Eurogas calls for gas demand security

Europe does not have a gas supply security issue, but should focus on security of demand, according to European gas federation Eurogas' president, Klaus Schafer.

The region has new sources of gas and LNG, import infrastructure is increasing and Europe's traditional suppliers remain committed, Schafer said. "But the constant discussion about security of supply concerns is not doing any good for our product," he said.

Eurogas is instead pushing for an increase in consumption, particularly in the power sector.

"We should focus on security of demand," according to Schafer — who is also chief executive of Germany utility Uniper.

The gas industry should keep pushing for "the right CO2 price thanks to a reformed EU emissions trading scheme", he said.

European gas demand tumbled after 2008, because of weak economic growth, the expansion of renewable capacity and increased energy efficiency. Power sector consumption fell because gas mostly remained uncompetitive against rival generation fuel coal.

But Eurogas has forecast a 6pc increase in gas demand this year, driven largely by the power sector. Gas should have a greater role through "market-based instruments" and displacing coal from the power mix, Schafer said.

Higher priced emissions would make gas-fired generation increasingly competitive with coal-fired output.

Prompt and near curve gas contracts at the TTF and NCG hubs have already slipped, encouraging gas to displace coal in the Netherlands and Germany this year.

Coal has largely been pushed out of the UK generation mix in the past couple of years, with fuel switching happening there first because of the country's carbon price floor.

New infrastructure

Eurogas backs any new infrastructure that complies with EU law and is supported by the market, Schafer said. "We should be cautious and undertake only those projects that are crucial, if we are using public funds," Schafer said. He called for a market test to determine whether projects are necessary, although did not detail specific projects.

The European Commission is funding new infrastructure through its Connecting Europe Facility. Many of the projects are in central Europe with a north-south gas corridor planned in the region to increase capacity between countries.

Power sector gas demand GWh/d

Power sector gas demand Jan-Sep GWh/d