Points and Capacity Limits in Phase 2. Revised APPENDIX 1

Transcription

1 Points and Capacity Limits in Phase 2 Revised APPENDIX 1

2 Appendix 1: Points and Capacity Limits 2 1. Introduction This Appendix contains the updated listing, description and Capacity delimitation of Points resulting from the completion Phase 1 of the OS The Appendix is limited to describing Points qualified for Phase 2 and does not describe Points disqualified in Phase 1 or any other alternatives that it may become relevant to offer outside the framework of OS 2009 or after its completion. All Points offered in OS 2009 are exclusively Entry or Exit Points in the Danish Transmission System. Thus, the Points do not include any internal or storage points in the Danish Transmission System. No new Points have been added between the phases, and the existing Entry Point at Nybro is still excluded from the present round of Open Season. The primary information in this Appendix 1 is the Economic Capacity Limits, the Maximum Technical Capacity Limits and the eligible start date for OS 2009 Capacity applicable for the Points. The additional description of prospective new infrastructure provides an insight into Energinet.dk Gastransmission s planning and technical considerations and further attempts to explain the necessary links between the new technical assets - pipelines and compressor stations - that are required to provide additional Capacity. The sum of Phase 2 Bids combined with Energinet.dk Gastransmission s internal planning will identify the eventual final Investment Combination of new Points and technical assets. Prior to launching Phase 1, Energinet.dk Gastransmission limited the potential expansion scenarios to Entry and/or Exit Points at Sæby, Avedøre, Dragør and Ellund. First-round bids and parallel suspension of the interconnections at Sæby (Skanled from Norway) and Avedøre (Baltic Pipe interconnection to Poland) resulted in only Dragør and Ellund being relevant on the border between the Danish and German transmissions systems in the remaining Open Season procedure. It has further been decided that lack of sufficient Phase-1 long-term bid interest at Dragør combined with sizeable investments being required to significantly increase capacity leaves Dragør s inclusion in Phase 2 not justified from an economic point of view. However, Energinet.dk is still in dialogue with the Swedish Transmission System Operator, its regulatory authority, the EU Commission and the market stakeholders about the future capacity demand in Sweden. Consequently, Phase 2 of Open Season 2009 is limited to offering new entry and exit capacity on the border to Germany at Ellund. 1.1 Supporting cost and tariff analyses for Phase 2 The method by which the annual costs of new investments are added to the existing tariff base depends on the regulation in force at the time of operation. Thus, with regard to tariffs, Appendix 1 does not include any economic signals resulting from the individual Investment Combinations. Energinet.dk has published estimates of the impact of new assets on the existing cost basis:

3 Appendix 1: Points and Capacity Limits 3 8CF69024E5A4/0/OS09initialcostandtariffanalysis.pdf, which analyse the costs relating to Energinet.dk s planned capacity expansion and evaluate the spread between transportation costs per unit (m3) transmitted through the transmission system. A revised and more detailed analysis will be published together with this bidding material to supplement the information on bidding in Phase 2. The revised cost analyses will show the expected cost development based on the reduced capacity requirements identified in Phase 1 as compared to the pre-os 2009 Phase 1 potential. Even if the investments involved in the prospective expansion of the Danish Transmission System are lower, their relative size and the derived operating costs are still significant if set against the current depreciated book value of Energinet.dk Gastransmission s assets. An impact on the tariff levels is therefore expected. Energinet.dk Gastransmission is aware that long-term contracts involving fixed quantities tied to a variable tariff imply a risk to Participants, which may adversely affect their involvement in the OS Energinet.dk Gastransmission has therefore engaged in a dialogue with the Danish Energy Regulatory Authority to clarify the impact of investments on future tariffs. However, Energinet.dk Gastransmission will not fix or guarantee separate tariffs for OS 2009 Capacity as the tariffs for OS 2009 Capacity must be identical to the tariffs applicable at all times for transport in the Danish Transmission System. 1.2 Capacity Limits and Phase-1 qualification Open Season originally identified four potential border Points into the Danish Transmission System that could connect to adjacent systems with a view to future import and transit of natural gas: Entry at Sæby from Skanled and Norwegian gas deposits: o with connection to the offshore Skanled project, the Maximum Technical Capacity Limit (only entry Capacity was offered) was set as equal to the estimated Capacity from the section connecting to Denmark of the now abandoned Skanled project Entry and Exit at Avedøre towards Baltic Pipe and the Polish gas market: o Interconnection Point designed to facilitate the flow in the Baltic Pipe. If Baltic Pipe were built, Avedøre would be expected to become a border Point between the Polish and Danish Transmission Systems, offering transport in both directions Entry at Ellund towards the German gas market: o The existing interconnection to German systems at Ellund can be expanded in increasing steps based on investments on both sides of the border. The capacity on each side of the border must necessarily correspond to the availability and performance of the systems, and again Energinet.dk Gastransmission will eventually offer new Capacity up to the lower maximum limit on either side. It is assumed that further exit Capacity at Ellund will be established by looping the pipeline Egtved-Ellund. However, increasing the entry Capacity at Ellund will, as a first step, require increased pressure on the border (from expanding the compressor at Ellund or from a compressor on the Danish side) and, as a second step, require looping of the pipeline Ellund-Egtved. Therefore, only the wish to substantially increase the entry Capacity will lead to the increase of exit Capacity Exit at Dragør towards the Swedish gas market:

4 Appendix 1: Points and Capacity Limits 4 o Currently, firm exit Capacity at Dragør is defined according to estimates of what the Swedish system is able to receive under the present market conditions and at the pressure levels provided at Dragør. If changes to the Swedish system allow for increased transport, the firm Capacity level can be maintained/raised at Dragør, once a planned compressor station at Langeskov, Denmark, is in operation. Ellund and Dragør are existing points whereas Sæby and Avedøre were envisaged for facilitation of transit of Norwegian gas through Skanled primarily intended for the Polish market connected at Avedøre. Only Ellund (both entry and exit) had sufficient bids in Phase 1 to justify its inclusion in Phase 2. Consequently, all other points are eliminated in the subsequent capacity reservation process. The Maximum Technical Capacity Limits constitute the upper limit for the Capacity that can be realised by Energinet.dk Gastransmission (together with the System Operators of the Adjacent Systems) before the year 2015 by way of an expansion of the Danish Transmission System together with relevant incremental steps of expansions. The limit serves to show the amount of Capacity Energinet.dk Gastransmission is likely to offer if the investments are realised. Figure 1: Technical and Economic Capacity Limits, KWh per hour kwh/hour Min. tech. limit Max. tech. limit Eco. Cap. limit ,400, ,350, ,650, Ellund, Entry Ellund, exit Energinet.dk Gastransmission has decided to include Economic Capacity Limits in the description of the Points. The limit serves to indicate the level of Capacity needed to constitute the economic justification for constructing a Point on the basis of Long-Term OS 2009 Capacity Agreements. The Economic Capacity Limits are signals passed between Energinet.dk Gastransmission and Participants that have a special interest in specific Points. These signals are relevant also for the prospective expansion at Ellund. The figure above includes Economic Capacity Limits for each point indicated by yellow dotted lines. The points included in OS 2009 have furthermore been set forth in table 1 on page 6 below. The column New Capacity in table 1 indicates the technical Capacity expansion steps identified by En-

5 Appendix 1: Points and Capacity Limits 5 erginet.dk Gastransmission and offered under OS The steps have been decided on the basis of technical parameters and are largely determined by constraints in the Danish Transmission System or the Adjacent Transmission Systems. It will be the accumulated sum of Bids compared with the technical Capacity expansion steps that qualify a Point for expansion in Energinet.dk Gastransmission s investment planning. The Capacities are listed to give the market an understanding of the relation between Capacity expansion and new assets required. To some extent, this list also serves to explain the Capacity limits or steps offered. 2. List of Points included in Phase 2 of the OS 2009 Energinet.dk Gastransmission invites Participants in Phase 2 to submit Bids for Capacity at the following Entry and Exit Points: Ellund: D1. Entry Ellund (from the DEUDAN transmission system in Northern Germany) D2. Exit Ellund (to Germany) No other Points can be included in the OS Map 1: Planned Capacity expansion in OS 2009 Points and infrastructure considered in Phase 2 of Open Season 2009 Relevant entry-exit points: C Dragør to/from Sweden D Ellund to/from Germany Lille Torup Pipelines: h Ellund-Egtved Loop Point E: Nybro Egtved Pipeline h km Point D: Ellund Compressor g Langeskov Compressor d Point C: Dragør Compressors: d Langeskov g Ellund (on either side of the border)

6 Appendix 1: Points and Capacity Limits 6 Point/project Implementation EIA and ESPOO approval Table 1: Points included in OS 2009 listed with existing capacities and prospective new firm Capacity Construction Operation Current capacity Announced by Energinet.dk Interruptible Firm Volume Level 1 Level 2 Current New quality New capacity Capacity in point Marginal new firm Project no. Route/location Status Year Year Nm 3 /h Nm 3 /h Nm 3 /h KWh/h 1 KWh/h 2 bcm/y Nm 3 /hour kwh/h 1 kwh/h 2 mcm/d bcm/y D1 (DK/D) Entry Ellund (from existing DEUDAN) Compressor (g) Ellund (DK/D) 1 Existing - - Total, step , ,8 Pipeline (h) Ellund-Egtved Not initiated * * Could be possible from 2014 Compressor (g) - step 2 Expansion Total, step , ,1 Compressor (d) Langeskov Not initiated * * Could be possible from 2014 Total, step , ,8 1 Could be located on either side of Danish-German border D2 Exit Ellund (to existing DEUDAN) Pipeline (h) Egtved Ellund Not initiated Compressor Not initiated Total , ,0 3. Points relevant in Capacity expansion in the Danish Transmission System The following sub-sections contain a description of the Economic Capacity Limit and the Maximum Technical Capacity Limit and include separate tables showing the technical data for the specific Point. The description is divided into entry and exit although, in Denmark, infrastructure required to increase capacity is in some cases identical for entry and exit. 3.1 Ellund Entry (from DEUDAN) Data sheet Ellund Entry Expected start date Economic Capacity Limit, Maximum Technical Capacity Limit, Name of Point kwh/h kwh/h Ellund, Entry Oct Oct Step 1 Oct. 2013* 3,350,000 4,785,000 Step 2 Oct ,400,000 7,700,000 Step 3 Not qualified in OS 2009 Notes: KWh/m 3 = 11 * According to Energinet.dk s current knowledge, an Ellund compressor situated on the German side of the border may be put into operation already in October So far, it has not been decided whether the compression should take place on the Danish or the German side of Ellund. Final investment decisions are not expected until the end of Currently, the Shippers are not offered any Firm Entry Capacity at Ellund by Energinet.dk Gastransmission as the delivery pressure at the border Point is insufficient for gas to physically enter

7 Appendix 1: Points and Capacity Limits 7 the Danish Transmission System. Thus, offering Firm Entry Capacity at Ellund requires an upgrade of the German Transmission System or the construction of a compressor station on the Danish side of the border (both in the following referred to as compressor g) and a reinforcement of the Danish Transmission System. A reinforcement of the Danish Transmission System is required because the existing Ellund-Egtved pipe is narrower than the combined Nybro Egtved pipes, and deliveries from Ellund therefore cannot provide the same pressure at Egtved as deliveries at Nybro. Reinforcement by means of, for instance, a compressor at Langeskov or an Egtved-Ellund pipeline doubling is not expected to be possible on the Danish side until October Interruptible Capacity, which is expected to be available, may, however, be a reality before 2013 through upgrading of the existing DEUDAN system. Furthermore, Energinet.dk Gastransmission has secured a piece of land for a compressor station on the Danish side of Ellund and has made the first initial prospect studies. An EIA approval process has not been initiated yet. It is not expected that such a compressor station can be ready until October The construction of a compressor station on the Danish side of Ellund or at Ellund in Germany will pave the way for the realisation of a Step-1 expansion. Gasunie Deutschland is evaluating whether capacities for Step 1 can be made available already from October A future Danish-Swedish reliance on import entirely from Ellund will require a looping of the pipeline between Ellund and Egtved (pipeline h). The time frame for this expansion scenario is The demand for northbound Ellund Entry Capacity has in recent years exceeded both the current zero Capacity, the previous limited Firm Capacity, the future Capacity now mentioned on Gasunie Deutschland s website and the 1,556,335 kwh/h (136,521 m³/h) Capacity requested by three market players in E.ON Gastransmission's recent open season. Gasunie Deutschland and Gas Transport Services market screening in November 2008 in regard to the integrated Gasunie open season showed an interest in 7,500,000 KWh/h of northbound capacity and an interest, although smaller, in southbound capacity. According to Gasunie, the interest of German shippers in expansion at Ellund is maintained also in the July 2009 non-binding phase of Gasunie s open season. Thus, the demand for northbound Ellund Capacity has been substantiated. Even though the Shippers and Energinet.dk Gastransmission are interested in securing northbound Ellund Entry Capacity, and Gasunie Deutschland and Energinet.dk Gastransmission will try to coordinate their open season time schedules, it should be noted that Energinet.dk Gastransmission still has not come to an agreement on a viable solution with regard to volumes and pressure levels with its German counterpart TSOs (DONG Energy Pipelines, Gasunie Deutschland & E.ON Gastransport), and that no decision regarding the required Langeskov compressor (d) or looping of the Ellund-Egtved pipeline has been made yet. 3.2 Ellund Exit (to DEUDAN) Data sheet Ellund Exit Expected start date, Economic Capacity Maximum Technical Capacity Limit,

8 Appendix 1: Points and Capacity Limits 8 Limit, Name of Point Year kwh/h kwh/h Ellund, Exit ,650,000 3,784,000 Note: KWh/m 3 = 11 The current Firm Exit Capacity at Ellund is 4,200,000 kwh/h. The increase in Firm Capacity at Ellund Exit requires a compressor station at Egtved (c) and a looping of the Ellund-Egtved pipeline (h). Energinet.dk Gastransmission is currently expecting a decline in demand for exit Ellund Capacity due to the reduced forecast for the Danish North Sea deliveries. However, new deliveries from the Danish North Sea or future connections to, for instance, Norway may change that prospect.