Gas: Updated balancing model will help to keep the balance from 2022
A new natural gas pipeline will connect the Danish, Norwegian, and Polish gas transmission systems. The Danish transmission system is expected to transport 3-4 times more gas in moving forward. New models are thus needed to regulate the Danish natural gas market in the future.
The balance in the natural gas transmission system is regulated through a balancing model. Shippers—companies transporting gas through the system—are responsible for maintaining the balance. They do this by balancing the amount of gas they take out of the system against the amount of gas they inject. At the end of the gas day, shippers who are not in balance must rebalance themselves by buying or selling gas. This model incentivizes the market to stay in balance, thus minimizing the intervention needed from Energinet. This also increases the liquidity of the wholesale market.
Baltic Pipe introduces new challenges
The Baltic Pipe project is a collaboration between Energinet and the Polish gas transmission system operator GAZ-SYSTEM S.A. to establish a new pipeline connecting the Danish, Norwegian, and Polish gas systems. The new pipeline, which is expected to be operational from October 2022, entails that Denmark becomes a gas transit country. An estimated 3 to 4 times as much gas will be transported through the extended system compared to now. The current balancing model regulates the shippers when the gas day is over. With the increased load resulting from Baltic Pipe, Energinet must transition to a model, where the system’s total imbalance is limited on an hourly basis.
New model must regulate every hour
Energinet Gas TSO and the Department for Innovation and Digitalization have throughout January and February developed a proof of concept for an updated balancing model that can regulate shippers on an hourly basis. A major challenge with the new model is that Energinet currently does not receive consumption data every hour. It has thus been necessary to estimate consumption using data from Energinet’s metering stations combined with a digital prognosis model. “Although the results from the proof of concept show potential, they have also helped shed light on some of the challenges we face with the current data landscape,” says project manager Julie Frost Szpilman.
The developed proof of concept is just one suggestion for what the updated balancing model could look like when Baltic Pipe is put into operation. The balancing group in Energinet Gas TSO will now spend the coming months evaluating the results and investigating, whether it is possible to increase the amount of data collected from the Danish gas distribution company, Evida, and the Swedish gas TSO, Nordion Energi, or whether an entirely different model is necessary instead.
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