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Latvian gas market in transition – challenges of Incukalns Underground Gas Storage

机译:拉脱维亚天然气市场正在转型– Incukalns地下天然气储存所面临的挑战

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OverviewOn 3 April 2017 Latvia liberalized its natural gas market. All consumers can freely choose their suppliers and allsuppliers can freely deliver gas to their customers. Household customers can still benefit from the regulated tariff. Tosolve the inherent conflict of interests and to ensure security of supply Latvia opted for full ownership unbundling.The first step was legal unbundling. By the end of 2016 the vertically integrated undertaking JSC “Latvijas Gaze”was divided in two legal units. The newly established enterprise JSC “Conexus Baltic Grid”, responsible fortransmission and storage, was separated from JSC “Latvijas Gaze” which kept their responsibility for trade anddistribution. The second step was full ownership unbundling that is work in progress.Baltic countries do not have their own natural gas resources except biogas of minor importance, which means thatalmost all gas consumed is imported. Latvia has the only gas storage facility in the Baltic region – the Incukalnsunderground gas storage facility (further IUGS). It is an aquifer reservoir with a working capacity of 2.3 billion m3.Storage capacity is at least 200% of average winter natural gas consumption. Historically IUGS played a significantregional role in gas supply, gas has been injected into IUGS seasonally, ensuring winter supplies for Latvia, Estonia,and the St. Petersburg region of Russia. IUGS costs were regulated and covered by all consumers proportionally totheir consumption. In 2015 Lithuania built Klaipeda LNG, afterwards the role of IUGS in the regional gas supplysystem has diminished and its future importance is still uncertain. Under the national legislation IUGS has theregulated third-party access regime. This storage facility is also an integral part of the transmission system beingresponsible for the pressure in the system. National security of supply measures in the region concerning gas suppliesare limited, namely minimum mandatory strategic storage reserves are defined for Latvia and Lithuania, butmandatory strategic storage reserves have not been introduced.Currently IUGS must compete with pipeline gas deliveries in the face of steadily declining local and regionalconsumption. While the new storage tariff is in the approval phase, the storage operator applies the storage tariffapproved in 2008 and reapproved on 13 April 2017. In order to adapt to the new market situation in the summer of2017 JSC “Conexus Baltic Grid” as the transmission operator organized an auction to ensure that gas volumesinjected into the storage will deliver withdrawal capacity sufficient to meet technical requirements or namely therewill be sufficient pressure to ensure potential peak demand in winter. By the end of 2017 the system operator hassubmitted new storage tariff and transmission tariffs to the Regulator for approval. While discussions on productsand pricing level is forthcoming between all stakeholders, there is an understanding that the storage services shouldbecome more flexible regarding products and prices.IUGS has a challenging future as there is an intent to create a regional gas market including the Baltic region andFinland by the end of 2019 when the appropriate infrastructure will be in place. Commissioning of Finish – Estoniangas interconnector (Balticconnector) in 2019 could trigger a need for storing additional volumes as well as new typeof products or services. At the same time the outlook for the long term perspective is more challenging consideringpotential competition with Polish storage facilities after Gas Interconnection Poland – Lithuania (GIPL)commissioning in 2021 and the development of existing and new LNG facilities in the Baltic region. Thus, thestrategy of developing different products and pricing them is crucial for IUGS to succeed in the business.The purpose of this paper is to examine the main drivers affecting competitiveness of IUGS considering emergingfree market challenges.MethodsFor the purposes of this paper qualitative methods such as an analysis of different factors and interviews with gasmarket stakeholders, are applied depending on the focus area. Data on regional statistical data regarding gas and theelectricity sector will be used, including consumption trends. Trading data from gas and electricity spot markets willbe analysed, for example Gaspool, GetBaltic, NordPool to investigate the latest market developments. Secondarydata from companies accounts will serve as supporting justification.As storages have a potential to ensure multiple functions the research will cover the following underlying factors ofthe storage business:11. seasonal flexibility needs: storage may be used by a gas supplier to balance its portfolio to fulfil its clients’consumption seasonal swings;2. short-term flexibility/balancing needs: need to have flexibility in order to respond to short term variations indemand; storage, being close to consumption areas, may be used by a gas supplier to adjust supply promptlyto short term changes in its clients’ consumed quantities (for example due to an extra-ordinary cold snap).3. willingness to exploit trading opportunities emerging from short term price volatility or seasonal pricespreads (the “price gain” from storage);4. insurance against the risk of supply disruptions, with a view to ensure security of supply for end users evenin emergency situations;5. insurance against the risk of market price spikes, with a view of containing total gas procurement costs;6. security of supply needs: a producer may use storage to ensure the transport of gas over long distancesagainst the risk of en route disruptions;7. system “safety” needs: a TSO may use storage for some of its balancing needs;8. mandatory security of supply requirements.The drivers will be analysed from different perspectives – the legal perspective attempting to analyse the effect ofdifferent legal acts and regulations on IUGS; security of supply perspective determining regional policies to ensuresecure supplies; technical perspective discovering specifics of regional consumption, the role of IUGS in ensuringtechnical security of supply and delivering balancing functions, commercial perspective aiming to analyse historicaldevelopment of demand for storage services under monopoly conditions and after market liberalization from onehand and to identify and evaluate business strategies of the largest stakeholders in relation to IUGS services underdifferent IUGS service pricing from the other hand. The summary of factors affecting IUGS of possible IUGSstrategies and outcomes will be presented.ResultsThe findings of this paper will deal with the analysis of the current strategy of IUGS owners of passing all costs toend consumers via increasing tariffs and reallocating some of the costs to TSO tariffs, that might considerably reducedemand for IUGS services and further reduce attractiveness of gas as a commodity.ConclusionsThe main drivers affecting competitiveness of IUGS considering emerging free market challenges are (1)commercial interests of market stakeholders (e.g., gas injection during the cheaper summer period and gas off-takeduring expensive winter period), (2) short-term balancing purposes, (3) security of supply for the region especiallyduring the winter period when peak demand occurs.
机译:概述 2017年4月3日,拉脱维亚放开了天然气市场。所有消费者都可以自由选择他们的供应商,所有 供应商可以自由地向其客户输送天然气。家庭用户仍然可以从规范的关税中受益。到 为了解决固有的利益冲突,并确保供应安全,拉脱维亚选择了完全所有权捆绑。 第一步是法律捆绑。到2016年底,垂直整合的股份公司JSC“ Latvijas Gaze” 被分为两个法律单位。新成立的企业股份公司“ Conexus Baltic Grid”,负责 传输和存储与JSC“ Latvijas Gaze”分开,后者负责贸易和运输。 分配。第二步是将所有权完全分离出去,这是正在进行的工作。 波罗的海国家除了重要性不大的沼气以外,没有自己的天然气资源,这意味着 几乎所有消耗的天然气都是进口的。拉脱维亚拥有波罗的海地区唯一的储气库-Incukalns 地下储气库(进一步的IUGS)。它是一个蓄水能力为23亿立方米的蓄水层。 存储容量至少是冬季平均天然气消耗量的200%。从历史上看,IUGS发挥了重要作用 在天然气供应中发挥了区域性作用,天然气已按季节注入IUGS,以确保向拉脱维亚,爱沙尼亚, 和俄罗斯的圣彼得堡地区。 IUGS成本由所有消费者按比例调节和支付 他们的消费。 2015年,立陶宛建造了克莱佩达(Klaipeda)液化天然气,此后IUGS在区域天然气供应中的作用 该系统已经减少,其未来的重要性仍然不确定。根据国家法律,IUGS具有 受监管的第三方访问制度。该存储设施也是传输系统不可或缺的一部分, 负责系统中的压力。该地区有关天然气供应的供应措施的国家安全 是有限的,即为拉脱维亚和立陶宛定义了最低强制性战略存储储备,但是 尚未引入强制性战略存储储备。 目前,面对当地和区域的不断下降,IUGS必须与管道输气竞争 消耗。当新的存储费率处于批准阶段时,存储操作员将应用存储费率 于2008年获得批准,并于2017年4月13日重新获得批准。 2017年,JSC“ Conexus Baltic Grid”作为传输运营商组织了一次拍卖,以确保天然气量 注入存储库将提供足以满足技术要求的提款能力,即 将有足够的压力来确保冬季潜在的高峰需求。到2017年底,系统操作员已 向监管机构提交了新的存储费率和传输费率以供批准。在讨论产品时 并且所有利益相关者之间的定价水平即将到来,人们了解到存储服务应 在产品和价格上变得更加灵活。 IUGS的未来充满挑战,因为有意建立包括波罗的海地区和 到2019年底,芬兰将建立适当的基础设施。完成调试–爱沙尼亚语 2019年的天然气互连器(Balticconnector)可能会引发对存储更多体积和新型容器的需求 产品或服务。同时,考虑到长期前景,更具挑战性 波兰–立陶宛天然气互连后,与波兰储存设施的潜在竞争 于2021年进行调试,并在波罗的海地区开发了现有和新的液化天然气设施。就这样 开发不同产品并为其定价的策略对于IUGS在业务中取得成功至关重要。 本文的目的是研究影响IUGS竞争的主要驱动因素 自由市场的挑战。 方法 出于本文的目的,采用定性方法,例如对不同因素进行分析以及对气体进行访谈 市场利益相关者的应用取决于重点领域。有关天然气和天然气的区域统计数据的数据 将使用电力部门,包括消费趋势。来自天然气和电力现货市场的交易数据将 进行分析,例如Gaspool,GetBaltic,NordPool调查最新的市场发展。次要的 公司帐户中的数据将作为佐证。 由于存储具有确保多种功能的潜力,因此该研究将涵盖以下潜在因素: 仓储业务:1 1.季节性灵活性需求:天然气供应商可能会使用存储来平衡其产品组合以满足客户的需求 消费季节性波动; 2.短期灵活性/平衡需求:需要具有灵活性,以应对短期变化。 要求;天然气供应商可以使用靠近消耗区域的存储来及时调整供应 客户消费量的短期变化(例如,由于异常冷态引起的)。 3.愿意利用短期价格波动或季节性价格产生的交易机会 价差(来自存储的“价格收益”); 4.防止供应中断的风险,以确保最终用户的供应安全 在紧急情况下; 5.防止市场价格暴涨的风险,以控制天然气的总采购成本; 6.供应需求的安全性:生产商可以使用储存库以确保长距离运输天然气 防止途中受到干扰的风险; 7.系统“安全”需求:TSO可以使用存储来满足其一些平衡需求; 8.强制性的安全供应要求。 将从不同的角度分析驱动因素–法律角度试图分析 有关IUGS的不同法律法规;供应安全角度确定区域政策以确保 安全物资;从技术角度发现区域消费的细节,IUGS在确保区域消费方面的作用 供应和交付平衡功能的技术安全性,旨在分析历史的商业角度 垄断条件下以及市场自由化后对存储服务需求的发展 并确定和评估与IUGS服务相关的最大利益相关者的业务策略 另一方面,IUGS服务的定价也不同。影响可能的IUGS的IUGS的因素摘要 将介绍策略和结果。 结果 本文的研究结果将涉及对IUGS所有人将所有费用转嫁给IUGS当前策略的分析。 最终消费者,通过提高关税并将部分成本重新分配给TSO关税,这可能会大大降低 对IUGS服务的需求,进一步降低了天然气作为商品的吸引力。 结论 考虑到新兴自由市场的挑战,影响IUGS竞争力的主要驱动力是(1) 市场利益相关者的商业利益(例如,在较便宜的夏季注气和取气) 在昂贵的冬季期间),(2)短期平衡目的,(3)特别是该地区的供应安全 在出现高峰需求的冬季。

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