Examining the Demand of Natural Gas Storage in Europe · 2018. 3. 6. · services portfolio...
Transcript of Examining the Demand of Natural Gas Storage in Europe · 2018. 3. 6. · services portfolio...
Examining the Demand of
Natural Gas Storage in
Europe
Trends 2012-2030
Madjid Kübler
Manchester, June 07th 2012
Agenda
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1 Development of the NWE gas storage market until 2030
0 Introduction of TEAM CONSULT
Introduction of TEAM CONSULT
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Our customer base covers both: national & global players
REFERENCE LIST (EXCERPT)
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Introduction of TEAM CONSULT
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Our team consists of highly qualified experts with several years of
experience in the energy industry
TEAM DEVELOPMENT
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Heike Wunderlich
Project Manager
Madjid Kübler
Managing Director
Sybe Visser
Senior Advisor
Jürgen Kehrmann
Senior Advisor Sirko Pika
Project Manager
Bernhard Witschen
Senior Advisor Christoph Hankeln
Project Manager
Jens Völler
Consultant
Jan Meier
Senior Consultant
Todor Dimitrov
IT Applications
Michele Bundtzen
Apprentice
Christin Balzer
Internal Projects
Sandra Hartmann
Assistant of MD
Sven Ballentin
Econometrics
Dennis Korinth
Apprentice
Volker Franke
Project Manager
Armin Beilfuss
Senior Consultant
Georg Haas
Project Manager
Introduction of TEAM CONSULT
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A large number of projects with a variety of topics have kept us pretty busy
in the last 12 months
CONTENT OF RECENT ASSIGNMENTS
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Gas-to-Power
Gas Storage
G2G-Competition / Gas-Strategy
Gas Procurement & Contracts
Sourcing of gas fired
power plants
Renegotiation of gas-to-
power contracts
Evaluation of a “merchant
plant” business model
Development of German &
European storage market
Strategy regarding further
development of flexibility
services portfolio
Evaluation of potential
storage enhancements
Support on price revision: Preparation of market data
Analysis of contracts
Negotiation strategy
Arbitration support
Re-design of procurement
strategy
Conduction of gas tender
process
Development of long-term
market scenarios
Competitor analysis regarding
strategy, volumes and margins
Attractiveness of selective
market segments
Design of market strategies
Introduction of TEAM CONSULT
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TEAM CONSULT’s experts have been regularly invited as speakers &
chairmen of major industry events
TEAM CONSULT AT CONFERENCES & EXHIBITS
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Madjid Kübler was chairman of the conference day two.
Bernhard Witschen presented TEAM CONSULT's position at
„Volatile gas prices and the consequences for gas
procurement“. Euroforum Konferenz Gasbeschaffung
22nd – 23rd February 2011 in Köln
8th - 10th February 2011 in Essen
Madjid Kübler chaired the stream “The future of gas: organized
withdrawal or technological advancement” and presented ”Not
the procurement but the demand is going to be the problem”
17th annual Flame 2011
9nd – 13th Mai 2011 in Amsterdam
Madjid Kübler has chaired the conference stream “European
Country Spotlight: Germany”
17th November 2010 in Brussels
Sybe Visser spoke about “Regulation & Market Structure: The
German Business Perspective”
Sirko Pika presented „Regulation and practice in the German
gas market” 11th May 2011 in Oldenburg
Agenda
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1 Development of the NWE gas storage market until 2030
0 Introduction of TEAM CONSULT
Development of the NWE gas storage market until 2030
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Where is the storage market heading at?
“E.ON Gas Storage sells minority stake in German storage facilities”
“VNG offers first gas storage capacity at Etzel”
“Bergermeer gas storage gets approval”
“OMV to start open season on 100Mm³ on sites”
“Centrica continues to assess Baird, Caythorpe project on hold”
“SSE and Statoil inaugurate Aldbrough storage extension”
“Fluxys to expand natural gas storage capacity”
HEADLINES ABOUT TODAY‘S TOPIC
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The flexibility market is affected by a set of fundamental drivers
Change of flexibility
needs
Aspects of security of
supply
Development of demand
Changes of demand structure
Decrease of indigenous production
Changes of supply
structure
Weather conditions
Changes along the
value chain
DRIVERS FOR CHANGES OF FLEXIBILITY NEEDS
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Our static forecast shows a structural excess supply for the NWE storage
market until 2030
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Source: TEAM CONSULT Analysis Strategic stock = 5% of imports to NWE except from Norway
TEAM CONSULT‘S FORECAST UNTIL 2030
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Overall storage capacities are necessary in a severe winter; who is willing to
pay for them throughout the rest of the time?
Source: Gas Storage Europe, TEAM CONSULT Analysis
STORAGE FILLING LEVELS IN GERMANY
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The summer/winter spread is the traditional valuation parameter at traded
markets for seasonal flexibility; it is at low levels for more than two years
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Source: ICIS Heren, TEAM CONSULT Analysis
DEVELOPMENT OF SUMMER/WINTER SPREAD AT TTF
Ø 6.0 Ø 5.7 Ø 2.9 Ø 2.9
Development of the NWE gas storage market until 2030
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Valuation of flexibility between traded markets and storage operators is struct-
ural; contract price negotiations in long-term storage contracts possible?
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Ø S/W Spread in Q1/2012 at TTF
YEARLY STORAGE TARIFFS IN EUROPE 2012/13 (for bundled products)
Source: Storage Operators, TEAM CONSULT Analysis
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Dynamic developments and actions of market participants can be drawn in a
theoretical approach
THEORETICAL MARKET EFFECTS
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Time Time Time S
tora
ge
ba
lan
ce
Sto
rag
e b
ala
nc
e
Quantity
Pri
ce
Quantity Quantity
Pri
ce
Pri
ce
1a
S S1 S1 S1
S2
Current forecast
Supply increase
Cancellation of
projects
Avoidance of worsening
future situation
Market exit old
storages
Supply decrease
Ph
ys
ica
l s
tora
ge
ba
lan
ce
Th
eo
reti
cal m
ark
et
eff
ec
ts
1b
2a
2b
3a
3b
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Outlook on decreasing indigenous production almost unchanged
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Source: Statline, WEG, BMWi, Danish Energy Agency, Eurostat, National Grid, Oil & Gas UK; TEAM CONSULT Analysis *estimated figures
DOMESTIC PRODUCTION IN NORTH WEST EUROPE (NWE)*
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Gas demand in traditional heating segments is decreasing, need for seasonal
flexibility going down as well; G2P increasing with uncertainty on flex needs
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*In GCV = Gross Calorific Value Source: StaBuA, TEAM CONSULT Analysis
GERMAN GAS DEMAND BY SEGMENT: TC FORECAST (in TWh*)
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In the next several years a large quantity of storage capacity is about to
become operational in Germany and the Netherlands
540
1.106
748
966982
2015/16 2016/17 2014/15 2013/14 2012/13
Germany:
Netherlands:
Zuidwending Cavern storage expansion: additional WGV of some 90 mcm per 2012/13 and
another 90 mcm per 2013/14
Bergermeer storage (new): some 4,100 mcm WGV announced start of operation around 2015
Norg & Grijpskerk (expansion): up to 9,000 mcm WGV start of operation not planned yet
Groningen field still and for the mid-future equipped with sufficient flexibility to meet customer's
flexibility requirements
Source:TEAM CONSULT Analysis
ADDITIONAL STORAGE CAPACITY IN GERMANY AND NETHERLANDS (data in mcm)
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∑ Dutch WGV as is
5,300
∑ German WGV as is
23,400
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The individual storage markets widely differ in market structure design and
regulatory framework
WGV/Gas
consumption
Competitive Status Storage access
regulation
Storage tariff
regulation
Relevance of
auctioning
Germany 25% Oligopoly (85%) Negotiated Negotiated Some
Czech
Republic 40%
Triopoly with dominant
player (>75%) Negotiated
Negotiated /
Auctioned Strong
Austria 40% Duopoly Negotiated Negotiated Some
Netherlands 10% No TPA available Negotiated Negotiated None
France 25% Duopoly with dominant
player (>75%) Regulated
Negotiated /
Auctioned Strong
Italy 20% Duopoly with dominant
player (>90%) Regulated Regulated None
DIFFERENT STORAGE MARKETS WITHIN EU
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New infrastructure developments and further integration will lead to cross-
border opportunities & threats
CONVERGING EUROPEAN ENERGY MARKETS
Gate, Rotterdam
Zeebrugge
Dunkirk planned
(France)
LNG Terminal
MEGAL
Swinoujscie planned
(Poland) European energy markets
will converge with respect
to: Regulation
Infrastructure
New sourcing and supply
options across borders
emerge
Competition across
border increases
A storage portfolio spread
across regions offers new
marketing options
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32.2 23.4
13.0 5.3
5.4 3.4
3.7 3.3
Current WGV in bcm
Probable WGV in 2030
UGS capacities
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The shutdown of 8 nuclear plants in Germany in 2011 and the decommis-
sioning of the rest until 2022 will change Germany’s energy landscape
INSTALLED CAPACITY INCL. NUCL MORATORIUM INCL. NEW PLANTS** (Power Plants of Public Supply > 100 MW + Renewables)
Source: TEAM CONSULT Analysis * Coal, lignite, gas, oil and pumped water storage plants ** Incl. new power plants as announced (17.5 GW)
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Renewable load will increase over time – starting in 2020 it can exceed total
German power demand in certain hours of the year
GERMAN LOAD DEMAND AND RENEWABLE SUPPLY (TC SIMULATION) (in MW)
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Source: EEX, Entsoe; German Ministry of Environment (BMU), Fraunhofer Institute; TC Analysis
2010 2015
2020 2030
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Without a storage system for excess renewable power, any power exceeding
demand would be wasted as capacities are taken off the grid
8760 Availability in hours/a
Distribution function of
power generation
Load- management
Grid extension
Demand curve
Grid capacity
Square = annual
power volume
Installed ( )
and available
capacity of
renewables
(Wind & PV)
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1. Power demand
2. Load management reaches
its limits
3. Limits to grid extension
4. Overproduction: Removal of
RE capacities from the grid
5. Transformation of excess
power into SNG to balance
peaks = full use of
renewable power
Source: DVGW Innovationsoffensive, E.ON Ruhrgas
Illustrative
POTENTIAL OF GAS INFRASTRUCTURE TO ABSORB EXCESS POWER
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2
3
4
5
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Marketing of capacities becomes more complex, products need to be vend-
ible & fit to customer’s needs; possibility of secondary marketing necessary
DEVELOPMENT OF MARKETING OF STORAGE CAPACITIES
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Retailer
Wholesaler
Producer
Trader
TSO
Power Generation
Seasonal Flex.
Peak Shaving
Strategic Stock
Balancing
Shift of gas flows
Power to Gas
Asset-backed
Trading
Parking
Interruptible
capacity
Bundled units
volume
Withdrawal/
injection capacity
Products
Mark
et segm
ents
Products Needs Segments Willingness to pay
Wheeling
Duration*
* e.g. Year, Season, Month, Day
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Development of the NWE gas storage market until 2030
Storage business becomes more and more an entrepreneurial business with
more & more focus and commercial than on technical issues
TEAM CONSULT’s forecast model on the storage balance for NWE shows significant
excess capacities on behalf of WGV until 2030.
Since the last forecast in 2011 no major changes on the likely scenario for the storage
market has happened: gas demand and supply and along with the them the resulting
flexibility needs haven’t changed.
Storage market is under pressure: significant additional capacities are about to become
operational in Germany (foremost), G2G competition puts pressure not only on the gas
price but on the value of flexibility
Storage operators need to react on this situation with ever more effort for marketing of
their capacities.
Certain opportunities for a more optimistic development of the gas storage market are
possible:
New international interconnectors between markets leading to new gas flows
Increasing influence of renewable energies
Decommissioning of nuclear power plants: Germany (by 2022), Belgium (by 2025), Switzerland
(by 2034)
SUMMARY OF NWE STORAGE MARKET DEVELOPMENT
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Contact data
Gas Power Oil Heat
TEAM CONSULT G.P.E. GmbH
Robert-Koch-Platz 4
10115 Berlin
T. +49.30.400 556 00
F. +49.30.400 556 99
www.teamconsult.net