Long-term security of supply

Long-term security of supply relates to the volume and the diversity of the supply sources. Compared to most of its neighbours, Denmark has been privileged to have its own abundant reserves. As such, the entire transport route was within Danish territory and therefore shorter, in particular compared with those countries which mainly receive their supplies from Russia.

As production decreases, Denmark will become dependent on gas imported from Germany. The pipeline to the European gas network via Ellund ensures that the Danish gas market has access to gas reserves for many years to come. The gas in the North German system consists of Norwegian, Dutch, Russian and German gas as well as LNG. The Norwegian fields have suf- ficient reserves for the next 50 years, while Russia’s reserves are assumed to be many times larger and sufficient for the next 100 years.

In the long term, more Russian gas will be transported through the North German system, among other things because of the establishment of Nord Stream. DONG Energy

Billion Nm3_{/year 2015 2020}

Danish Energy Agency, April 2011 Denmark 2.9 2.6 Energinet.dk, May 2011 Denmark 3.1 2.8

Energinet.dk Sweden 1.3 1.3

Million Nm3_{/day 2015 2020}

Energinet.dk Denmark 17.0 15.3

Sweden 7.1 7.1

Tabel 5‑1 Projected annual natural gas consumption in Denmark and Sweden (export via

Dragør). The volumes correspond to Danish natural gas quality. Calorific value: 12.1 kWh/Nm3_.

Table 5‑2 Expected peak day consumption in Denmark and Sweden (export via Dragør).

61

has, for example, published agreements with Russian Gazprom on long-term sup- plies of gas to Northern Germany, and DONG co-owns an LNG plant in Rotterdam in the Netherlands.

The investments in import capacity which Energinet.dk has decided to implement are thus expected to have a great impact on long-term security of supply in light of the decline in North Sea gas production. In May 2010, the Danish Energy Agency published the report “Expansion of the infrastructure for transporting natural gas with a view to future imports to Denmark”

(Udbygning af infrastrukturen til transport af naturgas med henblik på fremtidig import til Danmark). One of the purposes of the

analysis was to illustrate how the Danish installations and pipelines in the North Sea can best be used together with the onshore infrastructure. The report was published at the same time as the former Danish Minister for Climate and Energy approved Energinet.dk’s expansion to Germany with the establishment of a compressor station and the looping of the Ellund-Egtved pipe- line. In June 2011, Energinet.dk decided to go ahead with a full expansion in Denmark to

a capacity of 700,000 Nm3_{/h. Initially, the}

German system will only be expanded to a capacity of approximately 310,000 Nm3_/h,

but the system is expected to be further expanded already in 2015.

The report states that the decision to ex- pand the network to Germany does not rule out the later establishment of a connec- tion to the Norwegian gas infrastructure, either by using the existing Danish offshore infrastructure or by establishing a direct connection to the shore. This depends on whether there is a market for this at some point.

Gas imports from Norway may include vol- umes to supplement supplies to the Danish and Swedish markets and onward supplies to the Northern European market, including the Baltic states. The report also states that, in connection with imports of Norwegian gas, the possibilities of using one or more of the Danish North Sea gas fields as a gas storage should be assessed. Through the Baltic Energy Market Interconnection Plan (BEMIP), for example, the European Commission supports initiatives for the diversification of gas supplies to Northern Europe and the Baltic area and welcomes an

investigation of both a Norwegian-Danish and a Danish-Polish interconnection. In the longer term, ie when the North Sea production starts to decline and Germany becomes Denmark’s largest source of sup- ply, it may be necessary to establish new infrastructure in order to comply with the EU security of supply regulation.

Against this background, Energinet.dk is investigating the possibilities of establishing an interconnection from Norway to Denmark by 2020, see section 6.2.

The Danish oil and gas production is of para- mount importance to the Danish economy. This is the reason why the former Minister for Climate and Energy turned the focus on the possibilities and challenges for the Danish oil and gas production and in the au- tumn of 2011 invited the oil and gas industry to participate in a dialogue where themes of great significance to the efficient utilisa- tion of the Danish oil and gas resources could be discussed. Energinet.dk expects that the new Minister for Climate, Energy and Building will continue the discussions. Hopefully, the discussions will pave the way for a common strategy for ensuring an

62

Gas in Denmark - Energinet.dk

efficient, safe and environmentally correct utilisation of the Danish oil and natural gas resources.

The government aims for Danish energy supply to come from renewable energy in 2050, but it will take time to implement such a transformation, and oil and natural gas will therefore continue to play a vital role in Danish energy supply for many years to come. The government determinedly follows two tracks: As much as possible of the oil in existing fields must be extracted. At the same time, efforts must be made to make new oil finds.

An interconnection to Norway may help to optimally utilise the North Sea resources.