Policy Dialogue Nord Stream 2: Assessing the …Possible Ukraine transit post 2020 with NS2 30 bcm...
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Policy Dialogue Nord Stream 2: Assessing the economic and security impact on Central and Eastern Europe Peter Kotek SeniorResearch Associate REKK European Policy Centre 18.10.2017.
Transcript of Policy Dialogue Nord Stream 2: Assessing the …Possible Ukraine transit post 2020 with NS2 30 bcm...
Policy Dialogue Nord Stream 2:
Assessing the economic and security
impact on Central and Eastern Europe
Peter Kotek
Senior Research Associate
REKK
European Policy Centre
18.10.2017.
Two modelling studies – opposing
conclusions. What is the reason?
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In English:
http://rekk.hu/downloads/academic_publications/NordStream2_REKK.pdf
Welfare effects of Nord Stream 2 commissioning
compared to reference case
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2015 OVERNIGHT 2020
LTC bookings crowd out short-term
trade
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23% LTC
74% LTC
100% LTC
58% LTC 77% LTC 100% LTC
57% Spot
26% Spot
32% Spot
0% Spot
40% Spot 23% Spot
32% Spot0
50
100
150
200
250
300
Ref 2015 NS 2 Ref 2015 NS 2 Ref 2015 NS 2 Ref 2015 NS 2
Német-osztrák Cseh-szlovák Osztrák-magyar Szlovák-magyar
TWh/év
DE-AT CZ-SK AT-HU SK-HU
TWh/year
Foreclosure threat coming to reality?
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FRn-FRs
ES-PT
CZ-SK
DE-NL
NL-BE
DE-AT
ES-FRs
DE-NL
AT-SI
DE-CHAT-IT
DE-ATDK-SEAT-SKDE-PL
AT-SI
LY-IT
SI-HR
DE-CZ
DE-ATDE-PL
NL-BE
UK-IUK
NO-NL
DE-NL
NO-NL
DE-DE
DZ-IT
CH-IT
0-0
CZ-DE
DE-FR
RU-DEDE-CZ
CZ-SK
FRn-FRs
NL-BE
AT-SI
DE-CH
BE-FR
DE-ATDE-PL
SI-HR
DE-AT
DE-PL
NO-NL
0%
20%
40%
60%
80%
100%
120%
0% 20% 40% 60% 80% 100% 120%
Ma
rke
ted
/te
chn
ica
l (%
)
Booked/technical (%)
2017
2020
2018
• DE-CZ-SK reverse flow capacities
booked by Gazprom. 80% between
2020-30 but some up to 2038
• HAG, SK-HU: Hungarian regulator
intervened; potential downstream
market foreclosureRU-DE: Lubmin II, Greifswald, Greifswald Entry, Vierow,
DE-CZ: Deutschneudorf, Oldbernhau 2, CZ-SK: Lanzhot,
Lanzhot 1, Lanzhot 2
Prisma, March 6, 2017
booking
booking
HEPURA cancelled LT
booking
Main differences in modelling
EGMM TIGER
Model
assumptions
Perfect
competition, partial
equilibrium
Perfect
competition, partial
equilibrium
Welfare
considered
All stakeholders Consumer surplus
EU-28
consumer effect
Winners and
losers
Everyone wins
Pricing logic TTF LNG + transport
cost
LTC pricing rigid flexible
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Main differences in reference case
assumptions
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EGMM TIGER
Demand 2020 ~7% demand increase
(TYNDP Grey)
PRIMES demand
(stagnant)
EU production 110 bcm in 2020 111 bcm in 2020
LNG imports ~50 bcm in 2016
~100 bcm in 2020
50 bcm in 2020
Possible Ukraine transit
post 2020 with NS2
30 bcm 30 bcm
Possible Ukraine transit
post 2020 without NS2
70 bcm 30 bcm
New infrastructure FID, Nord Stream 2 + EU
internal infra
FID, Nord Stream 2 + EU
internal infra
Other new infrastructure - PCIs, Turkish Stream
string 1, Opal restriction
lifted, HSK and Lanzhot
upgrade as of PRISMA
auction, NEL upgrade,
TAP & TANAP
INVESTMENT NEED TO KEEP UP PRICE CONVERGENCE
Key findings and messages
• Curtailment of trade via long-term bookings and contractualcongestion is constraining competition
• Access of the CSEE region to Western more liquid markets is curtailed by long-term bookings
• Further infrastructure is needed to offset the effects of theNord Stream 2 pipeline
• Modelling outcomes are always highly affected byassumptions:‣ Ceteris paribus modelling requires that only Nord Stream 2 and its
related infrastructure is assumed
‣ Additional infrastructure assumed by ewi (PCIs, Turkish Stream, etc.) is mixing the Nord Stream 2 effect with the additional infraeffect
‣ Decommissioning of Ukrainian infrastructure if Nord Stream 2 is notbuilt is highly unlikely. Using this as a reference overestimateswelfare effects of Nord Stream 2 highly
‣ Comparing apples to oranges?
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