Meeting intraday modulation needs. Supply and demand match in intraday flexibility Outlook study for

Transcription

1 Meeting intraday modulation needs Supply and demand match in intraday flexibility Outlook study for

2 Contents Preface by the Chief strategy & marketing officer Summary Background Outlook analysis Glossary

3 Preface by the Chief strategy & marketing officer The global energy sector is facing some overwhelming challenges: in particular constantly rising energy needs, environmental imperatives, and the management of risks and economic balances. Natural gas has numerous advantages in tackling these challenges. It has abundant reserves with worldwide geographical distribution. France, which lies at the crossroads of the main European gas routes, also benefits from a dynamic wholesale market with a growing number of suppliers. From an environmental perspective, gas is the fossil energy that produces the least CO2 emissions when burned. It contains no sulphur, produces no particles and releases limited quantities of nitrogen oxides. Apart from direct use, we are convinced at GRTgaz that natural gas will continue to develop as a fuel for electricity generation. With the prospect of a shift in the European energy mix, it is an ideal complement to renewable energy sources, in particular wind and photovoltaic plants, which are intermittent by nature. Combined-cycle gas turbine power plants make their full contribution to this trend since they are perfectly geared to respond to the fluctuations in electric power demand, with the additional advantage of being substantially more efficient than other power plants (coal, oil), and therefore require less primary energy to produce electricity. These gas-fired power stations need to be able to modulate their gas consumption widely over the day, in order to adjust to the fluctuating demand from electricity consumers. GRTgaz s natural gas network is capable of providing this essential operating flexibility in order to maintain the balance of the power grid in real time. Nearly non-existent until recently in France, though very common in Europe and around the world, the number of gas-fired power plants has multiplied over the past few years. At GRTgaz, we have responded positively to the influx of these new customers. We have adapted our organisation and products & services offering to follow these trends. But we want to go further. It is the purpose of this study to assess the match between our customers new needs and the availability of intraday flexibility resources over the period Its findings are much more satisfactory than in the previous study, published in The natural gas transmission network is now able to meet nearly all its users intraday modulation needs. After 2017, largely as a result of our investment efforts, our system will not only be able to respond to the growth in the need for intraday modulation, but even go further as the market develops. GRTgaz is anticipating, investing and innovating to provide France with infrastructures that are in keeping with the rapid development of energy systems. 3

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5 Summary In the last few years, new consumers have arrived on GRTgaz s natural gas transmission system, bringing not only substantial consumption demand for which GRTgaz has built the necessary infrastructures, but also significant needs for variations in consumption over the day. These consumers are called highly modulated sites. The gas system, on which GRTgaz is responsible for coordinating intraday flexibility, is already responding satisfactorily to all the needs of these sites. Highly modulated sites thus have access to internal and external sources of intraday flexibility through the specific intraday flexibility service provided by GRTgaz. This service was introduced on April 1, 2011 after the publication of the Energy Regulatory Commission ruling on March 24, At the beginning of 2010, GRTgaz published a first analysis of the balance between the next-day intraday modulation needs of highly modulated sites and available intraday flexibility. Here, we publish an update of that study for the period GRTgaz has established a benchmark scenario that incorporates assumptions agreed with the gas infrastructure operators and shared with the market stakeholders under the Concertation Gaz consultation process. This scenario looks at the equivalent of 22 combined-cycle gas turbine power units installed in 2020 on GRTgaz s network, operating on the basis of hourly profiles supplied to GRTgaz by the electricity producers. The sources of intraday flexibility considered are an internal source usable linepack available on GRTgaz s network - and then external sources provided by other gas infrastructure operators. The results of this study show that across GRTgaz s whole network: n for the period , the gas infrastructures offer excellent capacity to meet the next-day intraday modulation needs of highly modulated sites; n in 2016, this capacity will increase and the need for external sources of intraday flexibility will become marginal, ceasing to be necessary from 2017 to cover the needs expressed by highly modulated sites; n recent decisions on the reinforcement of our main network will create sufficient potential usable linepack as an internal source of intraday flexibility. It is mostly because of these new transmission pipelines that the findings of this outlook analysis are much more optimistic than those of the previous study. In fact, GRTgaz is capable of covering greater future demand than predicted in the study s assumptions, in terms of the frequency or fluctuation amplitude of the modulation need. GRTgaz is also ready to provide intraday flexibility for highly modulated sites that may connect to its network up to

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7 Background A growing need for intraday modulation Intraday modulation of consumption reflects the hourly variation in natural gas consumption over a gas day. Certain customers connected to GRTgaz s network experience both a high level of consumption and sharp variations in consumption over the day, and therefore a significant need for intraday modulation. When such customers require a daily modulated volume in excess of 0.8 GWh/d, they are described as highly modulated sites (HMS). At present, highly modulated sites are centralised gas-fired power generation plants. The first highly modulated sites were connected to the network only a few years ago. Today, their average annual aggregate modulation need is comparable to the need of the conventional market (1), and will undoubtedly become much greater in the near future. In fact, their total modulated volume (TMV) for the summer period 2012 is forecast to be 30 GWh/d, twice the level of the conventional market: Total modulated volume (TMV) in GWh January February March April May TMV HMS Conventional TMV June July August September October November December (1) The so-called conventional market corresponds to residential consumers and to industrial consumers directly connected to the transmission network, which do not meet the criteria characterising highly modulated sites. The need for intraday modulation over a day is characterised by: n the modulated daily volume, which represents a quantity of gas required over the gas day; n the amplitude of hourly operating flow, which represents the gap between the maximum and minimum hourly consumption. The diagram below illustrates this demand for intraday modulation, representing an example of the operating schedule of a highly modulated site on a given day Hourly consumption (MWh/h) Daily modulated volume Hourly consumption Average hourly consumption Operating amplitude Hours 7

8 Background Centralised power generation plants (On September, 1 st 2011) EDF Gennevillliers EDF Montereau TENDER Aire de Brest GDF SUEZ SPEM Montoir ALPIQ 3CB Bayet GDF SUEZ Combigolfe Fos-sur-Mer Transport Storage Interface Point EDF Martigues Montoir-de-Bretagne Elengy Gassco Dunkerque Belgium South Zone Taisnières North Zone Fluxys Obergailbach Oltingue Germany GRTgaz Deutschland Open Grid Europe Transitgas Switzerland Italy GDF SUEZ DK6 Dunkerque EON - LA SNET Hornaing POWEO PRODUCTION Pont-sur-Sambre DIRECT ENERGIE Hambrégie Hambach EON - LA SNET Saint-Avold EDF Blenod POWEO PRODUCTION Toul EON - LA SNET Lucy Storengy Entry and exit points Transport LNG Terminal Interface Point (PITTM) Spain TIGF Fos-sur-Mer Elengy Adjacent operators (transport, storage & LNG terminal) GDF SUEZ Cycofos Fos-sur-Mer Sites in project Sites in service We observe a steady growth in the centralised power generation from natural gas. 12 gas-fired power plants are connected to the transmission network, 8 of them in commercial operation, with installed capacity of 5,3 GWe. Other projects are currently under consideration for possible connection. Centralised power generation, and particularly combined-cycle gas turbine power plants, are on the rise because of their flexible operation and high efficiency. For these purposes, a high level of intraday modulation is required. 8

9 Background GRTgaz s response to these needs GRTgaz operates its network by transporting natural gas for its customers under optimum conditions of safety, reliability and cost. The system it operates is closely interconnected with the other European networks, and with French ground storage facilities and LNG terminals, thereby ensuring the system users access to various supply points and to marketplaces via the gas title transfer points (PEGs). GRTgaz maintains continuity of supply throughout the year to all customers connected to its network. This forms part of its public service mission, termed Legal Public Service Obligations. To provide this service, GRTgaz needs to develop a network of sufficient size to ensure that the required capacity is available and sufficient at any time. GRTgaz is also responsible for the intraday balancing of its network. It has to adjust pressure and flow rates on the network at all times to guarantee a match between gas entering the system and gas consumed by or leaving the system. GRTgaz has therefore adapted by offering an intraday flexibility service for highly modulated sites, establishing a position as the sole integrator and supplier of intraday flexibility. Sources of internal and external intraday flexibility To meet the needs for intraday modulation, GRTgaz draws on two kinds of intraday flexibility sources: n an internal source, owned by GRTgaz: usable linepack present in our gas pipelines; n external sources, i.e. sources made available by other gas infrastructures: natural gas ground storage facilities, LNG regasification terminals and natural gas transmission networks run by adjacent operators. GRTgaz s linepack is by definition well distributed over the transmission network, and is directly managed by GRTgaz s National Dispatching, which means that it can react rapidly to the intraday modulation needs of highly modulated sites. GRTgaz uses this source before external sources, which are subsequently called upon in order to optimise costs. The external sources are described in greater detail later in this study. The intraday flexibility offer for highly modulated sites The flexibility service was set up on April 1, 2011 after two years of consultation between electricity producers, gas suppliers, industrial customers, gas and electricity infrastructure operators, the French Energy Regulatory Commission (CRE), etc. It is covered by a specific contract, called the Intraday Flexibility Contract. Ongoing discussions are underway between the above-mentioned stakeholders within the framework of the Concertation Gaz consultation process, with a focus on improving the performance and operational management of the service and on providing greater transparency for power plant developers regarding GRTgaz s capacity to provide flexibility in the long term. So that GRTgaz can meet the demand for intraday modulation and has the time to adjust the network to bring in or remove gas, highly modulated sites provide day-ahead hourly consumption schedules on a daily basis. The operational conditions of the service both allow the highly modulated sites to carry through their consumption profiles and GRTgaz to maintain the safety and balance of the transmission network. 9

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11 Outlook analysis with the benchmark scenario Introduction The purpose of this study, which follows on from an initial study published in 2010, is to give the market the necessary transparency regarding the capacity of the gas infrastructures to provide intraday flexibility to highly modulated sites over the period The purpose is also to help GRTgaz s existing and future customers to understand the issues. By its nature, this study is based on information provided by other stakeholders in the gas system. This study has an indicative character only. GRTgaz and the operators may under no circumstances be held liable for its contents, in particular with regard to the completion of potential projects. However, GRTgaz was keen for this study to provide as accurate a picture as possible of future developments, in particular with regard to the current context concerning highly modulated sites, known decisions on the completion of infrastructures, and the documents and information provided by third parties. The purpose of the analysis presented in this document is to determine the capacity of the French gas system to meet day-ahead known demand for intraday flexibility in the short-, medium- and long-term market, including existing, planned or potential future highly modulated sites. The handling of the withinday adjusted intraday flexibility needs of these sites does not fall within the scope of this study. The study s scope covers the whole of GRTgaz s H-gas network. As the study applies to dayahead needs, any transfers of flexibility between physical sub-zones on the network required to meet demand, are deemed to have been made at the beginning of the day in question. This means that the network behaves as a single entity in terms of dayahead intraday flexibility. The study sought to establish a statistical match between intraday modulation needs and available flexibility resources, on a monthly basis, over the years 2012 to 2016, and for the year It is based on a central scenario, termed the benchmark scenario, which embodies the hypotheses shared in consultation with the market players, hypotheses that are currently considered as the most probable. Two variants on this benchmark scenario, designed to encompass a full range of possibilities and presenting significant variations in terms of the hypotheses about needs and/or resources, are also considered. 11

12 Outlook analysis with the benchmark scenario The intraday modulation needs of highly modulated sites The assumptions made for the benchmark scenario on the intraday modulation needs of highly modulated sites are based both on hypotheses about the development of the existing fleet over the period , and on hypotheses about the operation of the sites. 1/ Hypotheses about the development of the fleet n Hypotheses retained by GRTgaz concerning the evolution of the number of Combined- Cycle Gas Turbine Power Plants (CCGT), expressed in number of units (1 CCGT unit being equivalent to approximately 440 MWe): Cumulative CCGT units This level of development is based on: the commercial forecasts available to GRTgaz, i.e. the number of existing power plants and of planned power plants that have signed either a connection contract or a design contract with GRTgaz, taking into account the dates when the plants are due to begin commercial operation on the gas network, as known in summer 2011; RTE s provisional report, published in July 2011 for the 2020 timeframe, reflecting the trend in the number of CCGTs and the 2 GWe power shortfall predicted for that date. n Hypotheses retained by GRTgaz concerning the evolution of the number of Gas Turbines (GT), expressed in numbers of units (1 unit being equivalent to approximately 180 MWe), including sites that have already been built and ongoing connection studies: Cumulative GT units n As regards cogeneration (Combined Heat and Power Plants - CHP plants) plants likely to move into market-based operation, i.e. to operate in a similar way to CCGTs, GRTgaz has assumed the equivalent of one CCGT unit from 2012, a rate that will remain stable until This hypothesis is based upon the existing fleet in France, RTE s provisional report published in July 2011, and uncertainties about the development of this fleet. Thus, for the 2020 timeframe, the assumptions defined above lead to a forecast of an equivalent of 22 CCGT units, where one unit corresponds to an electrical output of around 440 MWe, i.e. a daily delivery capacity need on GRTgaz s network of 20 GWh/d and an hourly delivery capacity of 1 GWh/h. 12

13 Outlook analysis with the benchmark scenario 2/ Hypotheses about the operation of the fleet The operation of a power plants is economically viable once the clean spark spread (i.e. the difference between the price of electricity on the one hand, and the cost of natural gas and the cost of the associated CO2 needed to produce that electricity, on the other hand) is positive. The clean spark spread depends on numerous highly volatile and hard-to-predict factors. This means that a site may have significant variations in its load over a single day. The operating assumptions for CCGTs and GTs were provided by existing or potential electricity producers. They simulated, for every day and every hour within the period from January 1, 2007 to December 31, 2010, on the basis of historical market prices for energy and CO2, the operation of their existing sites or of a standard unit. It is this hourly consumption profile, established over a four-year period, that they passed on to GRTgaz. For the CHP plants, it was assumed that those that moved into market-based operation would operate according to the standard average CCGT profile for the year under study. For each year considered, the total modulation need of the fleet was obtained by selecting the sites in operation in the year in question, and by applying to each one the standard operating profile provided by the producers. The aggregate hourly profile of all the sites was then used to determine the daily modulated volume to be covered. The average monthly modulated volume need (in GWh) of the fleet for a gas day over the period is summarised below: Modulated volume in GWh Average monthly modulated volumes of highly modulated sites (working days) January February March April May June July August September October November December An analysis of the data provided shows that: n the modulation need of the sites increases over the years, reaching its maximum in 2020 at an annual average of around 45 GWh; n it varies substantially from month to month, reaching a maximum in June (e.g. 60 GWh in 2020). Moreover, it is also apparent that the need differs markedly between working days and Sundays/public holidays within a single week: on working days, it is on average twice as large. The needs analysis will therefore focus on working days. 13

14 Outlook analysis with the benchmark scenario The sources of intraday flexibility Intraday flexibility on the gas system can be provided by pipelines (own networks or adjacent infrastructure networks), LNG terminals or ground storage facilities. The intraday flexibility resources identified in the benchmark scenario are: n GRTgaz s internal resources from the potential usable linepack available in its existing or future pipeline network; n the external resources currently contracted for, since April 1, 2011, with the operators Elengy (Fos Tonkin LNG terminal) and Storengy (ground storage facilities) in its benchmark scenario; n potential external resources for which capacity has been studied from a technical perspective (STMFC for the Fos Cavaou LNG terminal and the transmission system operator TIGF); discussions are currently underway on contracting for access to these sources. Other resources the Dunkerque LNG terminal, the Manosque ground storage site or resources from other foreign infrastructures are also possibilities but are not included in this study in the absence of concrete technical data. In addition, the work begun in June 2011 within the dedicated consultation working group on generating competition between intraday flexibility sources, provides an opportunity to explore the possibilities for additional resources, their technical feasibility, their likely availability date and their associated price. 1/ Intraday flexibility provided by GRTgaz s network or linepack The linepack available to meet customers modulation needs varies from one day to the next. It greatly depends on the level of gas consumption and total flow in the network, as well as the distribution of gas entry/exit flows. To assess potential linepack resources, simulations were carried out on GRTgaz s historical system (i.e. excluding new pipeline developments) covering a wide range of consumption levels; for each level of consumption, different assumptions were made about the distribution of gas entry/exit flows. For each of these scenarios, possible extremes of operating pressure were established (maximum operating pressure and minimum operating pressure, within pressure constraints of the system). The difference between these two pressure loads establishes the maximum available usable linepack (see inset). This linepack is first used by GRTgaz to maintain a reliable service to its customers and to cover the modulation needs of the conventional market. Once these two requirements have been met, the usable linepack available can be used to meet additional demand for intraday modulation. For 2011, this usable linepack generally stands at 110 GWh in summer, 65 GWh between seasons (spring, autumn); in winter, it is closer to zero, especially when daily consumption exceeds 2,000 GWh/d. The assumptions regarding flexibility resources are covered in detail below: linepack, ground storage facilities, LNG terminals, adjacent TSO. 14

15 Outlook analysis with the benchmark scenario Maximum available usable linepack The linepack that can be used in a transmission network pipeline depends on different factors: the dimensions of the pipeline, the maximum pressure at which the pipeline can operate (MOP in figures below), the minimum pressure constraints required to ensure continuity of supply (Pc) and the flow passing through the pipeline (Q). A certain quantity of the total gas present in a pipeline is required to ensure continuity of transmission (to maintain the minimum pressure required to meet pressure constraints), a further quantity to compensate for pressure losses associated with gas flow. It should be noted that the higher the flow is, the greater the pressure loss along the pipeline is and the smaller the potential usable linepack in the pipeline is. In practice, the maximum available usable linepack is the surplus gas between a minimum pressure level (P1) upstream of the pipeline, sufficient to maintain pressure constraints (Pc) downstream of the pipeline, and a maximum level starting from the Maximum Operating Pressure (MOP) and attaining a level P2. In the rest of this study, linepack is assessed in GWh for a given day. Usable linepack MOP P (bar) Q << Qmax P2 Linepack required for gas flow P1 Usable Linepack Linepack required for continuity of supply PC L (km) Usable linepack at high flow rate MOP P (bar) (Q<) Q < Qmax Linepack required for gas flow Usable P 1 Linepack P 2 Linepack required for continuity of supply PC L (km) 15

16 Outlook analysis with the benchmark scenario In addition, GRTgaz is investing to develop capacity on its network. These new infrastructures create further transmission capacity which, depending on consumption and the supply schemes chosen by shippers, can also generate usable linepack. GRTgaz s objective is to optimise the potential linepack on these new pipelines by installing appropriate control devices (such as regulator valves) in all its projects. In concrete terms, three major projects will contribute to increasing GRTgaz s flexibility resources to a significant extent: Hauts de France 2 (several staged phases between 2013 and 2016), Arc de Dierrey, in 2016 and Eridan in 2017 (see map below). These projects will create 150 GWh of potential additional internal flexibility by the year For the purposes of the study, a first step is to assess whether the modulation needs of highly modulated sites can be covered by usable linepack. If the total modulated volume (in GWh) corresponding to the schedules of Highly modulated sites is greater than GRTgaz s internal resources, then the capacity available from other infrastructure operators is assessed. The residual need is then converted into an amplitude, expressed in GWh/h, insofar as the flexibility provided by the other infrastructure operators results in a capacity to vary their output rate in the course of a day. Map of new GRTgaz pipelines Hauts de France II I: 2013 II: 2014 III: 2016 Dunkerque Pitgam Belgium Taisnières Germany Cuvilly Arc de Dierrey 2016 Obergailbach Dierrey Montoir Voisines Oltingue Switzerland Etrez Chazelles Eridan 2017 St-Avit Italy Spain 16

17 Outlook analysis with the benchmark scenario 2/ External intraday flexibility Intraday flexibility provided by Storengy The intraday flexibility provided by Storengy s storage facilities (1) entails varying the hourly quantities injected into (or withdrawn from) the storage sites in the course of a day, without affecting the daily schedule requested by storage customers. For a given day, this source of flexibility is interruptible: it is available after the capacity has been used by the storage customers. Storengy conducted a new, feedback-based study in the summer of 2011 to estimate the residual storage capacity likely to be made available to GRTgaz. The analysis was carried out on the period from April 2010 to March 2011, a period deemed to be most representative of storage site performance. In order to determine the available potential for upwards and downwards variation, Storengy calculated the difference between each storage site s recommended technical capacity and actual hourly schedules. Storengy provided GRTgaz with these results, aggregated for each storage type (aquifer, salt cavern). On average, for all aquifer and salt cavern storage facilities, the total amplitude is estimated at 15 GWh/h. Intraday flexibility provided by LNG terminals The flexibility available from the Fos Tonkin terminal is provided by Elengy under a contract in place since April 1, It is interruptible and the available technical capacity is known on a next-day basis. In fact, the possibilities of upward or downward variation in flow depend on the LNG terminal s output level and the number of pumps in operation. The period analysed for the terminal s output runs from November 1, 2010 to September 30, This period is considered the most representative because it includes the entry into service in nominal operating conditions of the Fos Cavaou LNG terminal, which directly impacts Fos Tonkin s output. This flexibility resource was assessed from 2012 to 2014 inclusive, but not beyond 2014, because of uncertainties about the future of the LNG terminal and the availability of this service beyond that date. On average, it is about 1.5 GWh/h. GRTgaz also questioned STMFC about the likely capacity of the Fos Cavaou LNG terminal to vary its output in the course of a day. The operator therefore conducted a number of tests over the summer of 2011, which confirmed that the terminal possesses a potential for flexibility, depending on its level of operation and the number of pumps in operation, and whether or not LNG tankers are currently unloading. A series of hypotheses could therefore be made, on the basis of data supplied by STMFC, and also based on the period from November 1, 2010 to September 30, Fos Cavaou s intraday flexibility service is deemed to be technically available from 2012 until On average, it stands around 3.5 GWh/h. (1) The Manosque storage facility, owned by the firm Géométhane, is not included within this scope. 17

18 Outlook analysis with the benchmark scenario Intraday flexibility provided by other networks At GRTgaz s request, during the first 2009 analysis, TIGF studied the flexibility that could be made available at Cruzy interconnection point. In that study, TIGF indicated that the intraday flexibility available on its network was provided by storage facilities and not by linepack. Indeed, the design of the network is such that the pipelines are operated at close to maximum operating pressure, which leaves very little possibility of varying the pressure to make usable linepack available. over the period , a period during which TIGF knows that no highly modulated sites will be commissioned on its network. This flexibility is about 1.5 GWh/h on average, subject to a minimum hourly flow rate being maintained at Cruzy in winter. For this study update, TIGF looked at the flexibility that could be made available to GRTgaz on the basis of capacity available in storage facilities, and of the possibility of transferring this storage flexibility to Cruzy. In practice, TIGF is capable of providing flexibility Future developments in intraday modulation needs and available flexibility sources Taking the year 2011 as the baseline, intraday modulation needs and the sources of intraday flexibility over the period evolve as follows: Development of needs/sources over the period of the study CCGT GT Modulation needs Flexibility sources Internal flexibility (Linepack) External flexibility CHP

19 Outlook analysis with the benchmark scenario Findings 1/ Summary of findings The table below shows, for each year, the level to which intraday modulation needs for highly modulated sites are covered on working days, and the number of days for which these needs are not fully covered. On days when intraday modulation needs are partially covered, highly modulated sites will have to operate on a modified schedule. The impact on the planned schedule consists in reducing the modulation amplitude for that day. Year Frequency of total coverage of modulation needs Frequency of partial coverage of modulation needs Potential impact on the modulation amplitude Comments % <1 day per year 14% Potential stress in June % <1 day per year 10% Potential stress in March and in June % <1 day per year 13% Potential stress in June % <1 day per year 16% End of contribution from TIGF and Fos Tonkin: potential stresses in winter and in June % - - Marginal use of external flexibility % - - Internal flexibility statistically covers all needs The results of the study show that the gas infrastructures have excellent capacity to meet the intraday modulation needs of highly modulated sites, with a level of coverage of needs statistically in excess of 99.7% in all the years considered. In real terms, GRTgaz may have to ask highly modulated sites to modify their schedules on less than 1 day per year over the period , and should be able to cover all needs from In 2015, slight stresses may also occur in winter, a time of high gas consumption when useable linepack becomes less available. Until 2015, external resources will be a major source of flexibility to cover the intraday modulation needs of highly modulated sites, especially in winter when they could be predominant. In contrast, the use of external sources of intraday flexibility becomes marginal in 2016, and ceases to be necessary from 2017 onwards. Low levels of stress could arise in the month of June in the years 2012 to 2015: this is explained by high demand for modulation by the highly modulated sites, and by engineering works on storage facilities and the transmission network, which will result in temporary reductions in the flexibility available from these infrastructures. 19

20 Outlook analysis with the benchmark scenario 2/ Close-up on the years 2012 and 2015 The more detailed findings are presented below for the year 2012, corresponding to the near future, and for 2015, when total coverage of needs is slightly lower and achieves a level of 99.7%. Coverage of modulation needs for the year benchmark scenario Frequency of full coverage modulation requirements of highly modulated sites Month Work. Day January % February % March 99.90% April % May 99.90% June 99.40% July % August 99.90% September % October 99.80% November % December % Total 99.90% In case of partial coverage (<1 day/year), average amplitude reduction of 14% January February Contribution from flexibility sources (in GWh/h) March April Contribution from internal flexibility May June July August September October November December Contribution from external flexibility The month-by-month analysis confirms that all needs are broadly covered. In 2012, linepack very largely contributes to meeting intraday modulation needs over the summer (in the region of 85%) and between seasons (in the region of 70%). This contribution is smaller in winter (some 20%), a time when flow rates are at the highest on the network and external flexibility sources are heavily drawn on. Coverage of modulation needs for the year benchmark scenario Frequency of full coverage modulation requirements of highly modulated sites Month Work. Day January 99.60% February 99.90% March 99.80% April % May % June 99.10% July % August 99.90% September % October 99.60% November 99.40% December 99.70% Total 99.70% In case of partial coverage (<1 day/year), average amplitude reduction of 16% January February Contribution from flexibility sources (in GWh/h) March April May June July August September October November December Contribution from internal flexibility Contribution from external flexibility 20

21 Outlook analysis with the benchmark scenario The frequency of coverage of highly modulated sites needs remains high, although two sources of external flexibility the Fos Tonkin LNG terminal and TIGF are no longer taken into account, and two additional highly modulated sites are present on the network. Coverage of needs remains excellent, since the risk of any impact on schedules is statistically limited to 1 day per year. In 2015, linepack makes a predominant contribution over the summer (some 95%) and between seasons (some 86%). Its contribution is lower (some 40%) in winter, because of high rates of flow on the network, in which case external flexibility sources will be used to meet the intraday modulation needs of highly modulated sites. The actual impact on the operation of highly modulated sites on that day when needs are not fully covered would be a requirement to operate a modified schedule: n either to operate with a slightly reduced hourly amplitude (some 16% on average) at equal consumption on the day in question, as shown in figure 1; n or to operate with a slightly reduced hourly amplitude (some 16% on average) by reducing consumption on the day in question, as shown in figure 2; n or to operate with constant hourly consumption over the day. Figure 1: Modification of hourly amplitude (at equal consumption) Figure 2: Modification of hourly amplitude (with reduced consumption) am 7 am 8 am 9 am 10 am 11 am 12 am 1 pm 2 pm 3 pm 4 pm 5 pm 6 pm 7 pm 8 pm 9 pm 10 pm 11 pm Midnight 1 am 2 am 3 am 4 am Schedule Modified schedule Average 5 am 0 3 am 5 am 7 am 9 am 11 am 1 pm 3 pm 5 pm Schedule Modified schedule Average 7 pm 9 pm 11 pm 1 am 3 am 5 am 21

22 Outlook analysis with the benchmark scenario 3/ Findings for the post-2016 period From 2016 onwards, the modulation needs of highly modulated sites are fully covered. In addition, coverage is statistically provided almost entirely from usable linepack - GRTgaz s internal intraday flexibility resource - since the major pipeline infrastructures Hauts de France II (final stage) and Arc de Dierrey (2016) then Eridan (2017) come into service. The findings show that the infrastructures could provide intraday flexibility for even a greater number of sites, provided that there is sufficient transmission capacity available to support the significant rise in gas consumption. 4/ Comparison with the previous study The findings presented above show a very clear improvement in the coverage of the intraday modulation needs of highly modulated sites in comparison with the findings of the study published in The main conclusions of the previous study predicted a partial coverage of the needs of highly modulated sites in October and November 2012, over 10 to 15% of the sites operating days, and a gradually diminishing frequency of the total coverage of modulation needs. That study also concluded that, subject to the implementation of certain investments on the transmission network, modulation needs were likely to be fully covered for the years In fact, one of the factors explaining this clear improvement is the decision to build new pipelines Hauts de France 2 and Arc de Dierrey which were not included in the previous study. For its part, the construction of the Eridan pipeline had already been taken into account for the year Other hypotheses in the study have also changed significantly: n in terms of modulation needs, the producers modulation forecasts are on average less substantial; n with regard to intraday flexibility sources, the change in the operating conditions of storage facilities and a more refined (hour by hour) analysis of their operating performance, has resulted in a significantly higher assessment of their potential level of flexibility than in the study published in 2010; n the flexibility of the LNG terminals has also been revised: flexibility at Montoir is ruled out, but flexibility at Fos Cavaou has been included following trials to quantify what it is technically possible to do. Conclusion Over the period , the French gas infrastructures provide excellent capacity to meet the day-ahead intraday modulation needs of highly modulated sites, a capacity that increases substantially from 2016 onwards. In terms of the provision of day-ahead intraday flexibility, they are even able to accommodate a substantially greater number of sites than are considered in this study (i.e. the equivalent of 22 CCGT units by 2020). 22

23 Outlook analysis with the variant scenarios Outlook analysis with the variant scenarios Introduction Alongside the benchmark scenario, GRTgaz worked on the definition and exploration of additional scenarios in order to cover the full range of possibilities. A first, less constrained Low modulation demand scenario, in which combined-cycle gas turbine power plants develop more slowly than in the benchmark scenario, and in which the flexibility available from Storengy s storage facilities is greater than in the benchmark scenario. A second, constrained High modulation demand scenario, which explores a very high level of intraday flexibility need of the highly modulated sites, and in which the other assumptions are equivalent to those applied in the benchmark scenario. The main assumptions used in these scenarios are summarised in the table below: Scenario Modulation needs Flexibility source Modulation Number of CCGT units Storage facilities Benchmark Producer data GRTgaz benchmark - 19 in 2020 Average scenario Low modulation demand Producer data RTE benchmark - 14 in 2020 Optimistic scenario High modulation demand Max. amplitude, over 16 hours GRTgaz benchmark - 19 in 2020 Average scenario Low modulation demand scenario Hypotheses The development of CCGT plants is assumed to remain at 13 units beyond 2013, rising to 14 units in 2020, which corresponds to all the projects in place or under construction, with the addition of the Brest facility project. The operating assumptions are those provided by the producers, and therefore the same as in the benchmark scenario. In terms of external flexibility resources, high availability is assumed for the flexibility provided by Storengy (so-called optimistic assumptions, which reflect the maximum technical performance of each storage site). The other resources (TIGF, Fos Tonkin or Fos Cavaou LNG terminals) are the same as in the benchmark scenario. Findings Under this scenario, all the intraday modulation needs of highly modulated sites are covered for all the years simulated. In addition, from 2016, GRTgaz s internal flexibility is statistically capable of meeting all needs. 23

24 Outlook analysis with the variant scenarios High modulation demand scenario Hypotheses In the benchmark scenario, the modulation considered for the sites is based on hypotheses provided by the sites. In the high modulation demand scenario, GRTgaz has considered much constrained conditions, already explored in the study published in 2010, i.e. a socalled 16 hours forced modulation, with a maximum amplitude variation: in this case, all the highly modulated sites are envisaged as operating at full load for 16 hours, and being off operation for the remaining hours. This profile was applied every day of the year, on both working and nonworking days. This picture of the operation of the sites places the benchmark scenario under genuine stress, since it doubles the modulation needs vs. the producers forecasts, as shown hereafter. In terms of the development of the fleet, the assumptions in the benchmark scenario have been retained, i.e. 19 CCGT units by 2020, 5 GT units, and 1 equivalent unit for CHP plants by Modulated volume - «high modulation demand» scenario Modulated volumen in GWh Aggregated schedule - Assumption for producers Working Days Modulation at maximum amplitude over a 16-hour period Finally, the same data for flexibility sources are used as in the benchmark scenario. Findings 1/ Summary Year Frequency of total coverage of modulation needs Frequency of partial coverage of modulation needs Potential impact on modulation amplitude Comments % 2-3 days/year 12% Potential stress in March, June and August % 2-3 days/year 13% Potential stress in winter and in June % 3-4 days/year 11% Potential stress in winter and in June % 9-10 days/year 13% End of contribution from TIGF and Fos Tonkin: potential stresses all year long % - - Use of external flexibility in winter only % - - Internal flexibility statistically covers all needs 24

25 Outlook analysis with the variant scenarios 2/ Period The needs of the highly modulated sites continue to be covered to a very high level: in the region of 99% for the years 2012 to 2014, falling to 97% in 2015, which in practice represents a requirement on highly modulated sites to limit the amplitude of their modulation schedule for less than one day per month. 3/ Post-2016 period After 2016, coverage of the modulation needs of highly modulated sites is statistically total. In 2016, covering this demand still requires substantial use of external sources of flexibility, but from 2017 onwards it is met from GRTgaz s usable linepack. The increased stress in 2015 reflects the same factors as in the benchmark scenario: fewer external sources of flexibility and an even more significant rise in demand from highly modulated sites as a result of maximum modulation schedules being applied to the 2 additional units. The results for 2015 presented below show greater stress in the month of March, a period when linepack levels are fairly low and there is less available flexibility in storage facilities following the end of a withdrawal period. The contribution from linepack for 2015 remains high, in the region of 90% in summer and 75% between seasons. It falls substantially (to some 30%) in winter. Coverage of modulation needs for the year «high modulation demand» scenario Frequency of full coverage modulation requirements of high modulated sites 14 Contribution from flexibility sources (in GWh/h) Month January February March April May June July August September October November December Work. Day 94.90% 96.20% 91.60% 99.50% 99.10% 96.30% 99.60% 97.20% 99.90% 97.50% 96.30% 98.00% January February March April May June July August September October November December Total 97.10% In case of partial coverage (9-10 days/year), average amplitude reduction of 13% Contribution from internal flexibility Contribution from external flexibility Conclusion In the low modulation demand scenario, intraday modulation needs are fully covered. Even in the case of the high modulation demand scenario, which considers extremely high intraday modulation needs by the highly modulated sites, these needs are covered to a very high level. 25

26 Glossary Daily modulated volume The variation in the quantity delivered to a highly modulated site in the course of a day. This constitutes the sum, for a given day, of the differences in absolute value between the actual or forecast hourly consumption and the recorded or forecast daily consumption divided by 24, all divided by 2. Daily modulation of natural gas consumption Refers to a customer s need to be able to vary its daily consumption of natural gas in the course of a year. Highly modulated site (HMS) A site is said to be highly modulated when it shows a daily modulated volume in excess of 0.8 GWh/d per operating day. The daily modulated volume is the sum, for all hours in a gas day (from 6 a.m. on day D to 6 a.m. on day D+1), of the differences in absolute value between the recorded hourly consumption and the average daily consumption, divided by two. Flexibility sources Refer to the resources used by GRTgaz to meet intraday modulation needs. These resources may be internal (linepack) or external, where flexibility is obtained from other infrastructures (LNG terminals, storage facilities, other transmission networks). Intraday modulation of natural gas consumption Refers to a customer s need to be able to vary its hourly consumption of natural gas during a gas day. Operating amplitude Difference between maximum hourly consumption and minimum hourly consumption for a given day. Usable linepack A source of intraday flexibility intrinsic to the transmission network, corresponding to a proportion of the natural gas present in the pipelines. For a given day, the availability of this source depends on gas flows, pressure constraints and on which pipelines are in operation on the transmission network. 26

27 GRTgaz may not be held liable for damage of any kind whatsoever, whether direct or indirect, resulting from the use of the data and information contained in this document, and in particular for any operating, financial or commercial loss. This document is the property of GRTgaz. Any communication, reproduction, publication in whole or in part or use is prohibited without the written permission of GRTgaz.

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