ENTSOG Gas Regional Investment Plan (GRIP) 2017 - 2026 / Southern Corridor / Main Report

3.2 Annual Demand Breakdown

Figure 3.4 shows the annual demand breakdown of the Southern Corridor Region for the last seven years together with their percentage evolution. The chart is broken down into Final (Residential, Commercial, Industrial & Transport) demand com- pared to Power Generation demand. We may see the downward trend that prevailed in the last five years, mainly in the Power Generation sector. On one hand cheap coal combined with low carbon prices from the EU Emission Trading Scheme (ETS) have made it, during part of this period, attractive to make use of coal fired instead of gas fired power plants. On the other hand, progression of Renewable Energy Sources (RES) may have reduced overall demand of Gas for power generation although they support the role of CCGTs in the stability of electrical systems due to the high inter- mittency of power production from RES. However this downward trend was reversed in 2015 due to the decrease of the oil price which, to some extent led to a decrease of gas price. This reversal was confirmed also in 2016 and similar positive consump- tion patterns have been detected also in the first part of 2017. Gas demand is also expected to be increased due to the phasing out of nuclear plants and the pressure to reduce pollution from coal fired plants. Bio-methane is one more promising factor for the longer term.

1,600 1,400 1,000 1,200 TWh/y

+6.46%

-3.84%

-4.81%

-6.50%

+4.72%

+7.25%

-11.92%

-10.52%

-18.29%

26.67%

+4.75%

-2.64%

-23.75%

+14.80%

+19.48%

26.98%

25.59%

27.16%

26.85%

23.04%

23.30%

20.54%

73.33%

73.02%

74.41%

72.84%

800

73.15%

76,96%

76.70%

79.16%

600

+9.09% -4.28%

-2.85%

-2.97%

-8.81%

+1.65%

+2.76%

400

200

0

2009

2010

2011

2012

2013

2014

2015

2016

Final

Power generation

Figure 3.4: Evolution of Southern Corridor yearly demand in the period 2009 – 2016 and its breakdown

The historical data in figure 3.5 illustrates, that annual temperatures and economic downturn also heavily influence gas demand. This is due to the high percentage of households (in most countries) that rely on gas for heating, as demand increases when outdoor temperatures decrease. Since annual weather conditions cannot be forecasted, such extremes are not included in annual demand forecasts. In the same way, economic growth rates can only be reasonably assumed during forecast- ing, without the possibility to anticipate negative or positive unexpected shocks. This should be borne in mind when comparing actual data and forecasts.

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Southern Corridor GRIP 2017–2026