European gas infrastructure operators are preparing for all scenarios in the coming winter, including one “with no Russian gas at all” and supply cuts for consumers, says Torben Brabo.
Torben Brabo is CEO of the gas transmission system operator in Denmark and president of Gas Infrastructure Europe (GIE). He spoke to EURACTIV’s Frédéric Simon in the margins of GIE’s annual conference in Budapest.
- Gas infrastructure operators are preparing for a scenario with no Russian gas at all next winter
- The European Commission’s scenarios to replace Russian gas – with more LNG imports and biomethane – are probably too optimistic, but every bcm counts
- In case of gas shortage, households, schools and hospitals will be prioritised while some industrial consumers will be cut off
- Construction of new LNG infrastructure and key pipeline interconnections are being speeded up to diversify supplies and avoid bottlenecks
- Europe should also not forget about energy efficiency efforts and simply consume less
What’s the gas outlook for next winter? What is the industry doing to ensure gas storages are as full as possible?
What we’re doing for next winter is what we’ve always done. And we usually do it so well that we don’t even think about it.
Now, we are currently in a very severe situation caused by the invasion of Russia into Ukraine. And the biggest uncertainty is whether we will have Russian gas or not next winter.
Are you working on the assumption that there will be no Russian gas at all?
For many years, we have been obliged to look at winter disruption scenarios, notably as part of the supply outlooks performed by ENTSOG. And naturally, over the past weeks, the European Commission has requested infrastructure companies to add a new scenario, which is no Russian gas at all.
Almost half (45%) of all gas consumed in Europe is currently imported from Russia. And not all of it can be replaced in case Russian supplies are stopped. Does this mean European consumers should prepare for rationing?
Gas represents 25% of Europe’s overall energy consumption. So, the 45% of gas coming from Russia is probably even worse because it’s approximately 10% of all energy in Europe. And of course, it’s not evenly spread, so there are countries and regions that will be affected much more than others.
My main conclusion from the recent GIE annual conference is that the maths provided by the European Commission’s REPowerEU plan probably isn’t fully correct. If you look at the Russian supply numbers, the LNG supply numbers, the biomethane projections – they are all quite optimistic.
This means we probably cannot buy as much LNG as currently envisaged in REPowerEU. And so forth.
Are you saying the Commission’s gas diversification scenarios are based on wrong estimates?
Let’s say these should probably be considered more as a target – something we should be aiming for.
If you listen carefully to the people from the LNG infrastructure sector, they say that the market has different characteristics that make it impossible to reach these high numbers. Maybe half the target could be reached quite easily but more than that seems difficult.
In the US for example, they don’t have the liquefaction capacity to actually deliver the 15 bcm additional LNG that they’re talking about. And when it comes to Qatar and the Middle East producers, their production capacity is already sold to other consumers, so we would need to buy it back from them, which is more difficult.
On biomethane, the 35 bcm mentioned in the REPowerEU plan seems quite optimistic as well.
These are numbers for 2030 though, which gives the industry at least seven years to meet them.
Sure, but you have to keep in mind that all the targets on biomethane for the last 10 years have never been met because it’s just difficult, or the sector lacked the right financial support.
Without Russian gas, we are probably in the worst situation we’ve ever been in Europe. Fortunately, we have a really good security of supply regulation, which stipulates protected and non-protected consumers. And that will be used.
How does consumer protection work in practice? I understand that households are the top priority and that some industries can get temporarily disconnected from the grid at certain times, right?
The regulation provides a framework for each EU member state to implement protected customers and non-protected customers. The highest protection is heat for residential purposes, schools, hospitals, social services, etc. and then heat for industries.
And then each country can implement it differently. For example, dairy farms in some countries will be prioritised because they have an essential social value in that country.
Many countries have implemented this rather fast based on cold winter scenarios or on the assumption that gas could be cut off for a maximum of 30 days. Now, we have to work on the assumption that we could have, let’s say 365 days without the main supplier while having a cold winter at the same time.
Now, the key question from our perspective is when does Russian gas stop flowing? Is it in May, June or July? And from a gas sector perspective, the later the better because it leaves us time to fill up the storage as much as possible.
This means we would be in an extremely severe situation if the Russian supply was cut now. Then, we would have to consider cutting supplies to interruptible consumers so they should stop receiving gas.
In some countries, they might even have to cut off industries during summer in order to ensure protected customers are supplied for next winter. Even if there was enough gas on paper, some customers would have to be cut to ensure protected customers are covered later on.
Is rationing also envisaged for protected customers like households?
In some countries, the TSOs include in their planning a possible interruption of supplies for protected customers as well. So, we have prepared for that, but this is only in extreme situations after interruptible customers are cut off.
Other countries have done the same, so there are mechanisms there, for sure.
Coming back to LNG imports, there are also bottlenecks in the European TSOs system. Currently, we have an infrastructure which has been constructed 30-40 years ago to import gas mainly from Russia and then redistribute it east-west to the rest of the EU. And now, we are in a situation where we are told to do the reverse. But the infrastructure has not been designed and constructed to do that.
What are the other bottlenecks?
The main problems are between east and western Europe and the diagonal going south. Because Russian gas comes from the east and then the pipelines get thinner and thinner as gas is delivered to the west where Norwegian deliveries and LNG are coming on land. Meanwhile, the south is where North African gas comes in and where most of the LNG terminals are situated, in the Iberian Peninsula.
So in the middle of Europe – that’s where you’re going to find some of the bottlenecks. In general, landlocked countries don’t have sufficient connections to the LNG ports.
Now, the numbers we have on import capacity might also be wrong because they have traditionally calculated this in a conservative manner. And if LSOs and TSOs recalculate LNG import capacity with a more optimistic mindset, maybe they will come up with higher figures.
For instance, between Belgium and Germany they were capable of flowing double the amount of gas that was previously the historical maximum. So actually, physics can do more than what had been sold historically. So we probably need to recalculate our maximum transmission capacity.
And we need to calculate this not only yearly but quarterly, monthly or weekly. Because if we have let’s say a warm November, then we can still inject a lot of gas into the storage. If for example we don’t meet the 80% storage filling level on 1 November 2022, maybe we can still improve the situation in December depending on the weather conditions.
Some storages have a slow injection rate while some have fast cycles and can be really flexible. So, it might be possible also to fill those much later. And right now, we don’t have the full overview of all of this. And for us, in GIE, that’s what we are going to do in the coming months.
Who can bring that data, is it ENTSOG?
For sure ENTSOG will deliver the flow scenarios for storage and LNG. But, as I said, we need to look again at the numbers that we shared in the past because they are probably a bit too conservative. At GIE, we have data as well from our AGSI and ALSI platforms.
Building new LNG import terminals takes at least 3 to 5 years. That means five years, during which people might have difficulties heating their homes. But maybe in the meantime, we will have turned to more sustainable solutions like energy conservation measures or renewables. Is there a risk that we start building too much gas infrastructure?
No, I don’t think there is a risk. And compared to the crisis we’re in now, I think this is a risk that we need to take anyway. Let me mention some examples.
First, EU member states such as Germany and the Netherlands are assessing ways of increasing domestic natural gas production in the North Sea or Italy in the Mediterranean Sea. There might be some volumes there. Secondly, Germany will build LNG terminals, the first one is planned to be ready at the end of 2024 – so in less than three years.
Thirdly, biomethane and hydrogen production can be accelerated.
I don’t know, maybe 1 or 2 bcm. But every bcm counts.
Sure, but EU imports from Russia are 150 bcm…
Yes, it’s a lot. But let’s say that we have 50 bcm from LNG, Norway and North Africa, then the rest will be let’s say, 0.5, 1 or 2 bcm. But they all add up and they are all really important.
And some of the infrastructure development could go really fast. Biomethane plants for example can be upgraded within one year. Floating LNG terminals – floating storage and regasification units – can be installed in a matter of months. And some of them will be there for next winter, in Germany and the Netherlands.
And some pipeline connections could go very fast if permitting is speeded up, for example along the congested north-south line.
And those connections could be ready in time for next winter?
Yes, sure, it’s all about prioritisation. In Demark, Norway and Poland, we are now constructing the Baltic pipe, and it will be in place on the 1st of October. It’s a 10 bcm pipeline so it’s a significant addition.
And we should not forget about energy efficiency efforts and simply consume less – that’s key for the overall transition.
Energy efficiency takes time as well, though.
Sure, it takes time. But now, more than ever is the time to push energy conservation measures. The IEA’s 10-Point Plan to reduce the EU’s reliance on Russian gas suggests consumers adjust their thermostats temporarily. Reducing buildings’ heating by 1°C would reduce gas demand by some 10 bcm a year. On my boiler at home, I took the temperature down by 12 degrees. My family complained but this is how it is – all of us have to use energy more efficiently.
Some countries also aim for a faster energy transition. In Denmark or Austria, politicians are pushing for regional gas phase-out plans, with plans to speed up heat pump deployment or conversion to electrification. There are a lot of different initiatives, which could add up to an overall decrease in gas consumption.
The Commission’s RePowerEU plan envisages an acceleration of the rollout of rooftop solar PV systems by up to 15 TWh this year by which the EU could save an additional 2.5 bcm of gas and double its planned yearly pace of deployment of heat pumps. Savings for every 10 million heat pumps installed by households could reach up to 12 bcm of gas.
And, with the right numbers, we can more easily match with imports and new domestic production. So we’re working on all this.
This rush now to build new gas infrastructure – how does that fit with the Green Deal and the EU’s decarbonisation targets for 2030? Will that infrastructure still be relevant in 2030 and beyond?
Please bear in mind that the new infrastructure being built today will also be ready for decarbonisation. For example, biomethane goes directly into the existing methane network. And storage and transmission infrastructure can be retrofitted or repurposed for hydrogen.
We think that, after next winter and the next 2 or 3 critical years, we will probably be in a situation where we find that decarbonisation has accelerated.
Right now, EU countries are turning back on old coal and oil-fired power plants to ease the pressure from the gas crisis. Those will not be turned on in four years if we have more renewable electricity.
At the end of the day, this gas crisis will be an accelerator for wind and solar electricity, biomethane, and hydrogen. And my guess is that in 2026 or 2027, we will have accelerated toward our 2030 climate goals. This crisis is a catalyst for Europe to reach its longer-term climate goal, I’m quite sure about that.