Baltic Energy Market Interconnection Plan GRIP 2017

Even though there is a high number of investment projects in the region, it is not ful- ly supported by the gas demand forecasts. In most of the states gas demand is ex- pected to diminish, Poland being the only one forecasting high growth in gas de- mand. The EU’s strategy for gas markets supports the investments to enhance diversification and market integration, increase the security of supply and reduce the carbon dioxide emissions, but overall, investments in decreasing markets cre- ates a challenging situation for the investors and therefore the financial support from the EU is crucial. Parallel to the investments in infrastructure in gas grid, the devel- opment of gas market in off-grid area is developing well. In Sweden and Finland the gas market has been developing rapidly in biogas sector and creating the off-grid LNG infrastructure. This development challenges the traditional grid based gas in- frastructure and at the same time enhances the decarbonisation process by biogas use. In addition, Poland saw a number of market developments taking place after the LNG terminal in Świnoujście entered into commercial operations in 2016. In general, the regional gas market is in a changing situation, especially in the Eastern Baltic region where implementation of the common market zone by 2020 is under preparation. Construction of the Balticconnecor and enhancement of interconnections between three Baltic Countries and flexibility of Inčukalns UGS in Latvia are essential for development of the functioning joint Baltic and Finnish gas market with the possible single entry-exit zone. The infrastructure projects that in- crease gas security of supply and create more competition may well have a positive effect on conditions for market development (gas demand) in the future. In general, the use of gas instead of other fossil fuels will help EU member states to achieve their decarbonisation targets that can be seen as one driver of gas demand growth in Poland as well. New investments are also planned to foster market competition, decrease gas prices and subsequently increase affordability of natural gas as a fuel on the markets. Furthermore, the use of biogas and LNG either via the gas grid or in offgrid locations is also growing and will support the positive decarbonisation devel- opment as well.

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BEMIP Gas Regional Investment Plan 2017