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Issue title:

2020 - Review & outlook

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I hope that all of you started the new year well and in particular in good health. Unfortunately, Covid-19 will continue to take its toll in 2021. In my traditional review of 2020 and outlook for 2021 in this year‘s first edition, Covid-19 has its place. Exclusively for me, Team Consult, a consultancy specialised on energy, made a forecast of the likely impact of Covid-19 on the 2021 gas demand. You will find the forecast in the first chapter of this edition.

If you live in Germany and heat your home with gas or oil, the commodity has become more expensive, at least for your supplier. The gas price is increasing by precisely 0.4551 ct/ kWh as a result of the new national CO2 price. The impact on gas demand is presumably negligible, the new price burden is simply not high enough. That is at least the conviction of enervis, another consultancy (just to promote a second one). In the heating market model of the consultants, there is no substantial impact on gas demand before the CO2 price reaches a level of 80 to 100 euros/t. You will find more details in this edition. I think that the decarbonisation of the heating market is one of the biggest challenges for energy policy in this decade. Beyond strong convictions (we need millions of heat pumps, hydrogen should make its way in the heating market) I cannot see any convincing proposals for exisiting buildings that consider the impact on disposal incomes. The distribution effect is crucial.

Topic of the month: 2020 - Review & outlook

Most topics that were important in 2020 will still be on the agenda next year, too. This means that to a certain extent the 2020 review already contains elements of an outlook for 2021.

Covid-19: The overarching topic

Naturally, 2020 will remain on everybody’s mind irrespective of topics related to energy and gas. Covid-19 has and will have a substantial impact on the daily life of us all. It involves not only a dramatic change of all private routines, but also of all work processes. Frankly, even in March, the author of this publication underestimated the severity of the impact and the long-lasting consequences. However, what is also worth mentioning is the relative resilience of the gas sector during the pandemic - at least so far. In December, the author of this publication had the latest discussions with several senior managers from larger gas sales companies. All report a relatively good business in 2020. Nevertheless, gas sales were lower due to Covid-19 in the industrial and commercial sector. Therefore, surprises are possible in 2021 in the clearing of network accounts. Most standard load profiles presumably overestimated the offtakes mainly in the commercial sector. In the Gaspool market area, the system was long. And this was more pronounced than during the last five summers. The market area operator explicitly mentions in the recently published report on System Balancing Action the system condition over the summer. Especially in March, this led to significantly higher balances in the network accounts, where these deviations between effective offtake and standard load profile figures are collected, compared to the same period last year.

News on transportationNord Stream 2

Since the end of November, a lot has happened related to the Nord Stream 2 project. It started on November 15, when the US State Department submitted its quarterly report on the sanctions under PEESA to the responsible committee of the Congress. The report lists companies that violate PEESA and are to be threatened with sanctions. In mid-October the State Department had announced the extension of the application of PEESA. Not only companies that provide pipe-laying vessels shall be sanctioned, but also companies that support such work (ener|gate Gasmarkt 11/20). The report has not been published, but DNV GL, a service provider for certifications and inspections, stopped certification work for the Russian pipe-laying vessel in November to avoid being added to the sanctions list.