1. Introduction to Issue Paper on gas supply security
Author:
Jaap Jansen
Company
Energy Research Centre of the Netherlands (ECN)
Contact: Web:

2. Focus countries and indicators
Overview
Background
Focus countries and indicators
Trends on gas consumption and gas import
Energy security in broader sense
Concluding remarks

3. Why this paper?
In response to Russian-Ukraine stand-off the Council meeting on March 2014 made energy security a top agenda issue
Request to the Commission to prepare in-depth energy security study before the next Council meeting
In the project kick-off meeting it was requested to prepare the first WP6 issue paper on gas supply security in MS on the eastern border of the EU

4. Some important points from the energy security strategy:
COM (2014)330 final: European energy security strategy
Some important points from the energy security strategy:
Underlying study highly interesting; solid piece of work
Emphasis on:
reduction gas dependence on Russia
safeguarding gas supply to meet given (forecasted) demand under disruptions of Russia-sourced gas supplies
Proposing enhanced intra-EU interconnectivity and more EU-wide coordination (diplomacy, contract negotiations)
based amongst others on specific EE and RES 2030 targets, supply diversification and more interconnectivity (interconnections, reverse flows)
“speaking with one voice” in supply contract negotiations; offering stable EU partnerships with key external suppliers

5. Enhanced inland (non)conventional gas E&D activity
Main strands of external gas dependency reduction
Enhanced inland (non)conventional gas E&D activity
Limited scope; sustainability issue
Enhanced inland coal E&D activity
Enhanced inland nuclear generation
Poor competitiveness EU technology; sustainability issue
Additional RES RD&D and deployment
Additional EE RD&D and deployment
→For good reasons issue paper focuses on RES and EE

6. Project partners selected 12 focus countries:
Choice of focus countries and sectors
COM(2014) 330 final,p.7: special attention for all MS on the eastern border of the EU
Project partners selected 12 focus countries:
Bulgaria (BU), Czech Republic (CZ), Estonia (EE), Croatia (HR), Latvia (LV), Lithuania (LT), Hungary (HU), Poland (PL), Romania (RO), Slovenia (SI), Slovakia (SK), Finland (FI)
Focus sectors: buildings, industry, power sector

7. Large differences in economic structure
12 focus MS countries are rather diverse
Large difference in income per cap, e.g € (Bulgaria) vs € (Finland)
Large differences in economic structure
Ditto in population numbers, e.g million (Poland) vs 1.3 million (Estonia)
Energy intensity (energy per unit of GDP) highest in Bulgaria and lowest in Finland, but all 12 focus countries have energy intensity above EU28 average

8. Share of gas in gross inland energy consumption (GIES)
Indicators
Given the focus on reducing the impact of disruptions in physical flows of Russian gas, indicators used are:
Share of gas in gross inland energy consumption (GIES)
Share of Russia in net extra-EU gas imports
Share of gas originating from Russia in gross inland gas consumption ≈ Russian gas dependency rate

9. Trends: Share Russian gas in total extra-EU gas imports of 12 MS

10. 2012 update: GIEC in PJ by fuel in % points
12 MS in total less dependent on gas than EU28: 19% versus 23%
High gas shares in GIEC for Lithuania, Hungary, Romania, Croatia, Lithuania and Slovenia

11. 2012update> Share gas and Russian gas in GIEC of 12 MS

12. 2012 update: Gross electricity generation by fuel (in % points)
12 MS in total has lower gas share than EU28 in electricity mix: 8% versus 18%
Hence, overall more limited potential in 12 MS to reduce gas in the power sector
Non-hydro RES-E deployment in 12 MS has scope to go up

13. Industry is dominant in Lithuania and Slovakia
2012 update: Gas consumption by sector
Among 12 MS with high gas share in gross inland energy consumption:
Industry is dominant in Lithuania and Slovakia
Buildings (household, services) is dominant in Hungary (51%)
Power is important in LT and HU
Country
Gross inland gas consumption: energy sector and four end-use sectors
Share in gross inland energy consumption [%]
Total [PJ]
Energy
Industry
Transport
Housholds
Services BG
102
44%
39%
11% 2% 4% CZ
287
12%
37% 1%
30%
20% EE 23
58%
24% 0%
10% 8% HR
101
40%
33%
21% 6% LV 51
67%
15% 9% LT
111
51% 5% 3% HU
347
32%
17%
18% PL
574
42%
25%
14% RO
450
34% SI 30
22%
59% SK
183 FI
126
69%
29%
EU-SMS
2385
35%
EU28
16439
26%
28%
13%

14. Energy security is a broad, multi-faceted issue
Energy security: Underexposed issues (2)
Energy security is a broad, multi-faceted issue
Energy security priorities are often dominated by short-term concerns. Long-term concerns tend to be underexposed.
Structural reduction of the role of fossil fuels in our economy is not only consistent with 2030 C&E targets. It:
enhances long-term resilience against FF price surges/volatility + sudden supply disruptions
reduces international resource rent transfers  eventually lower geopolitical tensions + better prosperity prospects on both sides
Primacy of short-term energy security concerns may engender lock-in of fossil fuel use *

15. Long term energy security concerns merit due attention.
Concluding remarks
Emphasis on safeguarding short-term gas supply security justified by urgent concerns on disruptions of Russian gas supplies
The 12 MS studied have diverging exposure to Russian gas supply risks. Especially Lithuania, Hungary, Slovakia and Latvia have high exposure.
Enhanced intra-EU interconnectivity and coordinated external diplomacy and contract negotiations is needed.
Long term energy security concerns merit due attention.