ENTSOG Annual Report 2016

Research and Development Plan

To meet stakeholder expectations, ENTSOG methodologies, tools and data scenarios are continually being improved. The resulting improvements have provided benefits to a number of ENTSOG deliverables and activities. The Supply and Demand (S&D) and NeMo Kernel Groups form the core of the Investment Working Group in charge of developing innovative approaches and tools.

SUPPLY AND DEMAND KERNEL GROUP

The Group performs research to expand knowledge of the supply and demand aspects of European gas. This knowl- edge is used to develop an improved definition of the as- sumptions and approaches used in the Seasonal Outlooks and TYNDP.

Analysis of Gas Demand

Analysis of Gas Supply

During 2016, ENTSOG further developed its knowledge and analysis of gas demand, which was driven by a number of factors. For long-term gas demand, developing the scenarios for both TYNDP 2017 and TYNDP 2018, including the exten- sive stakeholder engagement during these processes, has led to increased focus on sectoral demand behaviour, inter- relationships and dynamics. This is especially so in the work completed in collaboration with ENTSO-E regarding the power sector, both in the use of data available from e- TYNDP 2016 to create the thermal-gap methodology for TYNDP 2017 and the joint development of TYNDP 2018 scenarios. This has been achieved in both the context of country-level specifics and EU-level dynamics, with efforts to understand how these link in the greater context of European climate goals and how gas plays a key role in the future energy mix.

The framework for the gas supplies was developed by the Supply and Demand KG and completed for TYNDP 2017 and both Seasonal Outlooks taking into account stakehold- er feedback. Regarding the Seasonal Outlooks reports, the definition of supply patterns were derived from the supply mixes cap- tured for the last Summer and Winter Reviews respective- ly. This method makes it possible to cap the elasticity given to the model for each of the supplies to reliable levels, while giving additional flexibility only to some of the sources when needed to reach the correspondent seasonal targets. For TYNDP 2017 , the supply assumptions were defined as potential supplies from different sources. The word “poten- tial” implies that these gas supplies were not considered as forecasts of future flows. In order to capture the uncertainty in the development of the different supplies, the minimum and maximum potentials were defined as the lower and up- per limits for the expected imports coming from each source. The development of these potentials by the Supply and Demand KG was based on publicly available literature and reports and later on discussions between members and stakeholders held during the feedback process. These po- tentials have covered supplies from outside the EU arriving via pipeline from Russia, Norway, Algeria, Libya, Azerbaijan, and also as LNG. Supplies also include conventional nation- al production and green gases coming from inside the EU. Moreover, based on stakeholder feedback for TYNDP 2017 , it was decided to use a more realistic approach for the first year of the assessment (2017) by taking into account the expertise developed by ENTSOG on the seasonal outlooks. The supply potentials for the first year of the assessment were then built using the average of the maximums and minimums historically observed for each source in line with the approach retained for the Seasonal Supply Outlooks .

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ENTSOG Annual Report 2016

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