ENTSOG Southern Corridor (SC) Gas Regional Investment Plan (GRIP) 2014-2023 / Main Report

3.2 Annual Demand Breakdown

Figure 3.3 shows the annual demand breakdown of the Southern Corridor Region for the last four years together with their percentage evolution. The chart is broken down into Residential, Commercial and Industrial (RCI) demand compared to Pow- er Generation demand. We may see the result of the economic conditions applying these last years on the gas-fired power generation sector. On one hand cheap coal combined with low carbon prices from the EU Emission Trading Scheme (ETS) have made it recently attractive to burn coal instead of gas. On the other hand the pro- gression of the use of renewable energy sources has decreased the use of gas in power generation.

1,600 1,400 1,000 1,200 TWh/y

+6.34%

-3.61%

-3.18%

26.72%

26.78%

24.65%

27.16%

-3.37%

-12.11%

+4.82%

73.28%

73.22%

75.35%

72.84%

800

600

+6.94%

-3.70%

-0.26%

400

200

0

2009

2010

2011

2012

RCI

Power generation

Figure 3.3: Evolution of Southern Corridor yearly demand in the period 2009 – 2012 and its breakdown

The historical data in figures 3.4 and 3.5 illustrate, that annual temperatures and economic downturn also heavily influence gas demand. This is due to the high per- centage of households (in most countries) that rely on gas for heating, as demand increases when outdoor temperatures decrease. Since annual weather conditions cannot be forecasted, such extremes are not included in annual demand forecasts. In the same way, economic growth rates can only be reasonably assumed during forecasting, without the possibility to anticipate negative or positive unexpected shocks. This should be borne in mind when comparing actual data and forecasts. Figure 3.4 shows a quite significant increment in Power Generation demand over the next ten years. It is important to stress the considerable amount of uncertainty around the Power Generation figures. Power Generation is market based and is heavily influenced by fuel prices and by incentives provided to renewable sources.

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Southern Corridor GRIP 2014–2023