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Role of storage for SoS / Necessary signals for investing in new storage

Role of storage for SoS / Necessary signals for investing in new storage. Klaus-Dieter Barbknecht GSE President GIE Annual Conference 2006, Bratislava 28-29 September 2006. Storage = Solid as a rock?. Market demand for flexibility. The inventories of storage are already filled in some

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Role of storage for SoS / Necessary signals for investing in new storage

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  1. Role of storage for SoS / Necessary signals for investing in new storage Klaus-Dieter Barbknecht GSE President GIE Annual Conference 2006, Bratislava 28-29 September 2006 GIE Annual Conference 2006, Bratislava

  2. Storage= Solid as a rock? GIE Annual Conference 2006, Bratislava

  3. Market demand for flexibility • The inventories of storage are already filled in some • European countries. • An expression of the new gas world? Source: The Heren Report 2006 GIE Annual Conference 2006, Bratislava

  4. Who is going to satisfy the European import demand? EU 25 [Mrd. M³/a] Import 2004 2015 ~ 700 ~ 500 75 % 50 % Import Norway 14 % 15-20 % 50 % Own production 25 % 2004 2015 Russia/ Caspian Region 22 % 30-40 % Others (LNG) 3 % 10-15 % North Africa 11 % 10-15 % Source: Wingas GIE Annual Conference 2006, Bratislava

  5. Role of Storage Balancing seasonal variations in consumption Covering demand peaks Securing gas supply in case of interferences in production, transport or supply Enhancing cost effectiveness of gas transport Seasonal modulation and security of supply (technical availability) seconded by products to support the new market a part of the flexibility market = SECURITY OF SUPPLY GIE Annual Conference 2006, Bratislava

  6. Storage volumes: future Some examples of current storage projects in Europe: UK: Humbley Grove (Star Energy): since 2005 a capacity 315 mcm Aldbrough (Statoil/Scottish, Southern Energy): 420 mcm by 2009 Welton (Star Energy): 435 mcm by 2008/2009 Germany: Rüdersdorf (EWE): 300 mcm Bernburg (VNG): 390 mcm Italy: Alfonsine (Agip): 1.300 mcm Conegliano (Edison): 190 mcm Netherlands: Alkmaar PGI (BP): 500-750 mcm GIE Annual Conference 2006, Bratislava

  7. Labyrinth? Where are we now? GIE Annual Conference 2006, Bratislava

  8. Investment • Netherless massive investments are needed for safe and reliable storage facilities in order to guarantee a secure supply of gas • Long-term financing of investment has to be assured • Framework conditions as an precondition for growth and investments: • clear • stable • predictable GIE Annual Conference 2006, Bratislava

  9. Emergency Gas Stocks Development of emergency gas stocks would lead to : • undermining investments in existing and future storage • huge investments that could be used to achieve more efficiently SoS • substantial repercussions on gas prices GIE Annual Conference 2006, Bratislava

  10. Conclusion: Necessary Signals for investing in new storage • clear, predictable and reliable framework • decision about the option to regulate the storage • if regulation: need for allowing storage activities to be in line with market expectations, no threat to security of storage infrastructure due to low tariffs GIE Annual Conference 2006, Bratislava

  11. Outlook: Madrid XII ERGEG will present the last monitoring for implementation the Guidelines for Good Practice for Storage Operators (GGPSSO) = recommendation to the European Commission ? regulation of the storage voluntary guidlines GIE Annual Conference 2006, Bratislava

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