Abstract
This study analyzes the case of a Russian gas export embargo starting in November 2014 and its effects on security of gas supply in Europe. Russian gas exports are crucial for European supply. In 2013, Russia exported more than 160 billion cubic meters of natural gas to Europe (including Turkey, excluding Belarus and the Ukraine), thereby supplying more than 30 % of European annual gas demand.
The analysis is conducted on a country level with a special focus on Germany. The study is based on a computer simulation of European pipeline, storage and LNG infrastructure utilization. We simulate different durations of an export embargo, i.e., 1 to 9 months, different availability of LNG on global markets and different use of gas storage. Technical aspects such as pipeline pressure could be another threat for security of gas supply during an embargo, but these are beyond the scope of this paper.
The results found imply that in case of a 3-month embargo supply would be secured in almost all of the European countries except for in Bulgaria, Poland, Turkey and Finland. In case of a 9-month embargo the case is different and gas supplies in Germany, Italy, France and many countries in Eastern Europe would severely be affected. In total 46 bcm of European gas demand could not be served in that case.
Zusammenfassung
Dieses Papier untersucht die Auswirkungen eines russischen Gasembargos auf die Versorgungssicherheit für Erdgas in Europa. Die Studie hat das Ziel, je nach Land mögliche Lieferengpässe zu quantifizieren. Ein besonderer Fokus wird auf die Situation in Deutschland gelegt. Für die Analyse werden verschiedene Szenarien betrachtet, welche sich in der Dauer des Embargos (ein bis neun Monate), in den Speicherfüllständen für den ersten Winter nach der Krise (d. h. am 1.11.2015) und in verschiedenen Mengen an im Krisenfall zusätzlich verfügbarem Flüssiggas (25, 45, 65 bcm) unterscheiden.
Die vorliegende Untersuchung ist eine Simulationsstudie und wurde mit dem Optimierungsmodell TIGER durchgeführt. TIGER ist ein lineares Modell des Europäischen Gasmarktes und berücksichtigt alle Pipelines des Europäischen Fernleitungsnetzes, die Gasspeicher sowie LNG-Terminals. TIGER errechnet in tagesscharfer Auflösung, wo welche Mengen an Gas produziert, transportiert und importiert werden müssen, um den täglichen Gasbedarf in 58 Nachfrageregionen zu bedienen.
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Notes
These countries include the EU−28, Switzerland, Norway, Bosnia/Herzegovina, Serbia, Montenegro and Macedonia. Turkey is also included because of its membership in the NATO. Ukraine and Belarus are only transit countries in this analysis, but not modelled as demand countries, therefore not part of this analysis.
The Polish LNG terminal of Świnoujście is not included in this analysis since the earliest launch is expected not before 2015.
In the extreme scenario of a 9-month disruption, we even assume a lower storage refilling to only 70 %.
Transits through Germany comprise, e.g., gas flows from Russia to Czech Republic via the OPAL pipeline.
The respective peak demand week in February 2015 is derived from the 14-days average scenario by the Ten-Year Network Development Plan 2013–22 (ENTSO-G 2013). We even underestimate the severeness of a cold spell since the model can anticipate the extreme demand. In reality, market participants would not know the demand and would e. g. use storages less appropriately in this event.
OIES (2014) cites an estimation of 162 billion USD derived by Sberbank.
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Acknowledgements
The authors would like to thank Christian Growitsch for suggesting the topic to us. We are grateful to Marc Oliver Bettzüge, Christian Growitsch, Felix Höffler and Timo Panke who provided helpful comments. Furthermore, we like to thank Maria Novikova and Broghan Helgeson for their research assistance. All remaining shortcomings are the authors’ own responsibility.
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Annex: Robustness Check
Annex: Robustness Check
Gas demand obviously is a crucial parameter for the severeness of a Russian gas embargo. Therefore, we include calculations assuming a rather warm and a rather cold winter (lasting from October till the end of March) during a 6-month embargo. In case of the warm year, the heating gas demand is reduced by 10 %, whereas heating gas demand is increased by 10 % in the cold year case. The gas demand for power generation (including “combined heat and power”) is increased or reduced by 5 % in case of a very cold or very warm winter. The assumed demand values can be found in Table 3.
Figure 7 shows the simulation results for selected countries for a gas embargo lasting for six months. As expected, in the cold winter case, the overall supply shortage in Europe is above (48 bcm) that of the reference case (21 bcm) whereas in the warm winter case the opposite is true (14 bcm).
Supply shortfalls during a 6-month embargo assuming a cold and a warm winter (bcm)
Assuming a 6-month embargo of Russian gas during a cold winter, supply shortages will occur, e.g. in France and Italy. Both countries were not affected by shortages in the reference case. In the case of Germany or France, the shortages increase more than the respective gas demand does when assuming a cold winter. One explanation for that finding is that gas demand is also assumed to be higher in other countries; gas supply, such as the import of LNG, is however limited, in particular on a daily basis. The higher the European winter gas demand is, the more stressed becomes the system.
In a 6-month embargo of Russian gas, a rather mild winter would relax the supply situation in many countries such as Germany. Poland and Turkey however would suffer from supply shortfalls even during a mild winter. Although warmer temperatures may reduce gas demand in those countries, alternative supplies will nonetheless miss such that supply shortages cannot be avoided.
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Hecking, H., John, C. & Weiser, F. An Embargo of Russian Gas and Security of Supply in Europe. Z Energiewirtsch 39, 63–73 (2015). https://doi.org/10.1007/s12398-014-0145-9
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DOI: https://doi.org/10.1007/s12398-014-0145-9