ENTSOG GRIP South - Main Report

6.3 NetworkAdaptability to SupplyEvolution

This assessment aims to look at the European infrastructure’s ability to face very different supplymixes from short-term / long-term trends.

DEMAND

SUPPLY

Supply source Smove fromReference Supply toMaximum /Minimum Potential Supply scenarios – – EvenMaximisation: Maximisation of source S up to itsMaximum Potential Scenario, with reduction of the others sources down toMinimum Potential Scenario – – EvenMinimisation: Source S goes down up to itsMinimum Potential Scenario, the others sources increase up to their Maximum Potential Scenario

1-day Average Situation

Achievement of minimum /maximum potential supply from source S, if no flow pattern enables to reachminimum /maximum potential supply from source S -> lack network adaptability to supply evolution from source S

Figure 6.16: Network Adaptability to Supply EvolutionMethodology

This assessment will capture the ability of the network to contribute to the opti­ mization of shippers’ supply portfolios. Network flexibility contributes to shippers compensationof the variations amongcost of supplies sourceby the lesser or great- er utilization of them. A competitivemarket for the end customers needs an inter- connectedandflexiblenetworkwhichminimizes thepricespreadswith theadjacent markets.

6.3.1 Newconfigurationofgas flows intheSouthRegionnetwork

In the SouthRegion, during previous years, new trends in supplymixes have been noticed. The influence of price discrepancies in Europe and throughout the world has resulted in a new configuration of gas flows entering the network in the South Region since the end of 2011. The first months of 2012 have seen a sharp drop in LNG entries and amarkeddominance of northern flows to the south of thenetwork: \\ In Northwest Europe , due to excess of pipeline gas, spot prices on themarket were lower in2011 than long-termcontract prices: thedifference reachedup to 8€/MWh. \\ In Asia , gas prices remainmuch higher than prices in Europe with a demand for LNG that rose significantly in the second half of 2011 due, in particular, to theclosureof the Japanesenuclear reactors after theaccident at Fukushima in March 2011. \\ In Europe , the significant drop in theuse of gas to generate electricity attributed to both the rising generation of electricity from renewable energy sources and the increase of coal use, in addition to the economic crisis, have reduced the demand for natural gas in Europe, and in particular in the South Region. This fact has caused a surplus of supply originally destined to theEuropeanmarket.

ENTSOG–GRIPSouth 2013–2022 |

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