Gasunie’s strategy takes into account the opportunities and challenges in the current dynamic gas market and connects these with our mission and vision. We do this from a strong position within Europe as an independent, cross-border gas infrastructure company. This position is based on the quality and the international spread of our asset base. The strong position of the gas trading platform TTF is also important here. During the past few years, Gasunie has built up an extensive network and carved out a strategic position for itself. Through participation in the Balgzand Bacton Leiding (BBL), NEL and Nord Stream, and through the takeover of Gasunie Deutschland, we have placed ourselves at the heart of the most important axis in north-west Europe, which runs from Russia, through Germany and the Netherlands, to the UK.
Europe is the scene of a number of important developments. During the past few years, the European gas market has matured rapidly. Investments in pipelines, gas storage and LNG terminals raised the level of security of supply and services. This particularly applies to the Netherlands and Germany, the markets in which Gasunie is active. In Europe as a whole, there is a tendency for TSOs to work more closely together and for markets to become more tightly linked. In a mature market, competition between gas infrastructure companies (particularly concerning the transit streams) increases, stimulated by the unbundling of integrated energy companies and the rise of new cooperative links. The Dutch government’s Gas Roundabout Strategy has meanwhile been competitively imitated by foreign gas infrastructure companies.
As expected, the production of natural gas in Europe is declining. Domestic production in countries such as the UK and Germany is falling and is gradually being replaced by import gas from, amongst other places, Russia and by LNG from other parts of the world. In due course, production will also decline in the Netherlands, as a result of which the importance of gas from abroad will increase. Gasunie plans to take advantage of this development by being present at all the relevant entry points and transit routes of natural gas in and through Europe. For example, we are present in the entire east-west connection from Russia to the UK.
Changes in the energy mix also require a rapid response. The proportion of sustainable energy is growing, while at the same time the number of coal-fired power stations is increasing. The production of shale gas in the United States means that large volumes of low-priced coal are entering the European market. In the short term, the position of natural gas is therefore uncertain. An effectively working Emissions Trading System (ETS) is essential to stimulate a sustainable energy supply.
As the cleanest of the fossil fuels, natural gas will continue to play an important part in the energy mix of the future. Thanks to its flexible deployability, gas is the ideal partner for renewable energy sources, such as solar and wind, since the fluctuations in the supply of these resources can be quickly evened out. It is important that the gas infrastructure continues to offer sufficient capacity in order to support the transition to a sustainable energy mix. In addition, the proportion of ‘green gas’ (biogas) will increase in the next few years.
Our policy is aimed at dealing with our environment in a responsible manner, and sustainability is one of the principles on which our activities are based. Many of the measures we take are designed to transport natural gas in a safe, reliable and sustainable manner. As far as possible, we wish to limit the effect of our company’s activities on our surroundings (our ‘footprint’) as much as possible, in line with government objectives. In this, we focus on energy efficiency and on lowering emissions. We have reported extensively on this matter in our CSR Annual Report for 2012.
Certain regulatory trends are clearly visible. One is that regulation is shifting from national to European level. Another is that vertically integrated companies are beginning to completely unbundle their network activities. A third trend is the arrival of financial and other parties in the market. Clearly, both the structure of the market and the parties who are operating in it are subject to change.
However, even in a regulated world, Gasunie sees competitive advantages that can be seized and exploited. For example, our customers value a liquid market with competitive tariffs and an easily accessible infrastructure. Gasunie has come up with timely responses to these requirements, by setting up the trading platform TTF, for instance. In addition, partly to improve its cross-border service provision, Gasunie was quick to carve out a significant international position for itself.
The gas supply can also be made more sustainable by producing green gas and feeding it into the network. This makes a direct contribution to the realisation of the Dutch government’s climate targets, and fits in with the current rapid development of the market for green gas. Gasunie’s extensive experience in blending and accommodating different qualities of gas to form a reliable and stable gas supply can also be used to enable the incorporation of sustainable green gas into the network and the energy mix. In fact, we are already actively involved in a number of projects aimed at increasing the proportion of green gas in the energy mix.
In 2012, we continued our efforts to make energy supply more sustainable by stimulating innovative developments, including the development of power-to-gas. Power-to-gas is a highly promising development, whereby surplus electricity – generated by solar parks and wind farms – is stored in the form of hydrogen. This gas could be transported in our network. Gasunie Deutschland is currently actively looking for partners with whom to further develop power-to-gas in 2013.
LNG in mobility
There is a growing realisation that LNG can contribute significantly to making energy use more sustainable. LNG is a cleaner fuel than diesel for road freight and shipping, and has strong growth potential. The Gate terminal is well positioned to play a key role in facilitating the distribution of LNG through its distribution and transshipment facilities. Gasunie and Vopak already have far-advanced plans to build an LNG Break Bulk terminal next to the Gate terminal on the Maasvlakte. The aim is to offer a bunkering and a reloading facility for small-scale LNG for the benefit of road freight.
In the future, the transport sector will be facing increasingly stringent regulations on the use of polluting forms of fuel and diesel. LNG will then offer a clean alternative, as trucks running on LNG produce much less CO2, emit no sulphur compounds or fine particulate matter, and are much quieter. Together with the Energy Valley Foundation and several other parties, Gasunie is taking part in the National LNG Platform. The specific goal of this organisation is to have at least 50 inland waterway vessels, 50 sea-going vessels and 500 freight vehicles running on LNG in 2015. This project is being supported by the Dutch government as part of its ‘Green Deal’ programme to encourage environmentally friendly projects.
CO2-neutral gas supply in 2050
Gasunie and two other independent European gas infrastructure companies – Energinet.dk in Denmark and Fluxys in Belgium – have set themselves the target of achieving CO2-neutral gas provision in the year 2050. They believe that their gas infrastructure can play a useful part in developing a low-carbon economy in Europe. The way in which this happens may differ from company to company, depending on the specific energy situation in each country and the set of options chosen. In the first instance, Gasunie will focus on green gas, power-to-gas and small-scale LNG as providing the promising routes forward.