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Impact of Natural Gas Distribution Network Structure and Operator Strategies on Grid Economy in Face of Decreasing Demand

Author

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  • Daniel Then

    (Department of Grid Planning and Operation, Fraunhofer Institute for Energy Economics and Energy System Technology, 34119 Kassel, Germany
    Stadtwerke Bamberg Energy and Water Supply Company, 96052 Bamberg, Germany)

  • Christian Spalthoff

    (Department of Grid Planning and Operation, Fraunhofer Institute for Energy Economics and Energy System Technology, 34119 Kassel, Germany)

  • Johannes Bauer

    (Stadtwerke Bamberg Energy and Water Supply Company, 96052 Bamberg, Germany)

  • Tanja M. Kneiske

    (Department of Grid Planning and Operation, Fraunhofer Institute for Energy Economics and Energy System Technology, 34119 Kassel, Germany)

  • Martin Braun

    (Department of Grid Planning and Operation, Fraunhofer Institute for Energy Economics and Energy System Technology, 34119 Kassel, Germany
    Department of Energy Management and Power System Operation, University of Kassel, 34119 Kassel, Germany)

Abstract

Currently, natural gas provides more than a third of the energy used in European residential buildings. As part of the general decline of fossil fuels, this gas consumption is predicted to drop in several countries by 25–100% by 2050. We model a decline in gas consumption in 57 urban German distribution grids looking for the influence of grid-specific factors and different distribution network operator (DNO) strategies on grid charges. We find a functional relationship between grid length and customer amount described by a power law, with an exponent correlated with structural grid parameters. The disordered structure inherent to grids typically results in a decline in grid costs much slower than the corresponding demand. We introduce a simplified yearly cash flow calculation model based on the power law and validate it against mixed integer linear optimization. A comparison of the total costs of operation and resulting grid charges for several scenarios and strategies estimates the effects on DNO business models. Depending on a combination of DNO’s strategy and customers’ exit pattern, grid charges may increase, accelerating the substitution of gas-bound technologies that might develop into a self-reinforcing feedback loop, leading to grid defection.

Suggested Citation

  • Daniel Then & Christian Spalthoff & Johannes Bauer & Tanja M. Kneiske & Martin Braun, 2020. "Impact of Natural Gas Distribution Network Structure and Operator Strategies on Grid Economy in Face of Decreasing Demand," Energies, MDPI, vol. 13(3), pages 1-33, February.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:3:p:664-:d:316458
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    Cited by:

    1. Daniel Lohmeier & Dennis Cronbach & Simon Ruben Drauz & Martin Braun & Tanja Manuela Kneiske, 2020. "Pandapipes: An Open-Source Piping Grid Calculation Package for Multi-Energy Grid Simulations," Sustainability, MDPI, vol. 12(23), pages 1-39, November.
    2. Darya Pyatkina & Tamara Shcherbina & Vadim Samusenkov & Irina Razinkina & Mariusz Sroka, 2021. "Modeling and Management of Power Supply Enterprises’ Cash Flows," Energies, MDPI, vol. 14(4), pages 1-17, February.
    3. Stella Oberle & Marius Neuwirth & Till Gnann & Martin Wietschel, 2022. "Can Industry Keep Gas Distribution Networks Alive? Future Development of the Gas Network in a Decarbonized World: A German Case Study," Energies, MDPI, vol. 15(24), pages 1-20, December.
    4. Daniel Then & Patrick Hein & Tanja M. Kneiske & Martin Braun, 2020. "Analysis of Dependencies between Gas and Electricity Distribution Grid Planning and Building Energy Retrofit Decisions," Sustainability, MDPI, vol. 12(13), pages 1-42, July.
    5. Jolando M. Kisse & Martin Braun & Simon Letzgus & Tanja M. Kneiske, 2020. "A GIS-Based Planning Approach for Urban Power and Natural Gas Distribution Grids with Different Heat Pump Scenarios," Energies, MDPI, vol. 13(16), pages 1-31, August.

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