ENTSOG GRIP South - Main Report

900 TWh/y

by country

\\ In the case of Portugal, the differences between the current demand scenarios and thosepresent- ed in the TYNDP 2013–2022 are not significant inbothconventional andpower generation sector. In the Conventional sector, the current scenarios are slightly higher because of CHP. In this partic- ular case new information about the specific con- sumption of cogenerations equipment has led to anupward revision in demand scenarios.

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0

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France

Portugal

Spain

TYNDP 2013–2022

Figure 3.13: Yearly conventional demand by country – TYNDP 2013–2022 vs. GRIPs. France, Portugal, Spain and the South Region

Gas for power generation

Gas consumption for power generation has slowed down significantly in the South region for the second half of 2011. There are some factors that affect the whole South Region that explain the signifi- cant drop of natural gas consumption for power generation: 1. LNGworld prices: The increase of LNG demand in the world causing high LNG prices, had also driv- en changes in the electricity generation. For example, shippers, operating in both electricity andgasmarkets andoptimizing their global benefit, are reducing thegas- fired power plants production in Spain favouring alternatives fuels.

2. Increase of coal generation, due to several factors: \\ Lower cost of generation with coal than with gas: The production of shale gas in theUS is skyrock- eting. Supply and demandbalance of natural gas is eased significantly and the price sagged to one quarter of the last highest level recorded four years ago.Wider use of natural gas inpower gen- eration has been seen due to the drop in natural gas price. So substitution between natural gas and coal becomes significant when relative price of natural gas to coal is lower than a certain level. Under the current situation, the impact of shale gas revolution, the surplus coal substituted by natural gas in the US, is exported to Europe, that has increased coal power generation due to low coal price ledby imported coal of US origin and low CO ² price. Strong correlation between coal-gas in US and EU can be appreciated in Figure 3.14. \\ Carbon dioxide emission price: CO ² prices has fallen down to the lowest ever, mainly due to the decrease of the industry, which benefits coal production in Europe as well.

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1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 0

EU gas consumption US gas consumption

EU coal consumption US coal consumption

Figure 3.14: EU–USA gas coal correlation (inmillion tonnes oil equivalent)

ENTSOG–GRIPSouth 2013–2022 |

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