1. Gas Storage in Northwest Europe
Workshop GIE & DG ENER, Brussels
15th July 2015
Michael Kohl, Managing Director,
RWE Gasspeicher GmbH
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2. Gas Storage demand drivers
negative impact
gas less favourable as a generation fuel
declining demand for heating gas
daily balancing regime
availability of other flexibility sources, such as:
gas hubs
pipeline flexibility
LNG
positive impact
higher Min-take obligations in Russian LTC lead to reduction of flexibility supply?
production cut Groningen field again under review
increasing security of supply (SoS) requirements?
higher s/w spreads due to more LNG supply in Europe in the summer?
less gas supply from Russia to fulfil requirements of new contracts with China?
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3. Storage closures in Northwest Europe
2010
2011
2012
2013
2014
2015
2016
Published storage closures
Total installed capacity (WGV) 60 bcm => ,82 %
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4. Storages to stay in business?
Source: RWE Gasspeicher, public storage data 4
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5. Challenges for L-Gas – The Netherlands Where are we coming from?
What has been changed?
Supply of end customers, power plants and industrial customers with Groningen gas (G- Gas) in NL
Export of G-Gas to Germany (L-Gas Supply), Belgium and France
Export of flexibility out of the gas production to Germany
Growing number of tremors around the Groningen field
Structuring of the production by gas storages already implemented
Production cuts:
2014 cut from 49 to 42,5 bcm
2015 cut form 39,4 to 30 bcm
in 02/15 16,5 bcm for first half of 2015
In 06/15 13,5 bcm for second half of 2015
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6. Challenges for L-Gas - Germany
L-Gas flexibility demand is covered by Dutch imports and declining German production
Change from L- to H-Gas: Germany: Starts in 2015 and is scheduled until 2030
German network development plan does not differentiate between market areas NCG and Gaspool yet
Few L-Gas storages in NCG
30 bcm, including flexibility, to be replaced by H-gas till 2030
Source: NEP 2015, page 95
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7. Potential security of supply support measures
Reduced grid tariffs for gas storages
Increased penalties for imbalances
Reduction of electricity costs in Germany (Exemption from renewable support fee)
Optimised use of existing infrastructure including storages
Allocation of storage capacities to transmission grid operators
Obligatory minimum storage booking level
Obligatory minimum filling level to ensure withdrawal capacity availability
Strategic gas storage capacities
Capacity market payments
focussing on the market value of gas storages
focussing on the system value of gas storages
focussing on the insurance value of gas storages
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8. Thank you for your attention, we are ready to discuss further issues!
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