ukrainian crisis and reductions in North Sea supplies.
Energinet.dk thus provides the market players with a common information basis, which allows them to take the necessary precautions to avoid critical supply situations.
4.4.1 Supply situation with Tyra in operation the entire period
The Danish Energy Agency's forecast for gas production from the Danish North Sea gas fields in 2015 and Energinet.dk's forecast (analysis assumptions June 2016) for gas consumption in Denmark and Sweden form the basis for assessing the sup- ply situation in 2017-2040.
The main conclusion of the analysis is that the Danish gas market will be well supplied in the coming period with Tyra in operation.
Figure 17. Left: Gas supplies from the North Sea 2017-2042. Source: Energinet 2016 and the Danish Energy Agency 2015.
Right: Gas supplies from the North Sea 2017-2042. Source: the Danish Energy Agency 2016.
0 1 2 3 4 5
RE gas Trym Prospective resources
Technological resources Expected reserves
2041 2037
2033 2029
2025 2021
2017 Billion Nm
0 1 2 3 4 5
Prospective resources Technological resources
Expected reserves
2041 2037
2033 2029
2025 2021
2017 Billion Nm
4.4.2 Supply situation without Tyra in operation from 2018-2021
It will still be possible to maintain supplies to Danish and Swe- dish gas customers if the Danish Underground Consortium (DUC) decides to close down the Tyra platform in the North Sea from 2018-2021.
This has been shown in an analysis from Energinet.dk in au- tumn 2016 . The analysis was carried out on the basis of the press release from Maersk Oil on behalf of DUC on 4 April 20164. The analysis describes a supply situation where Tyra is assu- med to be out of operation from 2018-2021, but where produc- tion is resumed in 2021.
The main conclusion of the analysis is that the Danish gas sy- stem will become more vulnerable if DUC decides to shut down the Tyra platform, which accounts for over 90 per cent of Danish natural gas production.
However, the Danish gas system is well developed, and thanks to good connections to Germany and gas storage facilities, it will be possible to maintain supplies to Danish and Swedish customers. Only in case of an extremely hard and long winter, supply problems may arise. However, market prices are ex- pected to be influenced by the absence of supplies from the Tyra platform, leading to more price peaks, as has been seen earlier in strained supply situations.
The analysis is Energinet.dk's best estimate of how the supply situation may look. It is an estimate with uncertainties, which is why Energinet.dk is in continuous dialogue with stakeholders about developments in relation to the Tyra platform.
Energinet.dk will regularly provide information on timing, con- sequences and initiatives in relation to the possible shutdown.
0 1 2 3 4 5
Export the Netherlands Export Germany Export Sweden Denmark incl. BNG-exit
2038 2035 2032 2029 2026 2023 2020 2017
The North Sea, incl. Trym The North Sea and import Germany
The North Sea and import Germany incl. upgraded biogas Billion Nm
-1,0 -0,5 0,0 0,5 1,0
Exit Ellund Net flow Ellund Entry Ellund 2021 2020
2019 2018
2017 Billion Nm
Figure 18. Supply situation 2017-2040 with Tyra in operation.
Figure 19. Net imports from Germany 2017-2021 with Tyra in operation.
Billion Nm3 2017 2018 2019 2020 2021
Export
Netherlands 0,2 0,1 0 0 0
Export Germany 0,76 0,53 0,81 0,73 0,54
Export Sweden 0,9 0,9 0,9 0,9 0,9
Denmark incl. BNG
(Exit DK) 2,62 2,63 2,56 2,45 2,44
Import Germany 0,76 0,76 0,76 0,76 0,76 North Sea
production incl.
Trym 3,65 3,31 3,38 3,18 2,96
Denmark BNG
production 0,07 0,09 0,13 0,15 0,15
Table 3. Supply situation in the period 2017-2021 with Tyra in operation.
4 Supply and demand 2018-2021 without Tyra.
4.5 Gas storage capacity
The Danish gas storage facilities are an essential and integral part of the Danish gas system, in relation to the market, capa- city, security of gas supply and daily operation.
Most of the storage facility volume of around 1 billion Nm3 is used by commercial users. This corresponds to around one third of the total Danish and Swedish annual gas consumption.
In 2016, Energinet.dk estimates that the storage requirements of commercial users for seasonal adjustments will be 400-600 million Nm3.
The interconnection to Germany can help to balance the Da- nish gas market. But it is still necessary to also use the Danish storage facilities for balancing, not just in crisis situations, but also in normal situations.
Energinet.dk expects demand for withdrawal capacity in nor- mal situations to vary between 10 million Nm3/day and the current capacity of around 16 million Nm3/day.
Energinet.dk purchases gas for storage so it can supplement supplies to protected customers in Emergency situations. Ener- ginet.dk's purchases of gas for storage will be reduced in 2017 due to increased capacity from Germany.
Storage requirements in the medium and long term
A number of factors may change storage needs in the medium (2018-2020) and long term (2020-2050).
Storage requirements will primarily depend on whether the Tyra field is in operation. Storage requirements will be extra- ordinarily large during the period Tyra is to be renovated.
After 2021, storage requirements will continue to depend on whether the Tyra field is in operation. The specific storage re- quirements will be assessed when DUC releases more informa- tion about Tyra's future.
Storage requirements will also be impacted by a connection between Denmark and Poland, and a connection to the Nor- wegian gas fields.
Storage requirements may also be influenced by:
• Changes in gas consumption in Denmark and Sweden.
• Meeting the obligation to maintain security of gas supply.
• Storage supply and demand from other markets such as the German market.
• Production of biogas and other RE gases.
4.6 Infrastructure after 2016
Energinet.dk's investments in import capacity from Germany have improved the long-term Danish security of gas supply in recent years. But in the longer term it may be necessary to establish new infrastructure, expand storage facilities or ensu- re rapid disconnection of customers to maintain security of supply. Future initiatives will depend on whether Tyra is reno- vated or shut down permanently.
Figure 20. Supply situation 2017-2040 but with Tyra not in operation 2018-2021. The figure is comparable to figure 18, which shows Tyra in opera- tion.
0 1 2 3 4 5
Export the Netherlands Export Germany Export Sweden Denmark incl. BNG-exit
2037 2033
2029 2025
2021 2017
The North Sea, incl. Trym The North Sea and import Germany
The North Sea and import Germany incl. upgraded biogas Billion Nm
Baltic Pipe
Energinet.dk is carrying out a feasibility study jointly with the Polish TSO, GAZ-SYSTEM, on establishing a connection between the Danish and the Polish gas systems – the Baltic Pipe project.
The conclusions of the feasibility study are expected to be avai- lable at the end of 2016.
Both TSOs view the Baltic Pipe project within a larger perspecti- ve, and it includes investigating a possible offshore connection from the Norwegian offshore gas system to Denmark and pos- sible expansion of the Danish gas infrastructure.
The study aims to show the economic and technical options for implementing the project, such that the plants are in ser- vice by 2022 at the latest. The studies include contributions from Gassco, the Norwegian system operator for the up- stream system.
Establishing Baltic Pipe could lead to significant economic bene- fits for Denmark. Baltic Pipe and a Norwegian connection could together reduce the average transport costs by increasing the volumes transported through the Danish transmission system.
The Norwegian connection would also contribute to impro- ved market functioning and help maintain security of gas supply in Denmark as Danish gas production in the North Sea declines.
The Baltic Pipe project has gained PCI (Projects of Common Interest) status and thus has common European interest. Baltic
Pipe will help diversify the European gas supply, integrate Euro- pean markets and harmonise prices – primarily in Poland and Denmark, but also in Central and Eastern Europe (CEE) and the Baltic region.
The European Commission funds initiatives for diversification of the gas supply to Northern Europe and the Baltics. The EU is therefore favourable towards looking into a Norway-Denmark and a Denmark-Poland connection.
The feasibility study will also involve Polish and Norwegian players in order to prepare the ground for joint agreements on design, routing, investment forecasts and business models for the link – if the studies show that the project is a good idea economically.
Biogas plants and grid expansion
The first biogas plant was connected directly to the Danish transmission grid in July 2016. The plant is connected at Bevtoft in Southern Jutland. Most biogas plants are connected to the distribution grid.
As more biogas plants are connected to the distribution grid, there are more cases where biogas production exceeds local consumption. There is therefore a need to be able to return biogas from the distribution grid to the transmission grid so it can be used in a larger area.
This leads to the need for a number of minor improvements to the gas transmission system. Specifically, it is expected that
Figure 21. Illustration of possible expansions of infrastructure in the Baltic Pipe project.
Figure 22. Asset Integrity Management System (AIMS).
AIMS
Preventive maintenance
Internal inspections
External inspections
Cathodic protection
there is a need to return gas at three M/R stations:
• Aalborg M/R (2017)
• A M/R station in mid-Funen
• Store Andst M/R
The total costs are expected to be up to DKK 100 million. Each project will be implemented in a cost-efficient manner in close cooperation with the distribution companies.
Condition of the transmission grid
The gas infrastructure is covered by a comprehensive Asset Integrity Management System (AIMS) to ensure that the gas transmission system is operated in a secure and cost-efficient way. Many service operations in gas facilities are mandated by law and are carried out in accordance with the law.
In 2015, extensive status reports were prepared for the onshore pipeline and M/R stations.
In general, these are in good condition, the gas system is fully operational and technology is being regularly upgraded.
Energinet.dk is ISO 9001 certified in relation to gas, and was cer- tified under the ISO 55001 Asset Management system in 2016.
Asset management has three focus areas:
• Risk-based approach: We are dependent on our assets and outages can have serious consequences.
• Efficiency: Focus on making things more efficient and con- stantly improving what we do.
• Methodology: Supporting effective procedures and transpa- rency, and reducing the risk of outages.
Overall, this approach is expected to improve planning of initi- atives and investment, rationalise maintenance costs, and ulti- mately improve security of supply by always having the right measures in place.
4.7 Assessments for the European gas system
Every two years, ENTSOG publishes a TYNDP plan (Ten Year Network Development Plan). The relevant rules are set out in the TEN-E Regulation.
TYNDP 2015 was published in March 2015. Work is currently underway on the next TYNDP. TYNDP 2017 will be published at the end of 2016, followed by a hearing phase.
The plan provides an overview of the long-term challenges for the European gas system up until 2035. Work on the TYNDP involves analysing security of supply and changes in the Euro- pean gas market.
Demand in Europe
European consumption of natural gas has been decreasing until 2014, with a weak rise in 2015. TYNDP 2017 shows a de- cline in European gas consumption in three of the four future scenarios.
Figure 23. Development in European gas consumption in the period 2010-2015 and future European consumption of natural gas in 4 scenarios. Source: ENTSOG.
4.000 4.500 5.000 5.500 6.000
Slow Progression
Blue Transition Green Evolution
Green Revolution 2035 2030
2025 2020
TWh
Historical gas consumption 2015
2010
