Download presentation
Presentation is loading. Please wait.
Published byColeen Farmer Modified over 9 years ago
1
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Security of European Gas Supply What are the important issues for the future? Sylvie Cornot-Gandolphe Principal Gas Expert International Energy Agency GTE 2 nd Annual Conference, 23-24 September 2004
2
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Outline 1. European Gas Supply/Demand at a Turning Point Growing use of gas in the electricity mix Growing imports Imported gas-to-power 2.Major Security of Gas Supply Issues Growing import dependency/Access to resources Transit/facility concentration Substantial gas investment Investment drivers in open markets Market fragmentation 3. Conclusion
3
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY European gas supply and demand at a turning point
4
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Gas Demand in OECD Europe Source: World Energy Outlook 2002
5
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY OECD European Gas Balance bcm Source: World Energy Outlook 2002
6
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Imported Gas for Power OECD Europe Source: World Energy Outlook 2002
7
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Drivers/Challenges for gas to power Drivers for gas to power Economic growth Better electric efficiency / environmental performance Low economies of scale / better fit to open power markets Uncertainties Gas/Electricity interface More market response, but Risk of domino effect Volatility of gas prices/high fuel costs Contractual arrangements Taxation-CO2 price
8
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Major Security of Supply Issues
9
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Adequacy of Gas Supply Global Gas Reserves by Regions (tcm) Source: Cedigaz
10
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Access to Gas Resources Revenue sharing: incentives for countries to develop their resources for export Incentives for investment into export infrastructure Financing and risk mitigation Long-term contracts - proven instruments Adaptation to new competitive conditions JVs/partnerships: integration along the gas chain (physical and financial) Access to open liquid markets
11
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Transit/Facility concentration 80% of Russian gas production from three fields (Urengoi, Yamburg and Medvezhye) The Yamal-Nenets corridor transports 90% of Russian gas Ukraine transits 80% of Russian gas exports to central and western Europe Transmed (Algeria/Italy) transports 33% of Italian consumption GME (Algeria/Spain) transports 30% of Spanish consumption More than half of Norwegian production and exports from Troll and associated pipelines (Norway). LNG: 11 regasification terminals in Europe
12
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Substantial investment will be needed Source: World Energy Investment Outlook 2003 Annual gas investment in OECD Europe
13
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Price Signals in Open Markets US Spot and Forward Prices – Henry Hub Source: Energy Intelligence
14
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Amber Major pipeline and regas projects
15
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Challenges for Investment in Open Gas Markets Do not regulate when competition works US Hackberry decision: LNG terminals not subject to TPA UK: LNG terminals/BBL exempted from TPA When regulated, make sure the rate of return is competitive Do not exclude long-term contracts auctions for capacity
16
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Unbundling of Functions/ Responsibilities Multiple players, longer chains, more interfaces Unbundling between infrastructure and supply Unbundling of responsibility Main responsibility vis-à-vis customers AND shareholders Responsibility for own customers, not the whole market Coordination of responsibility along the chain Unbundling of investment decisions Transportation capacity to fit future supplies Investment incentives for a regulated private business Investment in insurance assets (for low-probability/high- impact events)
17
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Conclusion
18
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY Key messages The European (and global) supply and demand balance is at a turning point Markets play their role but cannot play it alone Governments have an important role: To define clear security of supply policy objectives (f or both supplies and infrastructure) To define clear responsibility of the various stakeholders To ensure consistency of the regulatory framework with policy objectives Leave instruments to the market players Mix of supply-side instruments, storage, demand- side response, spot and trading instruments
19
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY
20
SECURITY OF GAS SUPPLY IN OPEN MARKETS LNG AND POWER AT A TURNING POINT INTERNATIONAL ENERGY AGENCY www.iea.org
Similar presentations
© 2024 SlidePlayer.com Inc.
All rights reserved.