Shippers Meeting 2019

Transcription

1 Shippers Meeting 2019

2 Agenda 09:30 COMMERCIAL NEWS Introduction by Pierre Cotin 12:00 European regulation process overview Upstream offer ATRT7 propositions Downstream offer: wrap-up of all changes ahead 2018: gas grid overview ENEA study: strengthening the competitiveness of the French biomethane sector LUNCH 01:45 03:00 04:15 TRF NEWS 2018/2019 Winter feedbacks TRF continuous training Next summer 2019 Evolutions and propositions WORKSHOPS AFTERNOON SNACK & NETWORKING 2

3 European regulation process overview Shippers Meeting - March 14, 2019

4 European regulation: the gas future is being built now ENTSOG works 2019/2020 auction calendar Functionality Platform Tariff Network Code GRTgaz is strongly involved in Paris as well as in Brussels ENTSOG/GIE task force about Guarantees of Origin Clean Energy Package Gas Package 2020: European Commission study status update 4

5 ENTSOG works Functionality platform No Description Outcome Step date I. II. III. Communication protocol encryption Gas role model Fallback solution for failed DA auctions Approval of the issue solution document Board approval Publication of the solution after the board approval Approval of the issue solution document Preparation of the issue solution document Publication of the solution January 2019 End December End December IV. INT NC on IPs 3 rd ACER is preparing a note on this topic listing possible options of the solution Some arguments could be considered as part of the issue solution Beginning 2019 V. Inconsistencies in publication of reserve price information Suggestion: Joint ACER TF and ENTSOG TAR KG meeting in early March tbc March

6 ENTSOG works Tariff Network Code: ACER s monitoring on tariff methodology 6

7 ENTSOG/GIE Task Force Issues under discussion The Guarantees of Origin should: support sector coupling for electricity, heat and cooling be exchangeable/interlinked clarify their conversion for electricity and gas The Guarantees of Origin shall be: tradable cross-border lifetime extended. This is not rational to limit it as gas can be stored. able to replace / be compatible with ETS allowance State members shall use their optional right to put in place Guarantee of Origin for non-renewable low-carbon gas: minimized side-effects increase of traceability by providing as much information as possible Differentiation of Guarantees of Origin: gaseous gas should be exchangeable/equivalent to a GO of LNG mass product approach VS market segmentation approach 7

8 ENTSOG/GIE Task Force Next steps Mid-March Revised note taking into account Prime Movers views and provisional recommendations Early April 2 nd Prime Movers meeting Late April / Early May Open stakeholder workshop Late May Recommendations and propositions for the Forum of Madrid GIE and ENTSOG report back to the 32 nd meeting of the Forum of Madrid on June 5-6,

9 Clean Energy Package State of play An interinstitutional agreement has been reached (December 18 th, 2018) for these texts: ACER Regulation Electricity Directive recast partly transposition into national law by MS required by December 31, 2020, art. 70 previous directive repealed on January 1 st, 2021 (just after transposition) Electricity Regulation recast publication and coming into force estimated in 4 8 months Texts already published in the EU Official Journal (December 21 st, 2018): Directive 2018/2001 on the promotion of the use of renewable energy ( RED II ) Directive 2018/2002 (Energy Efficiency Directive) Regulation 2018/1999 (Energy Governance Regulation) 9

10 The scope of the European Commission 2020 Gas Package 3 main pillars of the package 10

11 The scope of the EC 2020 Gas Package Ongoing and upcoming studies 1. The role of gas infra in 2050 (final) 2. Sector coupling 3. Combined gas and capacity release programs 4. Distortive effects of non harmonized tariffs 5. Licensing and regulatory requirements 6. Tailor made regulation 7. Regulatory framework for LNG 8. Biogas and H2 injection into gas grids 9. Methane leakage prevention strategies 10. Reg. Support to Innovation & SDES Study ENTSOs interlinkage study between electricity and gas scenarios CEER follow up Future Role of gas study (final) MF 2018 follow up tasks: Avoid unintended interactions between the regulated and contestable activities assess potential role of regulated entities Consider potential decommissioning of infrastructure 1. Costs of gas disruption (ongoing) 2. Value of lost load (final) 11

12 The scope of the EC 2020 Gas Package Expected timeline 12

13 Conclusion Gas infrastructures: Guarantee of decarbonised energy system sustainability Positive externalities to be well-addressed by the future regulatory framework Sector coupling: energy systems hybridisation fosters guarantee for final consumers to use a decarbonised energy 13

14 Upstream offer: Highlight in 2018 and news for 2019 Shippers Meeting - March 14, 2019

15 Agenda Dunkirk Oltingue L gas Redistribution of auction premiums 15

16 Dunkirk 16

17 Dunkirk New rules of sale as from June 2018 According to the deliberations of July 27 th, 2017 and March 8 th, independent years from October to October Yearly and quarterly sold one month before auctions on PRISMA Short term capacities sold same as before Creation of quarterly capacity OSP 17

18 Dunkirk New rules of sale as from June 2018 Accessibility Levels: Public: x 18

19 Oltingue 19

20 Oltingue New entry capacities as from June, 1 st 2018 According to the deliberation of July, 27 th 2017: Creation of 100GWh/d firm capacity and 100GWh/d interruptible capacity without developing the network core Firm capacity are sold after selling entry capacity at Virtualys and Obergailbach. Firm is commercialized according to interruptible calendar (except for within day: firm slot) GWh/d Virtualys Obergailbach Oltingue Network core capacity common to the three points Firm capacity GWh/d Backhaul GWh/d Firm 20 GWh/d Interruptible

21 Oltingue Strengthening 30GWh/d interruptible exit capacities GRTgaz has worked jointly with the Swiss operators to optimize operating conditions at Oltingue in order to partially address the supply problems of Switzerland and Italy since the reduction at Wallbach interconnection point. From December, 1 st 2018 to September, 30 th 2019 GWh/d Firm 21 GWh/d Interruptible

22 L gas 22

23 L gas Background This provider is commited to ensure swap service until 2023 Risk of: Demerging of the H&L zone Regressing in terms of supply competition Complex management for GRTgaz Implementation of the contractual H gas to L gas conversion service Contract conclued with a provider covering an H gas to L gas swap service Merge of L gas and H gas balancing zone L zone is gradually converted to H gas between 2018 and

24 L gas New offer starting from April, 1 st 2019 For the security of supply of the L zone until the end of the conversion in According to the deliberation of December, 13 th 2018: Shippers can still supply customers located on L zone but only with H gas. H gas to L gas swap service is the only supply of L gas for all consumption on L zone L gas infrastructures remain opened to all shippers As from April, 1 st 2019, GRTgaz will sell 7.5 GWh/d of day-head backhaul capacity at Taisnières B GWh/d Backhaul 24

25 L gas New offer starting from April, 1 st 2019 Shippers who use L gas infrastructures will have to be balanced daily in L zone. Penalties will apply in case of imbalance in L zone: Balance sheet gap in scope B Threshold Price for Scope B Positive (long) balance sheet gap below the threshold Positive (long) balance sheet gap above the threshold Negative (short) balance sheet gap below the threshold Negative (short) balance sheet gap above the threshold 5 GWh 1 GWh 1/MWh 30/MWh 3.35/MWh 30/MWh 25

26 Redistribution of auction premiums 26

27 Redistribution of auction premiums End of the former mechanism Redistributed amount in : Auction premiums Jul 17 Oct 18 Distribution difference Jul 17 - Sep 18 Rules of redistribution: Prorata of consumption* between October, 1 st 2017 and September, 30 th In the invoice of November 2018 *reduced by quantities excluded under capacity allocation phase at regulated price for gas-intensive site 27

28 Redistribution of auction premiums New rule as from November, 1 st 2018 Redistributed amount in : Auction premiums Nov 18 Sept 19 Rules of redistribution: Prorata of consumption during the same period Once a year in the invoice of November 2019 Unitary amount will be published on the GRTgaz website 28

29 Upstream capacities ATRT7 propositions Shippers Meeting - March 14, 2019

30 ATRT7 context, risks and challenges 30

31 ATRT7 context Long term capacities on entry IP (PIR and PITTM) GWh/j During ATRT7, strong decrease of long term capacity subscriptions on the entry PIR At the end of the ATRT7 period, new optimized subscriptions are expected to cover the market needs France market needs Range depends on: Consumption scenario Transit supply Biomethane production LNG supply Expected subscriptions ATRT

32 ATRT7 risks The slow decrease of long term subscribed capacity level at the North entry PIR should lead to: An increase of spread between market places (in theory limited to the tariff of the capacity between market places) and at the end an increase of the PEG price. A decrease of upstream capacity subscription incomes, thus a potential increase of GRTgaz overall tariff. 32

33 ATRT7 stakes and contemplated offers ATRT7 stakes Contemplated offers Limiting PEG price increase: Limiting spread increase Attracting LNG, the single gas pipe competitor Reshuffling Pooling Modifying short term multipliers DKLNG firm 519GWh/d Limiting incomes reduction: Attracting new subscriptions (LNG, short term at PIR ) Increasing transit incomes Changing additional subscription calculation Increasing PIR Ober backhaul Implicit allocations Delivering more attractive and easier to operate offer TRF simplification PIR DK simplification 33

34 The 3 new offers for the next CRE consultation (March 2019) 34

35 Reshuffling (PIR) Principle Transferring a capacity from one PIR (source point) to another (target point), on a determined period Shippers benefit from reshuffling: taking advantage of lower spreads over the capacity costs valuing unbundled and unused capacities Following the 2 GRTgaz objectives (for target points): Reducing the PEG price The offer only applies to entry points Without losing income opportunities The offer only applies to points, maturities and periods over which there is no subscription potential: Obergailbach and Virtualys Annual, quarterly and monthly Until

36 Reshuffling (PIR) Creating value for the Shipper Revalue unbundled capacity by transferring it to another point in order to take advantage of a spread Creating value for the Consumer Increase liquidity and reduce the PEG price by encouraging shippers to sale gas on the PEG as soon as the spread is effective (but lower than the capacity price) Creating value for GRTgaz No loss of income if the offer is limited to points with a low resubscription potential Revenue: fee of 10% of the reshuffled capacity amount 36

37 LNG advantages and specifities LNG is a key gas to gas competitors and leads to PEG price reduction LNG offers some advantages for the network, to all market stakeholders: Compressor energy saving Reduce congestion risks Ease storages filling in summer But LNG is hard to attract as: It is arbitrated between worldwide market places It is subjected to strong supply contingency (shipping conditions, production, etc.) GRTgaz wishes to deliver a more flexible PITTM offer to increase Offer value Subscription opportunities 37

38 Pooling (PITTM) Within-month transfer of unused capacity from a PITTM to another one Allows shippers to take advantage of the 3 French coastlines Allows France to better compete versus other LNG markets PITTM offer is consistent with Elengy offer where pooling exists (and also compatible with DKLNG) Service fee = 10% of PITTM tariff Risk of loss of subscription at full tariff is low compare to potential benefits Only applicable on withinmonth PITTM offer is more flexible, thus more valuable: potential for additional subscriptions More LNG flowing in = less congestions and less fuel gas costs 38

39 Change of additional subscriptions calculation As for today, shippers bear the risk of paying additional capacity at PITTM beyond their control Notice of subscriptions versus uncertainty on actual ship arrivals Non optimal profile of subscription ( 10+X rule) Send-out profile at the hand of regulated terminal operators Calculating additional capacity on a day-by-day basis Thus uncertainty on actual send-out costs can dissuade potential subscriptions Offers: An ex ante flat subscription An ex post additional capacity calculation, as the difference between total send-out and total initial subscribed volume 39

40 CRE ATRT7 timeline 40

41 CRE ATRT7 agenda 2019 January February March April May June July August September October November December Public consultation tariff framework Public consultation tariff structure for gas infrastructures (transport, distribution, storage) Public consultation ATRT7 tariff ATRT7 deliberation We need your support to convince the CRE about the interest of our offer s evolutions! 41

42 Downstream offer: Wrap-up of all changes ahead Shippers Meeting - March 14, 2019

43 Summary 1/ Changes in Daily capacity lead-times - Communicating the subscribed downstream capacity to the final customer 2/ Evolutions proposed in ATRT7 : - Penalty calculation - Winter monthly factors Those changes and proposed evolutions are motivated by : - the ambition to simplify our offer - the need the increase subscriptions (or lessen subscription tariff erosion) for a stabilizing effect on the tariff. 3/ Storage compensation : feedback and regulator s announcement 4/ Unpaid interruptibility product 43

44 1/ Changes in 2019 Easing capacity subscription - To give its clients more time to book, we shift the daily downstream tariff capacity lead-time from 3 pm D-1 to 8 pm D-1. As of April 1 st 2019 (first affected delivery day will be April 2 nd ) tariff - We are also studying the possibility to shift even more the deadline for daily capacity subscription : a new booking window during the delivery day is under study. As soon as possible (end of 2019)? - To ease communication with your clients, we will ask all shippers supplying final customers via , on a yearly basis, if they allow us to disclose the subscribed capacity to their client. For operational reasons, we won t be able to manage answers that are not the same for all clients of your portfolio, for the whole year («all or nothing») As soon as possible 44

45 2/ Evolutions proposed in ATRT7 Penalties and monthly factors tariff Penalties : - We propose to end the yearly direct redistribution of the penalties for exceeding capacity on the downstream network. These amounts would be given back to the market through a decrease of the capacity tariff. - We propose to harmonize the penalty calculation on all three terms of the downstream capacity : no more distinct formula for the Main Network Exit term. - We propose to remove the second tranche for penalty calculation. tariff Monthly factors : Example for Daily - We propose to decrease the monthly capacity factors in January and February from 8 to 4. 45

46 3/ Storage Compensation Current principles on the distribution network Since April 1 st 2018 : -1 The CRE establishes a regulated revenue each year for the storage operators -2 Storage operators sell their capacity through auctions -3 The missing amount between regulated revenue and auctions revenue is perceived through the means of the Storage Compensation, via the transmission agreement (currently only for clients connected to the Distribution Networks) Amounts in 2018 (MEUR) Storage compensation is paid by shippers proportionally to the modulation of their customers, being is the difference between their maximum capacity and their average consumption. An exemption is made for counter-modulated customers (Summer consumption > Winter consumption), and customers they have declared they can be selectively cut without risks in case of emergency («délestables sans risques») Capacity Consumption Storage Compensation basis Average consumption 46

47 3/ Storage compensation Feedback on the first year GRTgaz collects the compensation term on a monthly basis. Each shipper who has unexempted customers on the distribution networks during a month M (circa 30 shippers) receives from GRTgaz before the 20th of M+1 three different invoices related to the 3 storage operators. For the delivery period April-December 2018, this represents roughly 480 M excluding VAT For GRTgaz it is a difficult process based on heterogeneous data sources from the distribution operators : - GRTgaz is not yet in a position to make corrective invoices in case of retroactive data information far in the past - GRTgaz calls distribution operators for more accuracy and homogeneity in their data transmission, and encourages shippers to also pay cautious attention to data from the distribution operators, so that more reliability is achieved for all parties. 47

48 3/ Storage Compensation Regulator s announcement During the last Downstream Offer concertation, the CRE has announced that they consider to extend the storage compensation collection* to customers connected to the transportation network, as of April 1 st In addition, in the event that DGEC has not published the decree on interruptibility, the CRE has asked GRTgaz to work on a similar product. * In case the extension of collection is confirmed, the amount for 2020 would then be split between distribution and transport customers 48

49 4/ Unpaid interruptibility product Contract as close as possible to secondary interruptibility in the works of the DGEC Unpaid product Contract directly signed with the final consumer Open to any consumer offering a «capacity*» greater than 40 MWh/d The «capacity» will not be used in the calculation of the storage compensation A similar proposal on the distribution network * Not in the meaning of the transmission agreement 49

50 2018: gas grid overview Shippers Meeting - March 14, 2019

51 5% decrease of natural gas consumption Industry except CCGT+CT* CCGT+ CT 35 TWh -35% 137 TWh +2% Public supply 270 TWh -2% 2018: 442 TWh 2017: 465 TWh Gross gas consumption in 2018 GRTgaz zone *Combined cycle gas turbines + combustion turbines Reduction of gas consumption due to milder temperatures and to a lower demand for power generation; Growth of the industrial consumption for the 5th consecutive year (+4,4% between 2014 and 2018) Stability of the climate-adjusted low pressure distribution consumptions (277 TWh). 51

52 Gas: a flexible resource for power generation Gas consumption of CCGT+CT 8 TWh 21 TWh 46 TWh 55 TWh 35 TWh Plants in operation on January 1st, 2018 Planned plants Groups by site Decrease of CCGTs consumption due to better availability of nuclear, hydraulic and wind power power generations, as well as to milder temperatures in However, the utilization rate of gas-fired power plants is important, due to their high flexibility. 52

53 News gas conversions in the industry Near 2.5 TWh of gas consumption related to new substitutions from oil and coal to gas carried out in 2018 for industrial customers. Substitutions carried out since 2012 have allowed to reduce the annual emission by 2.2 Mt of CO 2 in Some examples of conversions carried out in 2018 Glass sector: Saverglass in Feuquières (Oise) switch from oil heating equipments to natural gas equipments. The Feuquières glass factory (established in 1897) is one of the three Saverglass production sites based in France (out of 5 in the world) and it is an expert in luxury bottle manufacturing and decorating. Chemistry: NAPHTACHIMIE in Martigues (Bouches-du-Rhône) conversion of fuel boilers to natural gas-fired boilers. Established in 1945, the NAPHTACHIMIE group is a subsidiary equally owned by Total Raffinage Chimie and INEOS. Sugar: Cristal Union in Villers-Faucon (Somme) conversion of the fuel refinery to natural gas. Cristal Union is an agro-industrial cooperative group, among the first European producers of sugar and alcohol. It is mainly located in France. 53

54 Creation of the TRF (Trading Region France) on November 1 st, 2018 A more attractive market: an 8% increase in the number of shippers in 2 months A single price reference system: Southern France industrial consumers (almost 50 TWh) got a price reduction of about 1.4 to 1.9 /MWh, representing an gain of nearly 80 million yearly. Strengthening of the security of supply: +42% of gas transmission capacities between the North and the South. 54

55 Growth of LNG entries -6 TWh -3% +2 TWh +25% TWh -12% +20 TWh +24 % TWh +45 % TWh +22 % 447 TWh : slight decrease in gas pipeline entries in the North of France. 117 TWh : 7 year high for LNG entries Interconnections with LNG terminals Interconnections with adjacent networks -12 TWh -27% 2018 gas flows VS 2017 Source : smartgrtgaz TWh +0 % 33 TWh toward Switzerland/Italy: 6 year record transit 31 TWh toward Spain: decrease in the annual transit (but strong increase since TRF creation on Nov 1 st 2018: + 50%) of the TRF on 1/11/2018: + 50%) 55

56 1 nov. 1 déc. 1 janv. 1 févr. 1 mars 1 avr. 1 mai 1 juin 1 juil. 1 août 1 sept. 1 oct. TWh of contractual stock Efficient storage regulation Stock level whole France Injection campaign Rate of injection (GWh/j) % moyenne average / / /2018 Dynamic fill-in campaign due to the Dec storage regulation reform. 56

57 Biomethane: a real take-off Biomethane injection sites connected to the gas grid 714 GWh injected in 2018 in France (+75%). 76 sites in operation, 64% are agricultural projects. 1.2 TWh of installed capacity at Dec. 31 st Nearly 14 TWh in the capacity register (+ 6 TWh compared to 2017). 57

58 but contradictory signals for the future Major breakthroughs in 2018 : - Food Law enacted on Nov. 1st : recognition of «a right to inject» ; direct connection to the transmission network possible, with polyethylene pipelines - Anaerobic digestion ministerial workshop on Jan. 14th 2019 : 40% rebate in the transmission network connection cost (up to 400k). Food Law decree promised for April Positive perception by local communities of renewable gas advantages : biomethane is an efficient tool for decarbonation, agricultural policy, circular economy, land-use planning policy. But disappointing outcomes from the Multi Year National Energy Planning («PPE») : volume target reduced from 8 to 6 TWh, 2030 target reduced to 7% of gas consumption - Biomethane buy-back tariffs due to decrease by 30% in 2023 (67 /MWh), by 40% in 2028 (60 /MWh) - Introduction of tenders for yearly 0.7 TWh 58

59 Annexes 59

60 TWh Industry: evolution of gas consumption 2018/2017 2, /2017 gas consumption discrepancy 2,00 1,50 1,00 0,50 0,00-0,50-1,00 60

61 Industry: review of the last five years of consumption Industrial gas consumption except centralized production of electricity

62 Flows from France at the Spanish border A strong increase in flows to Spain, partly due to the creation of the Trading Region France on November 1, Flows regularly beyond firm capacity, but without physical congestion except for 2 days in January

63 Flows from France at the Spanish border Strong increase of the flows A strong increase in flows to Spain, partly due to the creation of the Trading Region France on November 1, Flows regularly beyond firm capacity, but without physical congestion except for 2 days in January

64 Strengthening the competitiveness of the French biomethane sector Renewable gas and ENEA study Shippers Meeting - March 14, 2019

65 A collective study A large group of players involved in this study Board meeting 1 5/04 Board meeting 2 26/04 Board meeting 3 29/05 Board meeting 4 12/07 Board meeting 5 23/08 Board meeting 6 26/09 Board meeting 7 19/10 Debriefs about the technical levers Detailed executive summary in order to approve the framework and hypothesis with the board meeting and the review committee Delivered to Solagro and approved Short meeting outline for large diffusion via the SER and the ATEE Many feedbacks after the diffusion Debriefs about the project financing Debriefs about positive externalities Publication of a public executive summary in November 2018 and a public report in January

66 Study of three types of unit Autonomous agricultural (AA) Territorial agricultural (TA) Territorial industrial (TI) Injection capacity 100 Nm 3 /h (9,180 MWh/year) 200 Nm 3 /h (18,411 MWh/year) 300 Nm 3 /h (27,640 MWh/year) Inputs 21,860 tons 33,500 tons 45,000 tons Mixed inputs Main characteristics Manure: 59%; Slurry: 27%; Straws: 5%; CIVE: 9% Unit with agricultural effluents as main feature; independent on bearings Pool of a few farmers Injection in the gas distribution network Comments about the sample cases selection CIVE: 54%; Slurry: 24%; Food industry waste (except animal by-products) and bio-waste: 11%; Manure: 9% Unit with CIVE as main feature plus slurry, manure, food industry waste and biowaste Pool of many farmers Injection in the gas distribution network CIVE: 47%; Food industry waste and bio-waste: 33%; Manure: 12%; Slurry: 8% Unit focused on the reuse of bio-waste and food industry waste, with a high proportion of CIVE and a limited supply of manure and slurry Injection in the gas transmission network Selection of cases: as each unit of biomethane is specific, these sample cases may not reflect the full diversity of the situations encountered. CIVE : intermediate crop for energy purposes are considered as one of the main bearings for the development of medium term methanisation (ADEME). 66

67 Supporting the sector is more than ever a necessity AA TA TI Without subsidy With subsidy (20% on the CAPEX) LCOE 122 /MWh 105 /MWh 94 /MWh TRI Project 4.9% 3.8% 2.9% DSCR LCOE 107 /MWh 94 /MWh 85 /MWh TRI Project 8.9% 7.7% 6.6% DSCR Financial criteria usually expected by banks TRI Project: between 6 and 8% minimum DSCR: between 1.3 and 1.4 minimum The levelised cost of energy (LCOE) they have been valued over 15 years with a weighted average cost of capital (WACC) of 5 %. 67

68 10 main themes to strengthen the competitiveness of the biomethane sector in France Maximize methanogenic power of inputs Limit inputs costs Maximize production of renewable gas Strengthen standardization and pooling Develop operators formation and optimize maintenance Limit costs of connection and injection skids Benefit from the scale effects related to the size of the units Add value to the units over an extended life span Optimize costs and structure of the financing Limit impact of exogenous factors leading to a potential costs increase 68

69 Expected competitiveness profits in short and medium term Current Short term ( ) Medium term ( ) Current Short term ( ) Medium term ( ) Current Short term ( ) Medium term ( ) Autonomous agricultural Territorial agricultural Territorial industrial For the three cases, a 20% decrease of the costs can be reached by

70 Biomethane is still more expensive than natural gas A discrepancy of 30 to 50 /MWh with the natural gas price in 2030 Comparison of the costs of natural gas and biomethane by 2030 AA biomethane AT biomethane IT biomethane 66 /MWh 82 /MWh 75 /MWh Natural gas 33 /MWh Source: IEA Outlook for Natural Gas 70

71 but a lot of positive externalities remains to be quantified State Greenhouse gas emissions avoided* Pollution of groundwater avoided Job creation Non-monetary additional advantages - -30% of natural gas importation (autonomy and trade balance) - TE dynamics within the territories and the agricultural world - Job creation in rural areas Energy consumers Production of a non-variable energy that can be stored (adaptation costs of the network reduced) Adding value to gas networks (limiting the distribution and transport costs increase) Waste producers (food industry waste, community) Farmers Reducing bio-waste treatment costs Decreasing the use of nitrogenous mineral fertilizers Non-monetary additional advantages - Reducing the use of mineral inputs (phosphorus, potassium, etc.) - CIVE positive impact on the main crop - Biodiversity protection (pollinators) - Diversification of the source of income *monetization in a conservative case with a carbon tutelary value of 100 /tco 2e 71

72 Conclusion Biomethane production costs are expected to decrease in the coming years But the goals defined by the PPE (French energy multiannual programming) seem difficult to reach Implementation of calls for tenders from 2019 Goals of feed-in tariff decrease - 67 /MWh in /MWh in 2028 The positive externalities of methanisation must be economically valued How to give an economic value to the services freely provided by the nature? GRTgaz defends: The implementation of calls for tenders for sufficient-sized projects with a notice The revision of biomethane feed-in tariffs, but at an appropriate pace and in consultation with the biomethane sector 72

73 TRF feedbacks and evolutions Shippers Meeting - March 14, 2019

74 Content 2018/2019 Winter feedbacks TRF commissioning New PEG figures Winter supply and limit situations TRF continuous training Next summer 2019 The maintenance schedule for 2019 New superpoints, managed with Teréga (1/4/2019) Evolutions and propositions for summer 2020 Concertation in May/June 2019 New publication timing 74

75 2018/2019 Winter feedbacks TRF commissioning New PEG figures Winter supply and limit situations 75

76 TRF commissioning The different stakeholders of the project were ready: Infrastructures SI Operational teams (Shippers and TSO) The 1/11 switchover worked well for a high majority of shippers. Nominations / Programmations Balancing / Nominations to the PEG Vigilance outlook And a record of LNG send-out in the first days of November! Thank you all for this collective success!

77 New PEG figures The price and liquidity figures show that the PEG is attractive and competitive 0,1 /MWh PEGN-TTF : 0,00 /MWh* TRS-TTF : 1,68 /MWh* average end-of-day spread between PEG and TTF. PEG price very correlated and close to TTF price. But increase in January and beginning of February (0,4 /MWh). *: from January 2017 to October GWh PEGN (2260 GWh) + TRS (550 GWh) = GWh* traded each day on the PEG, close to the volumes previously traded on the PEG North and TRS combined *: from Novmber 2017 to February * active actors at the PEG on January In addition, 15 new transmission contracts were signed with GRTgaz, bringing the number of shippers to 154 *: active actors on average from January 2017 to October 2018

78 Winter supply More LNG this winter than the other years (507 GWh/d compared to 227 for the 3 last winters ) A continuous and high withdrawal of storages, especially when LNG send-out was low A very high level of outputs at Pirineos during all winter (around 180 GWh/d, even during the Elengy strike) Supply flows downstream of limits /11/ /12/ /01/ /02/2019 Net storage withdrawal (Atlantique, Sud-Est and Lussagnet) LNG send-out (Montoir and Fos) Pirineos exit 78

79 Limit situations Vigilance Outlook : Green Alert Level during almost all the winter No tension on any limit. Excepted on 03/12/2018 on the S1 limit. 79

80 Winter supply and limit situations Focus on 3/12/2018 Initial supply situation : High output in Pirineos Low consumption Low withdrawal of North storages Injection in Lussagnet storages The market were long during the day Rebalance in the afternoon, with an increase of injection in Lussagnet (168 GWh/d) Red Alert on S1 Limit Interruption of interruptible capacity in Pirineos Back to the green 80

81 Monitoring of storage levels TRF mechanisms rely on storage flexibility. Storage levels downstream TRF limits are monitored in order to anticipate possible gas shortage: described in the Winter Outlook weekly study with an outlook on 2 and 4 weeks use of demand forecast on the next 21 days various winter scenarios use of LNG forecast on the next 15 days actual level in storages Weekly publication on grtgaz.com : Green for this winter 81

82 Flow commitment If a potential gas shortage is detected, TSOs launch a call for tenders for a flow commitment service. Flow commitment is sending gas into the grid from selected points according to TSOs need. Low storage level Call for tenders Flow commitment Find the contractual framework of the flow commitment on grtgaz.com in the TRF section And do not hesitate to look at the Find Out More sheet about flow commitment 82

83 TRF continuous training 83

84 The mechanisms are already operational with the vigilance outlook online since November 1 st two tests of the Locational Spread to validate our IT systems one limit reached and managed by interrupting interruptible capacities Shipper and many webinars to exchange with you about these topics. 84

85 but have not yet been used, so we invite you to: A full-scale test to allow you to experience a congestion management situation before a potential triggering event A training quiz, operationally oriented, for large part about the Locational Spread (in your mailbox next week) April 10,

86 «Full-scale test» April 10th in working hours For all signatories of the Locational Spread contract (via the usual operational contacts) No physical impact: NS1 upstream, so no interruption of interruptible capacities Cancellation of PEGAS trades, so no physical renomination expected No RMUT triggered 86

87 Next Summer 2019 The maintenance schedule for 2019 New superpoints, managed with Teréga (1/4/2019) 87

88 Summer capacity restriction indicators GRTgaz goal: reduce over 50% the summer capacity restrictions between 2016 and 2020 Capacity restriction rate published in the February schedule (summer) 2016 Reference 2019 Core Network (ex N>S) 10,3% 6,9% Entry Points 10,0% 3,9% Exit Points 7,6% 3,8% Global capacity weighted indicator 9,4% 4,2% -55% Main works and maintenance improvements leading to this result: Improvements in expertizing of defects with less cutting scheduling Temporary repair Less new investment projects Maintenance works coordination 88

89 Maintenance schedule for 2019 What s new? The CPRTt: The probably available capacity New superpoints: For the works impacting before the N>S link Some of them are co-managed with Teréga (new) Only 2 superpoints will be active on GRTgaz side next summer The publication planning To be consolidated in collaboration with the storage auctions

90 GRTgaz and Teréga co-manage 3 superpoints NS2 downstream and NS3 downstream: These superpoints are divided in 2 sub-superpoints (SSP) with the same restriction rate. These 2 SSP «communicate» with the 2 following tools: COE transfer (per shipper) from one TSO to the another (nominated by the shipper) UIOLI mutualization between GRTgaz and Teréga (transparent for the shippers) NS4 downstream: There is no restricted point for GRTgaz. Fos «bonus» is automatically transferred from GRTgaz to Teréga, by the shipper (transparent for the shipper) 90

91 Optimization of storage injection thanks to Superpoints flexibility Atlantic storage an be filled with this maintenance programme And LNG flows relieve the constraints on Atlantic, allowing more UIOLI Reasonable assumptions relieves all or almost all constraints Very prudent assumptions with no LNG. GRTgaz maintenance delays 100% filling by one month 91

92 LNG send-out outlook The PEG - JKM spread might give a trend of LNG volume that would flow to France (indicative only, prices can evolve quickly, other factors are involved) Qatar Nigeria -0,55-0,72 US (Gulf of Mexico) -1,51 Egypt Algeria Norway -2,00-2,15-2,57 April May June July August September Cargoes from this source are expected to go to Asia rather than France Cargoes from this source are expected to go to France rather than Asia but margin is slim Cargoes from this source are expected to go to France rather than Asia Spread PEG-JKM ( /MWh) Market prices as of 05/03 settlements. Charter rate at 46 kusd/day Market prices anticipate a healthy supply of LNG in Europe at least until August 92

93 Maintenance schedule for 2019: To help you: 2 Webinars Link to watch the rurun and download the simulator A superpoint simulator Shipper Data PITTM Montoir PITS Atlantique PITTM FOS PITS Sud-Est ID IT0002 PSC000CA IT0001/03 PS000SA COS (Exit) 50 COE(Exit) COS (Entry) 20 COE (Entry) Transfert GRTgaz -> Teréga Transfert Teréga -> GRTgaz SSPNS3D COSsp(Exit) 50 max -35 COEsp(Exit) 25 transfer nomination -15 COE with bonus transfer 20 and transfert confirmation -15 Nomination Confirmation

94 Evolutions and propositions for summer

95 Evolutions and propositions for summer 2020 A Concertation meeting will be scheduled in June 2019 Feedback on 2019 summer planning Proposition: new publication timing, better coordinated with the storage auctions Feedback on the first months of works and maintenance Proposition: challenge the use of Locational Spread to reduce the capacities restrictions: Increase the threshold of «low impact works» (> 30GWh/d) Increase the climatic risk (over 10%) A scoop : Merger of PITS North East and PITS North West into one single PITS North for the 1/4/

96 New publication planning A first publication in October, before the first storage auctions and later than the previous years (August), in order to have a more consolidated publication and avoid big changes. An update in December, in case of significant changes An final publication in February, on T@ October Y-1 Storages auctions in November December Y-1 Storages auctions in January & February End of Feb. Y D-60 WD-5 D-1 (3pm) publication of the provisional program If needed, update sent by First Publication on Trans@ctions Restrictions Updates 96

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