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energate Gasmarkt Issue 11|2020

Topic of the month: L-gas supply

Dr. Heiko Lohmann Dr. Heiko Lohmann

In this edition I will be pestering you with EEG, BEHG and BImSchG, all are laws. It’s annoying but necessary, and demonstrates that gas is arriving where power has been for years: in a realm that is strongly determined by politics and legal requirements. Four years ago, I showed in a presentation the different price components for the power and gas supply of an industrial user. Assuming that the industrial user is not entitled to any exemption or reduction of levies, duties and network tariffs, the share of the price influenced by the legal framework was 75 per cent for the power supply and 25 per cent for the gas supply. The headline of the slide was “the gas market is functioning”. But if natural gas evolves to renewable gases/hydrogen, the influence of politics will of course be stronger. A CO2 reduction must be “enforced” politically, and renewable gases will not be competitive without any support.

But the question is – and in the power sector it has been the question of the last 20 years – how detailed the framework must be designed. Whether the micro-interventions are necessary or not is an interesting discussion. In this edition, the example of the draft for the “Act for the Evolution of the Greenhouse Gas Reduction Quota (GHG-quota)” (even the title makes fun) will show you how difficult such micro-tuning is. It also makes the assessment of the regulation difficult. 

Topic of the month: L-gas supply

L-gas production in the Dutch Groningen field will decline faster than planned. At the end of September, the Dutch minister of economic affairs Eric Wiebes told the parliament about the production plan for the gas year 2020/21. Furthermore, the Summer Report 2020 of the Task Force Monitoring L-Gas conversion was submitted to the parliament. ener|gate Gasmarkt reported (ener|gate Gasmarkt 08-09/20) that the report was purposely delayed to cover the likely effects of the covid-19 pandemic (unfortunately, considering the current development, new impacts over the winter cannot be excluded). This information allows the assessment of the L-gas security of supply.

Framework conditionsAct for the Evolution of the Greenhouse Gas Reduction Quota (GHG-quota)

Some companies opened bottles of champagne after they saw the German Ministry of Environment (BMU) sent stakeholders the draft of an act and an ordinance provision. Others – perhaps a majority – were more in the mood for a glass of water after they browsed through the texts. The act was the one mentioned in the title of this sub-chapter “Act for the Evolution of the Greenhouse Gas Reduction Quota (GHG-quota)”. The ordinance provision has the short title “Ordinance Provision for establishing further regulations for the development of the GHG-quota”. More in the mood for water were the producers of biofuels, among them producers of biomethane as well as of E-fuels. Champagne was the drink preferred by refinery operators who want to use green hydrogen.