Security of gas supply, 2018: Early Warning was declared to ensure the high Danish security of gas supply | Energinet

Security of gas supply, 2018: Early Warning was declared to ensure the high Danish security of gas supply

Published 5.12.2018 15.01
Energinet’s yearly report shows that the Danish security of gas supply remained high in 2018 despite of a late cold spell in Europe in early spring which triggered an Early Warning for 20 days.
North-western Europe was struck by a biting cold coming from Siberia in early spring 2018 which more than tripled the European gas prices. Due to the high gas prices a worrying volume of gas was leaving Denmark towards Germany in February. This affected the gas system balance and increased the risk of reaching Energinet’s Emergency gas storage due to the high withdrawal from the gas storage facilities.

To prevent a decrease in the security of supply, Energinet Gas TSO chose to declare Early Warning 27 February 2018 at 20:38. Early Warning is the first of three crisis levels in the EU-regulation for security of gas supply. It is a rare situation, which has only occurred twice in the Danish gas system’s history. The Early Warning situation did not lead to interruption of the gas customers.

- Energinet’s cooperation with the gas market players during Early Warning meant that we brought attention to the Danish security of gas supply. The gas market players are responsible for supplying the Danish gas customers with enough gas which is something that requires special attention when the gas production from Tyra closes from 2019 till 2022 and our work in 2018 can be seen as an instructive rehearsal for some of the challenges we face in the coming period, says Torben Brabo, CEO in Energinet Gas TSO. 


The price cap was removed 
The reason for gas leaving Denmark was a cap over the price paid by the market players for taken more gas out than they delivered to the system. The price cap was lower than the market price for gas which gave the shippers an incentive to transport more gas from Denmark to Germany than they had to their disposal.

The Early Warning allowed Energinet to remove the price cap temporary, which instantly eliminated the economic incentive to export gas out of the country and the level for the Danish security of gas supply was stabilized. Energinet has asked the Danish Utility Regulatory permission to remove the price cap permanently.


Security of supply during the Tyra redevelopment
The Tyra field’s facilities have been the primary source of supply to the Danish and Swedish gas customers since 1987. The security of supply is therefore challenged when Tyra closes down from September 2019 to July 2022. During this period the gas will come from Germany and the gas storage facilities, and the security of supply will to a higher degree than normally depend on the market players utilizing import and storage capacities optimally. Denmark will thus depend on imported gas for the first time in the system’s history.

Energinet has prepared for the redevelopment of Tyra the last couple of years and has in that respect begun to implement a number of market and system initiatives. The initiatives include i.a. continuous surveillance of the supply situation, information to the market and expansion of the withdrawal capacity in one of the Danish gas storage facilities. Cooperation and communication with the market players becomes more important in the coming period than before.


The report’s content
In the Security of Gas Supply Report 2018 you can read more about Early Warning, the Tyra redevelopment, the Baltic Pipe Project, new tasks in relation to the European security of gas supply and much more.
 
About the report
Energinet Gas TSO is responsible for safeguarding the security of supply and surveils the security of supply in Denmark. According to the Danish Executive Order on Maintaining Security of Natural Gas Supply Energinet shall prepare a security of gas supply report to the Danish Energy Agency.
Security of gas supply in the coming years
Energinet cooperates continuously with the market players to maintain the high security of gas supply in the coming years during the redevelopment of Tyra. This includes i.a. a strengthening of market and system initiatives and continuous analysis of the filling degree of the gas storage facilities.