German Transmission System Operators present the Network Development Plan (NDP) Gas 2020-2030 to the German Regulatory Agency (Bundesnetzagentur) today. Despite immense uncertainties the NDP includes new pipeline development for almost 9 billion euros. However, for the first time there is also a new instrument to network developing that helps controlling uncertainties and avoiding higher investments by an effective use of existing transport and storage infrastructure: Market Based Transportation Services.
„We’re quite worked up by the current draft of the Network Development Plan that holds investments of almost 9 billion euros for conventional network expansion inspite of increasing uncertainties,” Sebastian Bleschke, Management Director of the Initiative Erdgasspeicher (INES), comments the new NDP.
Recent developments have led to even higher uncertainties regarding network development. Among them are:
Sebastian Bleschke explains: „Looking at all the uncertainties we need a paradigm shift for gas network development. We should substitute rigid and irrevocable network expansion by flexible instruments to avoid large investments using existing transport and storage infrastructure. Developing a market for Transportation Services can contribute massively here.”
On a market for Transport Services market participants offer flexible market-based instruments that System Operators use to substitute conventional network expansion. Currently they are discussed especially against the background of the merging German gas market areas in 2021. The product of choice is a so-called spread product. To transport gas from the North to the South, for example, Transmission System Operators could dispose of gas that they must take up in the North on the market. However, to fulfill the transportation need, gas that is already in the South is then acquired on the market. This way, gas is transported from the North to the South without an actual transportation along the pipeline network. That means for this transportation there is no need to build additional gas pipelines. If a transportation need is discontinued in the future market-based instruments can be adapted flexibly. Network expansion, however, could not be revoked.
„There are plenty of market-based instruments. They offer an outstanding opportunity to solve challenges imposed upon network development in a constantly changing environment. The market for Transportation Services that is currently designed to address issues regard the merging market areas should therefore be established as a permanent instrument of network development,” Sebastian Bleschke says.