ENTSOG Gas Regional Investment Plan South 2017 - Main Report

2.2 Challenges for the

European Gas Market

Gas consumption in Europe shows a declining general trend due to the impact of the reduced economic growth, the loss of competitiveness of gas compared to coal, increased energy efficiency and the development of renewable energy. However, due to the climate conditions and an increase in electricity production from gas, there was a slight increase of total gas demand in South Region in 2015 and 2016. The current worldwide context, with the LNG price convergence in Europe, United States, and Asia shows that currently there are less opportunities for European ship- pers to re-export LNG to other locations than previously. However, this does not mean that in the future there will be no opportunities to re-export LNG from Europe to other continents. The implementation of decisions adopted with regards to energy efficiency and the development of renewable energies may continue to impact the use of natural gas in the medium term, but as was stated in the above worldwide context section 2.1, natural gas has interesting opportunities in future worldwide and European energy mix, such as coal phase out, transportation, and complementing intermittent renew- ables. Europe has developed several energy strategies, namely: the 2020, 2030 and 2050 Energy Strategies and the Energy Security Strategy. Of those European strategies, we highlight the objectives for the gas sector: \\ The multi dimension Energy Union and Climate Strategy, made up of five closely related and mutually reinforcing dimensions, including: supply security, solidarity and trust; achieving a fully-integrated internal energy market; energy efficiency; climate action; and research, innovation and competitiveness. The implementation of the Gas Target Model promoted by the European Commis- sion continues with the adoption of regulations to achieve European integration. \\ The LNG and Storage Strategy aims to exploit the potential of liquefied natural gas (LNG) and gas storage to make the EU gas system more diverse and flexible, thus contributing to the key Energy Union objective of a secure, resilient and competitive gas supply. Aware of the major financial constraints and significant economic stakes presented by energy issues, the European Commission is encouraging project promoters to perform cost-benefit analyses to determine which projects are the most promising within the framework of the “Projects of Common Interest” process.

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