Gas transmission Technical and Economic Aspects for TSOs

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1 European Summer School 2015 Economic and Legal Aspects of the Electricity, Gas and Heat Market Gas transmission Technical and Economic Aspects for TSOs Ina Adler (ONTRAS Gastransport GmbH) 1

2 Agenda 1. General overview a) TSO roles and responsibilities b) Regulated Gas Transport 2. Technical Aspects a) Pipelines incl. reverse flow b) Compressor, pressure reduction and pigging stations 3. Economic Aspects a) Capacity management b) Investment requirements and returns 4. Outlook European Summer School

3 242,000 km HP pipelines The European High Pressure Gas Network Source: ENTSOG Annual Report 12,500 MW compression ONTRAS TSOs with 49,540 employees 3

4 General overview TSO Roles and Responsibilities Grid operation and maintenance Network planning, system development Grid control (dispatching) Capacity sales Balancing (in Germany outsourced to GASPOOL and Net Connect Germany) Contracts for network connection/use/coupling Billing and invoicing Transparency and publication (e.g. REMIT) Services National and international cooperation Provision of input to national and European bodies, associations Regulated/partly regulated European Summer School

5 General overview Liberalisation and regulation Use-based cost allocation Network use tariffs and returns Unbundling Nondiscrimination Security of supply TPA GAS TRANSMISSION Defined roles; mandatory cooperation Competition on retail market Biomethan/Hydrogen EU: TYNDP D: NEP Teasing investment Connecting power plants, underground storages, LNG facilities Support for RES European Summer School

6 General overview TSO Partners & Interfaces Pipeline connections with Neighbouring TSO* Storage system operators* LNG system operators Distributions system operators (with connections to end users like households, industries, power stations, and further downstream network operators) Gas fired power plants Big industrial users IT connections to: Network users (for booking/nomination) Balancing agents Regulators (monitoring) *Usually with reverse flow European Summer School

7 General overview Regulated gas transport in Europe European Commission DG ENER Executive body with vast compentences for guidance and decision making European Network of Transmission System Operators for Gas (ENTSOG) Established December 2009 HQ: Brussels, Belgium Objectives Network codes Biannual TYNDP (Ten Year Network Development Plan) National Regulatory Agencies Executive bodies with vast compentences for guidance/decision making (implementation of European Regulation on national level) Agency for the Cooperation of Energy Regulators (ACER) Established March 2011 HQ: Ljubljana, Slovenia Objectives: Development of Framework Guidelines for NCs Monitoring ENTSOG and TSO activities 7

8 Gasmarkt Deutschland European network of transmission system operators for gas: ENTSOG Established 1 Dec 2009 to facilitate and enhance cooperation between TSOs across Europe in order to ensure the development of a pan-european transmission system in line with European Union energy goals. Source: 8

9 General overview ENTSOG ENTSOG's tasks are defined within European Gas Regulation (EC) 715/2009 and aim at promoting the completion of the internal market for gas and stimulate cross-border trade ensuring the efficient management and coordinated operation of the European gas network facilitating the European network's sound technical evolution. Network codes The network codes developed by ENTSOG set out the rules for gas market integration and system operation and development, covering subjects such as capacity allocation, network connection and operational security. Network development plan The TYNDP provides a picture of European gas infrastructure and future developments and includes modelling of the integrated gas network based on a range of development scenarios. It includes a European capacity. Supply Outlooks Annual Summer and Winter Supply Outlooks review projections for gas supply, demand and capacity. Supply Reviews analyze the actual situation over the period in question. Operational tools Going forward, Regulation (EC) 715/2009 envisages the use of common network operation tools to ensure the transparency and coordination of network operations under normal and emergency conditions. These include ENTSOG research plans and an incident classification scale. Source: European Summer School

10 Technical Aspects Pipeline construction 10

11 Technical Aspects Reverse (bi-directional) flow Flexibility in gas flow direction is achieved at existing compressor stations /PRSs modified with additional pipes and valves. Flexibility in gas flow direction is achieved at existing compressor stations /PRSs modified with additional pipes and valves. Once pipelines become bi-directional, market demand will dictate the direction of natural gas flows. Reverse flow is one of the technical pre-requisites to fulfil EU requirements for security of supply. European Summer School Source: SpectraEnergy

12 Technical Aspects Gas Compression Pressure drop between two points in a pipeline depends on a number of factors like initial pressure, pipe length and diameter, pipe roughness etc. and is calculated with a complex formula. European Summer School

13 Technical Aspects Compression principle Natural gas pipeline p p Pressure curve without compression Filter Meter Compressor Compression allows transmission of larger volumes through the same pipeline. l Pressure curve with compression (in HP systems usually about every 200 km) l European Summer School

14 Technical Aspects Compression is a very complex operation with numerous steps (e.g. gas filtering, drying) and auxiliary processes (e.g. noise damping) a costly (highly energy consuming) method for increasing transmission capacities an environmental challenge to TSOs European Summer School

15 Technical Aspects Pressure reduction & metering stations TSO gas transport pipeline Filter Preheater Pressure control Meter Filter: cleaning gas to protect downstream equipment Preheater: increasing gas temparature to mitigate cooling effect during pressure reduction (Joule-Thomson effect) Pressure control: downgrade inlet pressure to the level of the max. outlet pressure (p E > p A ) Meter: Measurement of gas volumes flowing to DSO DSO gas main European Summer School

16 Technical Aspects Pigging Advanced method of pipeline inspection: Inspection pig Cost effective method for pipeline mainteace: Cleaning pig Safe method for pipeline repair: Repair pig European Summer School

17 Technical Aspects Pig trap station European Summer School

18 Technical Aspects Gas storage Dimensions of an underground cavern Atomium Bruxelles European Summer School

19 Economic Aspects Gas business: overview once daily hourly monthly Access to network transport (virtual) (physical) Billing European Summer School

20 Economic Aspects Network access Booking of entry capacites with TSO on basis of network access contract Booking of exit capacities with connected network operator ANB on basis of network access contract Soon: Bundled entry/exit capacities (in particular for interconnection points) Access to virtual trading point by joining balancing zone (agreement) Physical access (gas flow) by nominating/re-nominating booked capacities once European Summer School

21 Economic Aspects Capacity Management Booking platforms offer Easy access to the capacity market Single shipper registration for all participating TSOs A tool for primary (and secondary) trading of capacities A detailed overview on all bookable network points and available transport capacity Auctions for yearly, quarterly, monthly and daily capacities Upcoming challenges (Oct. 2015) Within-day capacities Bundled capacities Largest platform: PRISMA 35 TSOs connected with 400 shippers and 1400 users. European Summer School

22 Economic Aspects Balancing Networks Covered by TSOs or by their agents Dealing with allocation and nomination data incl. bundled nominations Contributing to dispatching time tables (physical grid control) Settlement of balancing accounts of transport customers Compensation energy management (buy or sell) Biogas fee allocation (in Germany) Conversion fees (L/H gas) Virtual trading point Publication of exit network operators Market area IP TSO 2 Local Virtuall trading point TSO 1 regional DSO level Market area Cross-border Interconnection point (IP) European Summer School

23 Technical Aspects Security of supply Gas Coordination Group Achieved: Coordination of measures on European level to enhance security of supply Introduction of an Early Warning System Task Force of European TSOs to prevent / manage supply interruptions Open issues: Agreement on transit priorities Harmonization of definitions for protected customers acc. to EU Reg 994/2010 European Summer School

24 Economic Aspects Network development Energy consumed in form of gas: twice as much as power Energy transported in form of gas: times energy transported in form of power Moving gas is up to 20 times cheaper than moving the same quantity of energy through electricity e.g. space requirements for transmission of 14,000 MW electrical energy versus Undercover gas pipeline DN kv high voltage lines (5 posts) European Summer School

25 Economic Aspects Network development Annual national NDP challenges: Focus not homogeneous e.g.: L to H gas conversion in NW Germany Differing political environments: individual approaches in future energy mix Biannual European TYNDP challenges: Security of Supply (South Stream/Nord Stream? LNG?) Diversification of supply sources Sustainablitiy/Efficiency Special attention: Projects of Common Interest: European Summer School

26 Economic Aspects Regulated returns Revenues are regulated on national levels by either Price cap: Max. price achievable for a specific type of transport leading to a revenue limit on the basis of a reference price (price for a capacity product for firm capacity with a duration of one year) or Revenue cap: principles for revenue reconciliation with the aim of promoting stability of transmission tariffs for network users and financial stability of transmission system operators. Tariff Network Code drafted by ENTSOG aims at allowing each transmission system operator to use only one regulatory account for aggregating the under- and over-recovery of transmission services revenue originating from all entry and exit points. The method for revenue reconciliation is to be determined by the national regulatory authority. European Summer School

27 Outlooks Gas grids and RES So far: TSOs and DSOs transport natural gas from gas field to end users. From now on: Gas infrastructure is becoming an highly valuable and flexible asset in the course of achieving environmental targets EU wide In smart combination with power supplies, gas infrastructure can store excess power from RES. Gas infrastructure takes on more and more biogases (biomethane, hydrogen) used in particular for decentral combined heat and power generation (virtual power plants) Gas infrastructure can quickly provide additional energy in peak load situations for power generation. Gas infratrucure is learning to cope with varying gas qualities resulting from Power-to-Gas and biogas plants. European Summer School

28 Outlooks Power-to-gas Gas infrastructure is ready to transport and store gas produced from RES and is capable of offering flexible energy supply. European Summer School

29 Outlooks Power-to-gas European Summer School

30 Outlooks Tomorrow s Gas Grid European Summer School

31 Thank you for your attention! Ina Adler, MBA Energy policy manager ONTRAS Gastransport GmbH European Summer School