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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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Author Info

  • 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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Related research

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

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References

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  1. Ruud Egging, Franziska Holz, Christian von Hirschhausen and Steven A. Gabriel, 2009. "Representing GASPEC with the World Gas Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 97-118.
  2. 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, vol. 226(2), pages 341-353.
  3. Maroeska G. Boots, Fieke A.M. Rijkers and Benjamin F. Hobbs, 2004. "Trading in the Downstream European Gas Market: A Successive Oligopoly Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 73-102.
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  5. Egging, Ruud & Gabriel, Steven A. & Holz, Franziska & Zhuang, Jifang, 2008. "A complementarity model for the European natural gas market," Energy Policy, Elsevier, vol. 36(7), pages 2385-2414, July.
  6. Labriet, Maryse & Kanudia, Amit & Loulou, Richard, 2012. "Climate mitigation under an uncertain technology future: A TIAM-World analysis," Energy Economics, Elsevier, vol. 34(S3), pages S366-S377.
  7. Ruud Egging & Franziska Holz & Steven A. Gabriel, 2009. "The World Gas Model: A Multi-Period Mixed Complementarity Model for the Global Natural Gas Market," Discussion Papers of DIW Berlin 959, DIW Berlin, German Institute for Economic Research.
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  10. Lise, Wietze & Hobbs, Benjamin F., 2008. "Future evolution of the liberalised European gas market: Simulation results with a dynamic model," Energy, Elsevier, vol. 33(7), pages 989-1004.
  11. Franziska Holz & Christian von Hirschhausen & Claudia Kemfert, 2006. "A Strategic Model of European Gas Supply (GASMOD)," Discussion Papers of DIW Berlin 551, DIW Berlin, German Institute for Economic Research.
  12. Andre, Jean & Bonnans, Frédéric & Cornibert, Laurent, 2009. "Optimization of capacity expansion planning for gas transportation networks," European Journal of Operational Research, Elsevier, vol. 197(3), pages 1019-1027, September.
  13. SMEERS, Yves, 1997. "Computable equilibrium models and the restructuring of the European electricity and gas markets," CORE Discussion Papers 1997061, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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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.

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