Annually, Energinet reports on Denmark’s security of gas supply. The report is aimed in part at the Danish Energy Agency, but also communicates key messages to stakeholders in the gas sector. The report describes the security of gas supply situation over the past year, and expectations for security of gas supply in the coming winter. It looks no further into the future than this. The report is primarily based on historical data and analyses for the future.

Gas storage at low levels
After the 2021/2022 winter, the European gas storage facilities were at low levels. This was due to a cold winter, and the fact that the storage facilities were not full ahead of the winter. There was therefore a focus on security of gas supply even before Russia invaded Ukraine in February 2022.

Russia has since stopped supplying north-western Europe with gas, which has led to high gas prices. The sabotage carried out against Nord Stream 1 and 2 in September 2022 left the gas market with the expectation that Russia will not export natural gas to the EU in future either.

The gas year began in October 2021 and ran for 12 months. The average price of natural gas for the entire gas year was approx. EUR 125/MWh, which is 5-6 times higher than the historical average. The highest gas price was EUR 320/MWh on 30 August 2022.

The rising gas prices have led to a shift away from gas among gas consumers. Historically, gas consumption during the 2015-2020 period has been steady at approx. 30 TWh/year (after correcting for weather), but is expected to be only 21.8 TWh in 2022. In 2030, gas consumption is expected to have dropped to 13.8 TWh, and Denmark’s total gas consumption is expected to be fully met by biogas at this time.

The rising gas prices have contributed to an increase in biogas production. Biogas accounted for approx. 22% of Danish gas consumption in 2021, but is expected to exceed 30% at the end of 2022.

Baltic Pipe reached full capacity
The Baltic Pipe gas pipeline, which supplies Poland with Norwegian gas via Denmark, opened in October 2022. Baltic Pipe initially opened with reduced capacity, but reached its full capacity of 10 billion cubic metres of gas per year in November 2022. The construction work has taken three years. After a very intense process, the project has been completed, and this new infrastructure improves security of supply in Poland and in countries connected to Poland by gas pipelines. Baltic Pipe is also contributing to security of supply in Denmark during the energy crisis, brought in part upon Europe due to Russia’s invasion of Ukraine.

To replace the supplies of gas from Russia, larger volumes of LNG are being imported. LNG cannot fully replace Russian gas over the 2022-2023 winter. The EU therefore ordered member states to ensure the European gas storage facilities were full at the beginning of winter 2022. The gas storage facilities, in combination with LNG, mean the European market is well prepared for the winter.

If the 2022/2023 winter has average temperatures, the EU and Denmark are expected to get through the winter without gas supply failures. However, if the winter becomes extremely cold, there will be a risk of gas shortages in the EU.

Emergency storage
Total capacity of 7.5 GWh was sold in the two Danish gas storage facilities, Stenlille and Lille Thorup, in 2021/2022. Of the capacity sold, 3.8 GWh was emergency storage, and the remaining 3.7 GWh was sold for commercial use. Emergency storage is brought into play if a Danish gas supply crisis arises. The commercial volume (around half of the capacity sold) will not necessarily contribute to Danish security of supply, as commercial customers can freely decide how to use of their capacity.

Depending on the winter, gas storage facilities could be close to empty at the end of the winter. If gas storage facilities are empty at the end of winter, it will be a challenge to fill the gas storage facilities to a similar level during the summer in preparation for winter 2023/2024.