Markets, infrastructure and energy security - Gas & oil market

The European natural gas market has been changing since the start of the liberalization process in 1998. Retail competition has emerged while infrastructure related segments such as distribution and transport of gas remain regulated. European legislation since then has been aimed at improving competition and integration of national and regional markets. Improved coordination between the operators of transport networks and between regulatory authorities are considered the means to achieve this.

This all happened against the background of a constantly growing demand for gas, with largest growth recorded in the electricity generation sector where gas has been replacing relatively dirty fuels as oil and coal. This could continue in the future, but uncertainties on the further penetration of gas in this sector remain dependent on uncertain developments with respect to other generation technologies (e.g. coal-based generation with CO₂ capture and storage, large-scale wind-based generation for which gas-based power generation could provide a back-up).

With stagnating or even increasing gas demand, Europe is nearing depletion of its indigenous gas reserves, making it more and more dependent on imports from Russia, Algeria and LNG exporting states. Moreover, a depletion of Dutch gas reserves in particular increases the need to expand gas storage capacity, because the capability to provide flexibility in gas supply decreases with depletion. All in all, this has led to a continuing interest in gas security of supply issues.

Role for ECN Policy Studies

The Energy Production, Markets and Networks group of ECN Policy Studies can perform various types of evaluation and assessment studies, assist in government and company strategy formulation, and contribute to research projects, both fundamental and applied in nature. This is illustrated by the list of ongoing and recently finalized projects related to this theme.

Partners or Stakeholders

In the field of gas and oil markets ECN has worked for, and cooperated with, a diverse set of organizations, both private and public, national and international. These include: GasTerra, Gasunie, Ministry of Economic Affairs, Delft University of Technology, European Commission, ECORYS, KEMA, Clingendael International Energy Programme (CIEP), COWI, OME, RWTH Aachen, Enviros, BSREC, IBS, VTT, CESI RICERCA, IMEPOWER, REE, CEP, EnCog, Beicip-Franlab, Scuola Mattei of ENI, ECB, Energsys, ERI RAS, ISPE, and IEA.

More information

Below we have provided an overview of ECN Policy Studies’ projects within this theme. In addition a list of publications on this theme are added. An important tool in a number of our gas market related projects is the European gas market model GASTALE. More information on this tool can be found here.

Ongoing and recent projects:

• SUSPLAN (ongoing)
  Development of strategies, recommendations, and benchmarks for the integration of renewable energy sources. The interactions between the gas and electricity infrastructure developments and markets were studied with the help of GASTALE.
• Understanding gas sector intra- and inter-market interactions
  An assessment of the interactions between the different between elements in the gas market and between energy markets (gas, electricity and CO2).
• Upstream and downstream security of gas supply
  A comprehensive analysis of security of supply issues on the gas market on both the upstream and downstream-side.
• Seasonal gas storage
  In this study, commissioned by GasTerra, we analyzed recent developments on the market for seasonal gas storage and used EPM’s GASTALE  model to explore future developments on this market.
• Security of Dutch gas supply
  This study explores the security of Dutch gas supply until 2020.
• Earlier projects

Publications:

• Developments on the Northwestern European market for seasonal gas storage. September 2009.
  Study on the demand and supply of seasonal swing in NW-Europe and the role of gas storage facilities therein.
• Improving regulation of seasonal gas storage. July 2009.
  Reasons for the stagnation of seasonal gas storage developments in NW-Europe and policy recommendations.
• Oil prices and climate change mitigation. May 2009.
  Assessment of the impact of different oil price scenarios on the abatement costs of mitigation options in Europe in 2020.
• Verkenning naar de voorzienings- en leveringszekerheid van de Nederlandse gasvoorziening in de periode tot 2020. July 2008. (in Dutch)
  Assessment of the gas security of supply position of the Netherlands.
• European energy market liberalisation and integration: an assessment of the new EU energy package. June 2008.

For more information please contact Jeroen de Joode.