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The Role of Natural Gas in a Low-Carbon Europe: Infrastructure and Regional Supply Security in the Global Gas Model

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  • Franziska Holz
  • Philipp M. Richter
  • Ruud Egging

Abstract

In this paper, we use the Global Gas Model to analyze the perspectives and infrastructure needs of the European natural gas market until 2050. Three pathways of natural gas consumption in a future low-carbon energy system in Europe are envisaged: i) a decreasing natural gas consumption, along the results of the PRIMES model for the EMF decarbonization scenarios; ii) a moderate increase of natural gas consumption, along the lines of the IEA (2012) World Energy Outlook's New Policy Scenario; and iii) a temporary increase of natural gas use as a bridge technology, followed by a strong decrease after 2030. Our results show that import infrastructure and intra-European transit capacity currently in place or under construction are largely sufficient to accommodate the import needs of the EMF decarbonization scenarios, despite the reduction of domestic production and the increase of import dependency. However, due to strong demand in Asia which draws LNG and imports from Russia, Europe has to increasingly rely on pipeline exports from Africa and the Caspian region from where new pipelines are built. Moreover, pipeline investments open up new import and transit paths, including reverse flow capacity, which improves the diversification of supplies. In the high gas consumption scenario similar pipeline links are realized-though on a larger scale, doubling the costs of infrastructure expansion. In the bridge technology scenario, the utilization rates of (idle) LNG import capacity can be increased for the short period of temporary strong natural gas demand.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.417156.de/dp1273.pdf
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Bibliographic Info

Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1273.

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Length: 30 p.
Date of creation: 2013
Date of revision:
Handle: RePEc:diw:diwwpp:dp1273

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Keywords: natural gas; climate change; infrastructure; equilibrium modeling;

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References

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  1. Brigitte Knopf & Yen-Heng Henry Chen & Enrica De Cian & Hannah Förster & Amit Kanudia & Ioanna Karkatsouli & Ilkka Keppo & Tiina Koljonen & Katja Schumacher & Detlef P. Van Vuuren, 2013. "Beyond 2020 — Strategies And Costs For Transforming The European Energy System," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., World Scientific Publishing Co. Pte. Ltd., vol. 4(su), pages 1340001-1-1.
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  5. Holz, Franziska & von Hirschhausen, Christian & Kemfert, Claudia, 2008. "A strategic model of European gas supply (GASMOD)," Energy Economics, Elsevier, Elsevier, vol. 30(3), pages 766-788, May.
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  10. SMEERS, Yves, 2008. "Gas models and three difficult objectives," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2008009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  12. Egging, Ruud, 2013. "Benders Decomposition for multi-stage stochastic mixed complementarity problems – Applied to a global natural gas market model," European Journal of Operational Research, Elsevier, Elsevier, vol. 226(2), pages 341-353.
  13. Labriet, Maryse & Kanudia, Amit & Loulou, Richard, 2012. "Climate mitigation under an uncertain technology future: A TIAM-World analysis," Energy Economics, Elsevier, Elsevier, vol. 34(S3), pages S366-S377.
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Citations

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Cited by:
  1. Philipp M. Richter, 2013. "From Boom to Bust?: A Critical Look at US Shale Gas Projections," Discussion Papers of DIW Berlin 1338, DIW Berlin, German Institute for Economic Research.
  2. Philipp M. Richter & Franziska Holz, 2014. "All Quiet on the Eastern Front? Disruption Scenarios of Russian Natural Gas Supply to Europe," Discussion Papers of DIW Berlin 1383, DIW Berlin, German Institute for Economic Research.

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