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German natural gas grid needs €2.2bn of investment by 2022

21 Feb 2012 17:20:46 | esgm

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Germany's natural gas network infrastructure will need an investment of at least €2.2bn by 2022 its transmission system operators (TSOs) have predicted, according to the first draft of the country's grid development plan.

The TSOs have published this first version so that market participants can comment on the details.

In the first step of grid expansion, until 2015, the TSOs forecast €600m of needed investments for 200km of new pipelines. The second step, until 2022, will require 730km of new pipes and an additional 360MW compressor. The costs by 2022 amount to €2.2bn.

The predictions are based on the second of three possible scenarios for the country's future natural gas demand, which pegs total German consumption at 784TWh in 2015. By 2022, the scenario predicts a demand of 737TWh, a reduction of 11% compared to 2009.

The TSOs regard this scenario of a slight reduction in gas consumption as the most probable outcome.

The consequences of another scenario, with a predicted gas demand of 802TWh in 2022 were also calculated, however.

In the case of increased consumption, the required investments would add up to €4.6bn. The pipeline expansions would then span 1,840km, with a need for 740MW of additional compressor capacity.

Market participants have widely criticised previously released future gas demand scenarios, saying the TSOs had underestimated demand (see ESGM 7 November 2011).

Gas-fired plant

The TSOs stressed that gas-fired power plants and storage sites will play a significant role in the grid development. The main demand scenario sees the capacity of gas-fired power generation increase by 40% until 2022.

But since there hasn't been a final investment decision for most units and the investment conditions in Germany currently impede many operators from building new plants, gas-fired generation is a factor of uncertainty in the current grid development plan, according to the draft document.

Regardless, the draft network development plan predicts the need for an extra 14.4GW of transport capacity between the GASPOOL and NCG market areas by 2022. Real bottlenecks in the German grid could not be detected, the TSOs argued, referring to the results of capacity auctions on online platform trac-x.

But despite 23 trac-x transport capacity auctions at the border points Lasów (exit), RC Basel (exit) and RC Thayngen-Fallentor (exit) being overbooked, there has been no need for increased capacity at these points until now.

For cross-border capacity, the TSOs mainly adopted the assumptions of the Ten-Year Network Development Plan of the European Network of Transmission System Operators Gas (ENTSOG). However, some more recent developments have been also been included in the draft.

For example, the companies state the expansion of the French LNG terminals Dunkerque and Fos Cavanou would lead to a diversification of gas supply. Additionally, TSO GRTGaz is planning on delivering 4.2GW of French LNG capacity arriving through the Medelsheim border point to the NCG, starting in 2017. But this capacity would not require a pipeline expansion.

The final 2013-2022 grid development plan has to be finished by 1 April. The consultation period ends on 9 March. MH

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