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Shippers’
Meeting
2019
2
Agenda
GRTgaz │ Shippers’ Meeting – March 14, 2019
09:30 COMMERCIAL NEWS
12:00
01:45
03:00
04:15
Introduction by Pierre Cotin
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
TRF NEWS
2018/2019 Winter feedbacks
TRF continuous training
Next summer 2019
Evolutions and propositions
WORKSHOPS
AFTERNOON SNACK & NETWORKING
Shippers’ Meeting - March 14, 2019
European regulation
process overview
4
ENTSOG works
2019/2020 auction calendar
Functionality Platform
Tariff Network Code
ENTSOG/GIE task force about Guarantees of Origin
Clean Energy Package
Gas Package 2020: European Commission study status update
European regulation:
the gas future is being built now
GRTgaz is
strongly
involved in
Paris as well as
in Brussels
GRTgaz │ Shippers’ Meeting – March 14, 2019
GRTgaz │ Shippers’ Meeting – March 14, 2019 5
ENTSOG worksFunctionality platform www.gasncfunc.eu
No Description Outcome Step date
I.Communication protocol
encryption
• Approval of the issue solution
document
• Board approval
• Publication of the solution after
the board approval
January 2019
II. Gas role model• Approval of the issue solution
documentEnd December
III.Fallback solution for failed DA
auctions
• Preparation of the issue solution
document
• Publication of the solution
End December
IV. INT NC on IPs 3rd
• 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 2019
6
ENTSOG worksTariff Network Code:
ACER’s monitoring on tariff methodology
GRTgaz │ Shippers’ Meeting – March 14, 2019
GRTgaz │ Shippers’ Meeting – March 14, 2019 7
ENTSOG/GIE Task ForceIssues 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
GRTgaz │ Shippers’ Meeting – March 14, 2019 8
ENTSOG/GIE Task ForceNext steps
Mid-March – Revised note taking into account Prime Movers
views and provisional recommendations
Early April – 2nd 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 32nd meeting of the Forum
of Madrid on June 5-6, 2019
GRTgaz │ Shippers’ Meeting – March 14, 2019 9
Clean Energy PackageState of play
An interinstitutional agreement has been reached
(December 18th, 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 1st, 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 21st, 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)
GRTgaz │ Shippers’ Meeting – March 14, 2019 10
The scope of the European
Commission 2020 Gas Package3 main pillars of the package
GRTgaz │ Shippers’ Meeting – March 14, 2019 11
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)
The scope of the EC 2020 Gas PackageOngoing and upcoming studies
GRTgaz │ Shippers’ Meeting – March 14, 2019 12
The scope of the EC 2020 Gas PackageExpected timeline
13
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
Conclusion
GRTgaz │ Shippers’ Meeting – March 14, 2019
Shippers’ Meeting - March 14, 2019
Upstream offer:
Highlight in 2018
and news for 2019
15
Dunkirk
Oltingue
L gas
Redistribution of auction premiums
Agenda
GRTgaz │ Shippers’ Meeting – March 14, 2019
GRTgaz │ Shippers’ Meeting – March 14, 2019 16
Dunkirk
17
According to the deliberations of July 27th, 2017 and March 8th, 2018
Dunkirk New rules of sale as from June 2018
GRTgaz │ Shippers’ Meeting – March 14, 2019
15 independent years from October to
October
Creation of quarterly capacity
Yearly and quarterly sold
one month before auctions
on PRISMA
OSP
Short term capacities sold same as before
GRTgaz │ Shippers’ Meeting – March 14, 2019 │ Accessibility Levels: Public: x 18
DunkirkNew rules of sale as from June 2018
GRTgaz │ Shippers’ Meeting – March 14, 2019 19
Oltingue
GRTgaz │ Shippers’ Meeting – March 14, 2019 20
According to the deliberation of July, 27th 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)
OltingueNew entry capacities as from June, 1st 2018
GWh/d
GWh/d
Firm
Interruptible
GWh/d Virtualys Obergailbach Oltingue
Network core
capacity
common to the
three points
Firm capacity 640 620 100 1260
BackhaulGWh/d
GRTgaz │ Shippers’ Meeting – March 14, 2019 21
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.
OltingueStrengthening 30GWh/d interruptible exit capacities
From December, 1st 2018 to September, 30th 2019
GWh/d
GWh/d
Firm
Interruptible
GRTgaz │ Shippers’ Meeting – March 14, 2019 22
L gas
GRTgaz │ Shippers’ Meeting – March 14, 2019 23
L gasBackground
2005 2009 20232013 2018 2029
Contract
conclued with a
provider
covering an H
gas to L gas
swap service
Implementation
of the
contractual H
gas to L gas
conversion
service
This provider is
commited to
ensure
swap service
until 2023
Merge of L gas and H
gas balancing zone
L zone is gradually converted
to H gas between 2018 and 2029
Risk of:
Demerging of the H&L zone
Regressing in terms of supply
competition
Complex management for GRTgaz
GRTgaz │ Shippers’ Meeting – March 14, 2019 24
For the security of supply of the L zone until the end of the conversion in 2029.
According to the deliberation of December, 13th 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, 1st 2019, GRTgaz will sell
7.5 GWh/d of day-head backhaul capacity
at Taisnières B
L gasNew offer starting from April, 1st 2019
GWh/d Backhaul
GRTgaz │ Shippers’ Meeting – March 14, 2019 25
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:
L gasNew offer starting from April, 1st 2019
Balance sheet gap in scope B Threshold Price for Scope B
Positive (long) balance sheet gap
below the threshold5 GWh
€1/MWh
Positive (long) balance sheet gap
above the threshold
€30/MWh
Negative (short) balance sheet
gap below the threshold1 GWh
€3.35/MWh
Negative (short) balance sheet
gap above the threshold
€30/MWh
GRTgaz │ Shippers’ Meeting – March 14, 2019 26
Redistribution of auction
premiums
GRTgaz │ Shippers’ Meeting – March 14, 2019 27
Redistributed amount in €:
Rules of redistribution:
• Prorata of consumption* between October, 1st 2017 and September, 30th
2018.
• In the invoice of November 2018
*reduced by quantities excluded under capacity allocation phase at regulated price for gas-intensive site
Redistribution of auction premiums End of the former mechanism
Auction premiums
Jul 17 – Oct 18
Distribution difference
Jul 17 - Sep 18
GRTgaz │ Shippers’ Meeting – March 14, 2019 28
Redistributed amount in €:
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
Redistribution of auction premiums New rule as from November, 1st 2018
Auction premiums
Nov 18 – Sept 19
Shippers’ Meeting - March 14, 2019
Upstream capacities
ATRT7 propositions
30
ATRT7 context,
risks and challenges
GRTgaz │ Shippers’ Meeting – March 14, 2019
31
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
ATRT7 context
0
500
1 000
1 500
2 000
2 500
3 000
0
500
1 000
1 500
2 000
2 500
3 000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Expected
subscriptionsFrance market needs Range depends on:
• Consumption scenario
• Transit supply
• Biomethane production
• LNG supply
Long term capacities on
entry IP (PIR and PITTM)
ATRT 7
GWh/j
GRTgaz │ Shippers’ Meeting – March 14, 2019
32
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.
ATRT7 risks
GRTgaz │ Shippers’ Meeting – March 14, 2019
33
ATRT7 stakes and contemplated offers
Limiting PEG price increase:
Limiting spread increase
Attracting LNG, the single gas
pipe competitor
Limiting incomes reduction:
Attracting new subscriptions
(LNG, short term at PIR…)
Increasing transit incomes
Delivering more attractive and
easier to operate offer
ATRT7 stakes
Reshuffling
Modifying
short term
multipliers
Changing additional
subscription calculation
Pooling
Implicit
allocations
Contemplated offers
PIR DK
simplification
DKLNG firm
519GWh/d
Increasing
PIR Ober
backhaul
TRF
simplification
GRTgaz │ Shippers’ Meeting – March 14, 2019
34
The 3 new offers for the
next CRE consultation
(March 2019)
GRTgaz │ Shippers’ Meeting – March 14, 2019
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):
35
Reshuffling (PIR)
GRTgaz │ Shippers’ Meeting – March 14, 2019
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 2023
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 re-
subscription potential
Revenue: fee of 10% of the reshuffled capacity amount
36
Reshuffling (PIR)
GRTgaz │ Shippers’ Meeting – March 14, 2019
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
GRTgaz │ Shippers’ Meeting – March 14, 2019
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
38
Pooling (PITTM)
Risk of loss of subscription at full
tariff is low compare to potential
benefits
Only applicable on within-
month
PITTM offer is more flexible,
thus more valuable: potential
for additional subscriptions
More LNG flowing in = less
congestions and less fuel gas
costs
GRTgaz │ Shippers’ Meeting – March 14, 2019
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
Change of additional subscriptions
calculation
GRTgaz │ Shippers’ Meeting – March 14, 2019
40
CRE ATRT7 timeline
GRTgaz │ Shippers’ Meeting – March 14, 2019
2019
January February March April May June July August September October November December
41
CRE ATRT7 agenda
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!
GRTgaz │ Shippers’ Meeting – March 14, 2019
Shippers’ Meeting - March 14, 2019
Downstream offer:
Wrap-up of all
changes ahead
43
1/ Changes in 2019
- 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
erosion) for a stabilizing effect on the tariff.
3/ Storage compensation : feedback and regulator’s announcement
4/ Unpaid interruptibility product
Summary
tariff
GRTgaz │ Shippers’ Meeting – March 14, 2019
44
- To give its clients more time to book, we shift the daily downstream
capacity lead-time from 3 pm D-1 to 8 pm D-1.
As of April 1st 2019 (first affected delivery day will be April 2nd)
- 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 e-mail, 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
1/ Changes in 2019Easing capacity subscription
tariff
tariff
GRTgaz │ Shippers’ Meeting – March 14, 2019
45
2/ Evolutions proposed in ATRT7Penalties and monthly factors
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.
Monthly factors :
- We propose to decrease the monthly capacity factors in January and
February from 8 to 4.
Example for Dailytariff
tariff
GRTgaz │ Shippers’ Meeting – March 14, 2019
46
3/ Storage Compensation Current principles on the distribution network
Since April 1st 2018 :
- The CRE establishes a regulated revenue each year for
the storage operators
- Storage operators sell their capacity through auctions
- 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)
1
2
3
1
2
3
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 »)
Average
consumption
Capacity
Storage
Compensation
basis
Consumption
Amounts in 2018 (MEUR)
GRTgaz │ Shippers’ Meeting – March 14, 2019
47
3/ Storage compensationFeedback 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.
GRTgaz │ Shippers’ Meeting – March 14, 2019
48
3/ Storage CompensationRegulator’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 1st 2020.
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
customersGRTgaz │ Shippers’ Meeting – March 14, 2019
49
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
4/ Unpaid interruptibility product
* Not in the meaning of the transmission agreementGRTgaz │ Shippers’ Meeting – March 14, 2019
Shippers’ Meeting - March 14, 2019
2018: gas grid
overview
5151
2018: 442 TWh2017: 465 TWh
Public
supply
Industry
except
CCGT+CT*
CCGT+ CT
35 TWh
-35%
137 TWh
+2%
270 TWh
-2%
Gross gas consumption in 2018 GRTgaz zone
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).
GRTgaz │ Shippers’ Meeting – March 14, 2019
5% decrease of natural gas consumption
*Combined cycle gas turbines + combustion turbines
52
8 TWh
21 TWh
46 TWh55 TWh
35 TWh
2014 2015 2016 2017 2018
Gas consumption of CCGT+CT
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 2018.
However, the utilization rate of gas-fired
power plants is important, due to their high
flexibility.
GRTgaz │ Shippers’ Meeting – March 14, 2019
Gas: a flexible resource for power
generation
53
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 CO2 in 2018.
GRTgaz │ Shippers’ Meeting – March 14, 2019
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.
News gas conversions in the industry
54
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.
GRTgaz │ Shippers’ Meeting – March 14, 2019
Creation of the TRF (Trading Region
France) on November 1st, 2018
55
2018 gas flows VS 2017Source : smartGRTgaz
447 TWh : slight decrease in gaspipeline entries in the North ofFrance.
117 TWh : 7 year high for LNGentries
33 TWh toward Switzerland/Italy: 6year record transit
31 TWh toward Spain: decrease inthe annual transit (but strongincrease since TRF creation on Nov1st 2018: + 50%)
of the TRF on 1/11/2018: + 50%)
GRTgaz │ Shippers’ Meeting – March 14, 2019
+ 0 TWh
+0 %
+13 TWh
+45 %
+6 TWh
+22 %
-6 TWh
-3%
+20 TWh
+24 %
-21 TWh
-12%
-12 TWh
-27%
+2 TWh
+25% +++
+
+
+
+
Interconnections
with LNG terminals
Interconnections with
adjacent networks+
+ +
Growth of LNG entries
56
0
20
40
60
80
100
120
1401 n
ov.
1 d
éc.
1 jan
v.
1 f
évr.
1 m
ars
1 a
vr.
1 m
ai
1 juin
1 juil.
1 a
oû
t
1 s
ept.
1 o
ct.
TW
h o
f co
ntr
actu
al
sto
ck
Stock level – whole France
2015/2016 2016/2017 2017/2018
Injection campaign
Rate of injection
(GWh/j)
425
554
moyenne2013-2017
2018
+30%
average
GRTgaz │ Shippers’ Meeting – March 14, 2019
Efficient storage regulation
Dynamic fill-in campaign due to the Dec. 2017 storage regulation reform.
57
714 GWh injected in 2018 in
France (+75%). 76 sites in
operation, 64% are agricultural
projects.
1.2 TWh of installed capacity at
Dec. 31st 2018.
Nearly 14 TWh in the capacity
register (+ 6 TWh compared to
2017).
Biomethane injection sites connected
to the gas grid
GRTgaz │ Shippers’ Meeting – March 14, 2019
Biomethane: a real take-off…
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 2019.
- 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 ») :
- 2023 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
GRTgaz │ Shippers’ Meeting – March 14, 2019
59
Annexes
GRTgaz │ Shippers’ Meeting – March 14, 2019
60
-1,00
-0,50
0,00
0,50
1,00
1,50
2,00
2,50
2018/2017 gas consumption discrepancy
TW
h
GRTgaz │ Shippers’ Meeting – March 14, 2019
Industry: evolution of gas consumption
2018/2017
61
Industry: review of the last five years of
consumption
128 000
129 000
130 000
131 000
132 000
133 000
134 000
135 000
136 000
137 000
138 000
2014 2015 2016 2017 2018
Industrial gas consumption except centralized production of electricity
GRTgaz │ Shippers’ Meeting – March 14, 2019
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, 2018.
Flows regularly beyond firm capacity, but without physical congestion except for 2
days in January 2019.
GRTgaz │ Shippers’ Meeting – March 14, 2019
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, 2018.
Flows regularly beyond firm capacity, but without physical congestion except for 2
days in January 2019.
GRTgaz │ Shippers’ Meeting – March 14, 2019
Shippers’ Meeting - March 14, 2019
Strengthening the
competitiveness of the
French biomethane sector
Renewable gas and ENEA study
65
A collective study
Board meeting 2
26/04
Board meeting 3
29/05
Board meeting 1
5/04
Board meeting 4
12/07
Debriefs about the project financing
Debriefs about positive externalities
A large group of players involved in this study
Debriefs about the technical levers
Short meeting outline for large diffusion
via the SER and the ATEE
Many feedbacks after the diffusion
Detailed executive summary in order to
approve the framework and hypothesis
with the board meeting and the review
committee
Delivered to Solagro and approved
Board meeting 6
26/09
Board meeting 5
23/08
Publication of a
public
executive
summary in
November 2018
and a public
report in
January 2019
Board meeting 7
19/10
GRTgaz │ Shippers’ Meeting – March 14, 2019
66
Study of three types of unitAutonomous agricultural
(AA)
Territorial agricultural
(TA)
Territorial industrial
(TI)
Injection
capacity
100 Nm3/h
(9,180 MWh/year)
200 Nm3/h
(18,411 MWh/year)
300 Nm3/h
(27,640 MWh/year)
Inputs 21,860 tons 33,500 tons 45,000 tons
Mixed
inputs
Manure: 59%; Slurry: 27%;
Straws: 5%; CIVE: 9%
CIVE: 54%; Slurry: 24%; Food
industry waste (except animal
by-products) and bio-waste:
11%; Manure: 9%
CIVE: 47%; Food industry
waste and bio-waste: 33%;
Manure: 12%; Slurry: 8%
Main
characteristics
Unit with agricultural
effluents as main feature;
independent on bearings
Pool of a few farmers
Injection in the gas
distribution network
Unit with CIVE as main
feature plus slurry, manure,
food industry waste and bio-
waste
Pool of many farmers
Injection in the gas
distribution network
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 Comments about the sample cases selection
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).
GRTgaz │ Shippers’ Meeting – March 14, 2019
67
Supporting the sector is more than ever
a necessity
AA TA TI
Withoutsubsidy
LCOE 122€/MWh 105€/MWh 94€/MWh
TRI Project 4.9% 3.8% 2.9%
DSCR 1.26 1.17 1.17
With subsidy(20% on the CAPEX)
LCOE 107€/MWh 94€/MWh 85€/MWh
TRI Project 8.9% 7.7% 6.6%
DSCR 1.35 1.30 1.27
The levelised cost of energy (LCOE) they have been valued over 15 years with a weighted average cost of capital (WACC) of 5 %.
Financial criteria usually expected by banks
TRI Project: between 6 and 8% minimum
DSCR: between 1.3 and 1.4 minimum
GRTgaz │ Shippers’ Meeting – March 14, 2019
68
10 main themes to strengthen the
competitiveness of the biomethane
sector in France
Maximize
methanogenic power
of inputs
Maximize
production of
renewable gas
Limit
inputs costs
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
GRTgaz │ Shippers’ Meeting – March 14, 2019
69
Expected competitiveness profits in
short and medium term
Medium term
(2025-2030)
For the three cases, a 20% decrease of the costs can be reached by 2020-
2025
Current Short term
(2020-2025)
Medium term
(2025-2030)
Current Short term
(2020-2025)
Medium term
(2025-2030)
Current Short term
(2020-2025)
Autonomous agricultural Territorial agricultural Territorial industrial
121.9€
- 25.2€
96.7€
- 14.3€
82.4€
105.3€
- 18.3€
87.0€
- 11.8€
75.2€
94.0€
- 18.3€
75.7€
- 10.1€
65.7€
GRTgaz │ Shippers’ Meeting – March 14, 2019
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
Natural gas
IT biomethane
AT biomethane
AA biomethane
33€/MWh
66€/MWh
75€/MWh
82€/MWh
Source: IEA Outlook for Natural Gas
GRTgaz │ Shippers’ Meeting – March 14, 2019
71
… but a lot of positive externalities
remains to be quantified
Farmers
Waste producers
(food industry
waste, community)
Energy
consumers
*monetization in a conservative case with a carbon tutelary value of 100€/tCO2e
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
State
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)
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
GRTgaz │ Shippers’ Meeting – March 14, 2019
72
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 2023
- 60€/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
Conclusion
GRTgaz │ Shippers’ Meeting – March 14, 2019
TRF feedbacks and
evolutions
Shippers’ Meeting - March 14, 2019
74
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
Content
GRTgaz │ Shippers’ Meeting – March 14, 2019
GRTgaz │ Shippers’ Meeting – March 14, 2019 75
2018/2019 Winter feedbacks TRF commissioning
New PEG figures
Winter supply and limit situations
GRTgaz │ Shippers’ Meeting – March 14, 2019
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!
TRF commissioning
GRTgaz │ Shippers’ Meeting – March 14, 2019
The price and liquidity figures show that the PEG is attractive
and competitive
New PEG figures
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 2018
traded each day on the PEG, close to the volumes previously traded
on the PEG North and TRS combined
*: from Novmber 2017 to February 2018
active actors at the PEG on January 2019.
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
PEGN-TTF :
0,00€/MWh*
TRS-TTF :
1,68€/MWh*
0,1 €
/MWh
PEGN (2260
GWh) + TRS
(550 GWh) =
2 810 GWh*
2 648
GWh
105*
109
GRTgaz │ Shippers’ Meeting – March 14, 2019 78
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
Winter supply
-400
-200
0
200
400
600
800
1000
1200
1400
01/11/2018 01/12/2018 01/01/2019 01/02/2019
Supply flows downstream of limits
Net storage withdrawal (Atlantique, Sud-Est and Lussagnet)
LNG send-out (Montoir and Fos)
Pirineos exit
A very high level of
outputs at Pirineos
during all winter
(around 180 GWh/d,
even during the
Elengy strike)
GRTgaz │ Shippers’ Meeting – March 14, 2019 79
Vigilance Outlook : Green Alert Level during almost all the winter…
Limit situations
Excepted on
03/12/2018 on
the S1 limit.
No tension on
any limit….
GRTgaz │ Shippers’ Meeting – March 14, 2019 80
Initial supply situation :
High output in Pirineos
Low consumption
Low withdrawal of North storages
Injection in Lussagnet storages
Winter supply and limit situations
Focus on 3/12/2018
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
GRTgaz │ Shippers’ Meeting – March 14, 2019 81
TRF mechanisms rely on storage flexibility.
Storage levels downstream TRF limits are monitored in order to
anticipate possible gas shortage:
Monitoring of storage levels
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
Low storage level
Call for tenders
Flow commitment
GRTgaz │ Shippers’ Meeting – March 14, 2019 82
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.
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
GRTgaz │ Shippers’ Meeting – March 14, 2019 83
TRF continuous training
GRTgaz │ Shippers’ Meeting – March 14, 2019 84
The mechanisms are already operational…
… with the vigilance outlook online since
November 1st…
… one limit reached and managed by
interrupting interruptible capacities…… two tests of the Locational Spread to
validate our IT systems…
Shipper … and many webinars to exchange with you
about these topics.
GRTgaz │ Shippers’ Meeting – March 14, 2019 85
…but have not yet been used, so we invite
you to:
A training quiz, operationally oriented, for large
part about the Locational Spread (in your mailbox
next week)
A full-scale test to allow you to experience
a congestion management situation before
a potential triggering event
April 10, 2019
GRTgaz │ Shippers’ Meeting – March 14, 2019 86
« Full-scale test »
April 10th in working hours
No physical impact:
•NS1 upstream, so no interruption of interruptible capacities
•Cancellation of PEGAS trades, so no physical renomination expected
•No RMUT triggered
For all signatories of the Locational Spread contract (via the usual operational contacts)
GRTgaz │ Shippers’ Meeting – March 14, 2019 87
Next Summer 2019 The maintenance schedule for 2019
New superpoints, managed with Teréga
(1/4/2019)
GRTgaz │ Shippers’ Meeting – March 14, 2019 88
Summer capacity restriction indicators
Capacity restriction rate published in the February schedule
(summer)
2016Reference
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%
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
-55%
GRTgaz goal: reduce over 50% the summer capacity restrictions
between 2016 and 2020
GRTgaz │ Shippers’ Meeting – March 14, 2019
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
Maintenance schedule for 2019
What’s new?
The publication planning To be consolidated in collaboration with the storage auctions
GRTgaz │ Shippers’ Meeting – March 14, 2019 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)
GRTgaz │ Shippers’ Meeting – March 14, 2019 91
Atlantic storage an be filled with this maintenance programme
And LNG flows relieve the constraints on Atlantic, allowing more UIOLI
Optimization of storage injection
thanks to Superpoints’ flexibility
Very prudent assumptions
with no LNG. GRTgaz
maintenance delays 100%
filling by one month
Reasonable
assumptions
relieves all or almost
all constraints
-0,55 -0,72
-1,51
-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)
GRTgaz │ Shippers’ Meeting – March 14, 2019 92
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)
LNG send-out outlook
Qatar
Nigeria
US (Gulf
of Mexico)
Algeria
Norway
Market prices anticipate a healthy supply of LNG in Europe at least
until August
Market prices as of 05/03 settlements. Charter rate at 46 kusd/day
Egypt
GRTgaz │ Shippers’ Meeting – March 14, 2019
Maintenance schedule for 2019:
To help you:
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)
COSsp(Exit) max -35
COEsp(Exit)transfer
nomination-15
COE with bonus
and transfert
transfer
confirmation-15
-40 10
-20 10
20
25
Confirmation
Nomination
50
Transfert GRTgaz ->
Teréga
Transfert Teréga ->
GRTgaz
SSPNS3D
A superpoint simulator
2 Webinars
Link to watch the rurun and
download the simulator
GRTgaz │ Shippers’ Meeting – March 14, 2019 94
Evolutions and propositions
for summer 2020
GRTgaz │ Shippers’ Meeting – March 14, 2019 95
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 1/4/2020
Evolutions and propositions for summer 2020
GRTgaz │ Shippers’ Meeting – March 14, 2019 96
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@
New publication planning
October
Y-1
Storages
auctions in
November
End of
Feb. YD-60 WD-5 D-1
(3pm)
publication of the
provisional
program
First
Publicationon
Trans@ctions
Restrictions
Updates
December
Y-1
If needed,
update sent
by E-mail
Storages auctions in
January & February