Biomethane and the Biomethane and the European gas infrastructureEuropean gas infrastructure

EBA Workshop3 September 2015

Thierry DeschuyteneerExecutive Secretary

Who is GIE?

Gas Infrastructure Europe (GIE) is an European non-profit lobbying association representing the sole interest of the infrastructure industry in the natural gas business

GIE was formally established on 10 March 2005 as a legally independent and non-profit lobbying association with official statutes

GIE has currently 67 members in 25 European countries

GIE voices the views of its members vis-à-vis the European institutions, regulators and other stakeholders

GIE mission is to actively contribute to the construction of a single, sustainable and competitive gas market in Europe underpinned by a stable and predictable regulatory framework as well as by a sound investment climate

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Who is GIE?

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GIE is the umbrella organization for its three subdivisions:

GTE – Gas Transmission Europe representing Transmission System Operators (TSO)

GSE – Gas Storage Europe representing Storage System Operators (SSO)

GLE – Gas LNG Europe representing LNG Terminal System Operators (LSO)

GIE Key Messages

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Enabling a single European MarketGIE contributes to develop the regulatory framework for natural gas in Europe in a transparent and proactive manner. Our main objective is regulatory stability and predictability; the essential prerequisites for a sound investment climate

Ensuring a backbone for secure suppliesGas infrastructure is the backbone ofthe energy supply chain from producer to end-user. Transmission pipelines, storage facilities and LNG regasification terminals are among the physical elements of the gas system which ensure that gas is delivered to customers where and whenever needed

Building the EU energy futureCompetition, security of supply and sustainability, main lines of the EU’s energy policy. GIE members adhere to the EU energy objectives and continuously pursue technologically advanced solutions to achieve energy policy goals with the highest safety and efficiency

Contributing to a competitive low-carbon European UnionNatural gas has proven to be the cleanest fossil fuel. Gas utilization can reduce CO2 emissions and therefore to contribute to the “20-20-20” policy. As the past decade has shown, the increased share of natural gas in the European energy mix has led to a significant CO2 reduction in Europe

Gas value chain…

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Production

LNGliquefaction

LNGregasification

Transportation

Storage

Distribution

End-user

LNGshipping

• Residential• Industry• Electricity generation• Transport (CNG)

• Seasonal storage• Short-term storage• Peak shaving

pipeline

End-user

• Industry• Transport (LNG)

… and biogas / biomethane

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Production

LNGliquefaction

LNGregasification

Transportation Distribution

End-user

LNGshipping

• Residential• Industry• Electricity generation• Transport (CNG)

pipelineBiogas:

direct use

Biomethaneinjection

Biomethaneinjection

Biomethaneliquefaction End-user

• Industry• Transport (LNG)

Storage

• Seasonal storage• Short-term storage• Peak shaving

Advantages and drawbacks

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Advantages Drawbacks

Biogas: direct use +Cheap (CHP) – Supply limited to demand

– No connection with market place

Biomethane: injection in distribution grid

+Bigger demand base+Access to market place

– Upgrade to distribution gas quality → costly

– Supply limited to seasonal demand

Biomethane: injection in transmission grid

+Enables seasonal storage

+Integration with European Internal Gas Market

+Enables cross-border trading

– Compression to transmission pressure → costly

– Upgrade to transmission gas quality → more costly

Biomethane: liquefaction

+Decarbonisation of transport sector (trucks, inland waterways)

– Liquefaction after gas quality upgrade → very costly

Technical conditions for biomethane injection in transmission grid

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Interconnection Point• Piping, valves, pressure/flow regulation, safety requirements• Metering, odorisation (if required)• Gas quality monitoring and injection control

Physical characteristics• Pressure (typically 4-80 bar), temperature

Chemical characteristics• Gas quality: O2, CO2, H2, H2S, Wobbe index• Additional requirements possible in case of underground storage• National gas quality specifications may not allow biomethane to flow to

neighbouring countries

Market conditions for biomethane injection in transmission grid

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Administrative measures• Third Party Access (Network Codes): capacity booking, nominations,

allocations• TSOs operate entry/exit access regime (Third Energy Package):

impossible to distinguish biomethane from natural gas once on the network→ biomethane can be traded on Virtual Trading Points→ same balancing rules→ same interoperability rules→ biomethane can physically flow across borders (if right gas quality)

Common European market for biomethane?• Separate trading platform for biomethane (certificates),

independently from physical flows?• How to trade biomethane (certificates) between countries?• Need for some harmonisation of national rules regarding

certificates?

Contributing to a low-carbon economy: Natural gas as transport fuel

Switching to natural gas will deliver not just CO2 emissions reductions but also significant air quality benefits for

citizens, with lower NOX emissions, lower SOX and few particulates

Source: NGVA

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Thank you for your kind attentionThank you for your kind attention

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