Model-based Analysis of Infrastructure Projects and Market Integration in the Region of South-South Eastern Europe

Transcription

1 Institute of Energy Economics at the University of Cologne Model-based Analysis of Infrastructure Projects and Market Integration in the Region of South-South Eastern Europe Stefan Lochner Project Proposal Presentation Athens, 09 / 10 June 2008

2 European Gas Demand vs. Production Range EU Demand Forecasts BCM / year Import Requirements BCM (+80%) from 2005 levels Range EU Production Forecasts

3 Increasing import demand requires new infrastructure GALSI Nord Stream Nabucco Transmed / Greenstream Expansions South Stream Import Infrastructure additions until 2015: up to 210 BCM annual capacity (all planned / discussed projects) at least 80 BCM (projects already under construction) South-South Eastern Europe important import corridor for Russian/ Caspian/Iranian/ Algerian pipelines gas New projects affect existing assets, implications for market integration 3

4 TIGER Infrastructure Model & Database Complex systems require integrated analysis: Pipeline Storage LNG Terminal EWI TIGER Model Detailed analyses of physical gas flows (dispatch, bottlenecks, storage usage) Impact and Analysis of new infrastructure projects within the whole system Economic valuation of transmission capacities and bottlenecks over 550 nodes, 750 pipelines sections, 200 storages and 20 LNG import terminals Modelling with monthly granularity for a time period of up to 15 years 4

5 Example: The case of Nord Stream (2012) Findings (geo-coded): significant decline in Russian gas flows to Germany on existing pipelines (Yamal & Transgas) flows on new route Germany imply change in utilization of intra-germany transit pipelines increased available capacity for transits through southern Germany to France increased available capacity on TAG for transits to Italy Changes due to Nord Stream: Decrease volume flow Increase volume flow 5

6 TIGER Model Structure Overview Production Available production capacity Production costs or prices European and Non-European production sites Gas demand demand by country and sector historical monthly demand curves for sectors and country Infrastructure Existing capacities Assumed capacitiy additions Operating costs Pipelines, Storages, LNG Terminals TIGER Linear optimization dispatch model Objective: Cost-minimal demand satisfaction, restricted by available capacities Time-Period: 13 years with monthly granularity Pipelines Transported volumes Utilization Storages Stored volumes Utilization In- & outflows LNG Import Terminals Imported volumes Utilization Utilization of LNG storage in terminal (where possible) Locational Marginal Cost short-run marginal cost of gas supply at each node 6

7 Example: Volume flows on selected pipeline Monthly (upper chart) vs. annual flows (lower chart) million cubic meter Scenario1 Scenario2 Pipeline from A to B positive (net-)flow: A -> B negative (net-)flow: B -> A Findings in example: (increasing flows from A to B, but only in winter months, flows from B to A in summer months but higher in scenario 1) 2,5 BCM 2 1,5 1 0,5 0-0,5-1 -1, detailed analysis of gas flows (direction, monthly volumes) comparisons between scenarios 7

8 Example: Locational Short-run Marginal Costs Locational Short-Run Marginal Cost of Gas Supply:... how much does the provision of one additional cubic meter of gas at each node cost (cost to the total system)? Economic Interpretation: Differing supply costs as a consequence of physical bottlenecks justify locational price differences Valuation of physical bottlenecks and transmission capacity Market integration (possibility of arbitrage?) December

9 Focus: Infrastructure Projects in SSE Region Krk LNG South Stream GALSI Nabucco Interconnector- Italy-Greece 9

10 Possible Project Agenda (to be discussed by Project Steering Group) (1) Incorporation of relevant infrastructure projects in TIGER model (2) Definition of Scenarios Reference scenario; Options for definition: (1) Upstream: Development of European production, export capabilities of Russia, Central Asian countries, Iran (2) Midstream: most-likely scenario for realization of LNG and pipeline projects (3) Downstream: demand scenario (uncertainty power sector gas demand) Scenarios for investigating the impacts of relevant projects in the SSE region (3) Model-based Analysis Simulation of all scenarios on monthly basis Interpretation / Evaluation of results (4) Preliminary results / discussion / optional adaptation of scenarios (5) Provision (1) Final Written Report (2) Presentation of Results 10

11 Project Framework o Study Coverage: Analysis of aforementioned infrastructure projects in SSE region with respect to utilization, integration in & impact on existing system Identification of physical bottlenecks (infrastructure-related locational gas price differences) Analysis of impact of physical bottlenecks on market integration in the SSE region Comparison of economic value of transmission (from simulations) with actual transmission charges o Deliverables: Final Report and Presentation (plus presentation of preliminary results (optional)) o Project Duration: 3-5 months o Project Cost: 49,500 EUR 11

12 Contact: Stefan Lochner Phone: Fax: Institute of Energy Economics at the University of Cologne (EWI) Albertus-Magnus-Platz Cologne GERMANY 12

13 Appendix: Further information Further information on the TIGER Model, including a description of the model and the study on the Nord Stream pipeline, can be found in the papers by Lochner and Bothe (2007), see next slide. The Working Paper can be downloaded from EWI s webpage: 13

14 Appendix: Selected EWI publications Bothe, D.; S. Lochner (2008). Erdgas für Europa: Die ewigas 2008 Prognose. In: Zeitschrift für Energiewirtschaft 32 (2008) No. 1, pp Lochner, S.; D. Bothe (2007). Nord Stream-Gas, quo vadis? Analyse der Ostseepipeline mit dem TIGER- Modell. In: Energiewirtschaftliche Tagesfragen 57 (2007) No. 11, pp Lochner, S.; D. Bothe (2007). From Russia With Gas - An analysis of the Nord Stream pipeline's impact on the European Gas Transmission System with the TIGER-Model. EWI Working Paper 07/2. Bothe, D.; M. Lienert; S. Lochner (2007). Analysing the Sufficiency of European Gas Infrastructure - the TIGER Model. Conference Paper presented at ENERDAY 2007, Dresden. Bothe, D.; A. Seeliger (2006). Erdgas sichere Zukunftsenergie oder knappe Ressource? EWI Working Paper 06/2. Seeliger, A. (2006). Entwicklung des weltweiten Erdgasangebots bis Eine modellgestützte Prognose. Schriften des Energiewirtschaftlichen Instituts, Band 61, München. Bothe, D.; A. Seeliger (2005). Forecasting European gas supply - selected results from EUGAS model and historical verification. EWI Working Paper 05/1. Bartels, M; A. Seeliger (2005). Interdependenzen zwischen Elektrizitätserzeugung und Erdgasversorgung unter Berücksichtigung eines europäischen CO2-Zertifikatehandels. In: TU Wien (Hrsg.), Energiesysteme der Zukunft: Herausforderungen und Lösungspfade, Tagungsband der IEWT 2005, Wien. Perner, J.; A. Seeliger (2004). Prospects of gas supplies to the European market until 2030 results from the simulation model EUGAS. In: Utilities Policy 12 (2004) No. 4, pp Seeliger, A. (2004). Die Europäische Erdgasversorgung im Wandel. EWI Working Paper 04/2. Perner, J. (2002). Die langfristige Erdgasversorgung Europas. Schriften des Energiewirtschaftlichen Instituts, Band 60, München. 14