DIGITAL ERA OF ENERGY 6 GAS MARKETS IN EASTERN EUROPE 8 EU NEW HYBRID ENERGY SYSTEM 24

The next five years can become extremely dynamic “Gazprom’s” positions on the markets of Eastern New paradigm of the future EU energy system could for the European energy market. The “Clean Energy European countries will remain high owing to the be the use of excess electricity generated from the for All Europeans” will launch powerful mechanisms traditional partners of a Russian company. Under sun and wind to produce hydrogen gas with its further of decarbonization, push changes in the principles of certain scenarios, “Gazprom” may increase its presence transportation via gas transportation system and functioning of the energy market from centralized to in these markets. accumulation in the European system of underground distributed generation, and cause the emergence of a gas storage facilities. new active and mass player — the prosumer. ENERGY

CORPORATE MAGAZINE CEPCONSULTPARTNER S.R.O. | # 2 DECEMBER 2019 -FEBRUARY 2020 |

THE MAIN TOPIC THE THE NEXT FIVE YEARS CAN BECOME DIGITAL EXTREMELY DYNAMIC FOR THE ERA OF EUROPEAN ENERGY ENERGY MARKET. AS AN OPPORTUNITY AND A CHALLENGE |EDITORIAL COMMENT| |EDITORIAL COMMENT|

On November 15th, 2018 at the Morava of the consulting agency into the Slovak Marian Meško, the Honorary Consul conference hall of Austria Trend consulting services market, to present of Lithuania in the Slovak Republic, Hotel,Bratislava, our commercial the groundwork on the main directions noted the prospects of increasing project presented its portfolio of of the company’s competitive services, interest of the business and government consulting services for the business as well as to establish business contacts of Slovakia in consulting services in community of Slovakia and other in the informal atmosphere of the project management in energy, energy European countries in cooperation reception. efficiency and non-financial risksin view LOOKING with Lithuanian consulting company The moment of entering the local and of termination of the financial assistance UAB Centre of Energy Partnership regional consulting services markets period from the EU structural funds and (CEP). The purpose of the official for Cepconsult is assessed as successful. financial institutions for Slovakia. DEEPER, presentation was to indicate the entry In a welcoming address for the guests, At the turn of 2019-2020, factors of SEEING FURTHER AND OFFERING MORE

ew views of the market of tra- We are pleased to share our knowledge ditional energy resources (oil, not only within professional community, natural gas, coal) in Europe, but also on the pages of the corporate business analysis of EU ener- magazine “Energy Partner”, the first gy policy in the scope of the issue of which examined the real level N“Clean Energy Package”, business op- of US financial participation in the portunities in Europe under the chal- global “green economy”, analyzed the lenges of global climate policy, deprecia- issues of concerns of the gas distribution tion of the loan portfolio at the expense industry in Ukraine, reviewed markets of “green” borrowings, forecast of busi- promising for investment in renewable ness development in the conditions of energy, considered the role of natural geopolitical changes – are the services gas in relations between Russia and the offered by Slovakian consulting compa- European Union, etc. The magazine is ny Cepconsult s.r.o. available to our clients and partners in Founded in April 2019 in Slovakia, printed publications and online. Cepconsult s.r.o. put together a team of Cepconsult s.r.o. strives to become experts in the field of economics, energy, an attractive partner for companies sustainable development issues and non- operating in the European energy GENERATING STATION financial risks in a short period of time market by offering professional services CLASSIFICATION OF POWER STATIONS which allows the company to provide regarding issues of energy and climate services on marketing, consulting, policy of the EU, relationships between 5.9 % information and lobbying to companies key public and corporate actors, analysis THERMAL RENEWABLE ENERGY 44.4 % interested in business in the European and forecast of geopolitical, security 5.2 % energy markets. In the long term, it and corporate risks and opportunities. is planned to develop a new direction We anticipate opening a representative - “business training and short-term office in Bratislava in the nearest time, Nuclear Thermal Biomass Osmosis Solar Wind Hydroelectricity Marine Pumped storage business education”. More information where strategic interests of consumers, 22.2 %

and the portfolio of consulting services transistors and energy producers from can be found on the^ website: https:// traditional and alternative sources are cepconsult.com. crossed. SLOVAKIA energy and ecology infographics

2 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 3 |EDITORIAL COMMENT| |CONTENT|

medium-sized business striving to work MAIN TOPIC successfully in a changing environment 24 in the European market. Cepconsult The digital era is willing to offer timely assessment of financial and professional capabilities, of energy as strengths of the company, attractive an opportunity niche areas for development of company activities. Our company will undertake and further support and provide timely a challenge information on possible new challenges for business resulting from changes in geopolitical realities or business conditions in a particular country. We research and adapt information about new opportunities for attracting financial resources at acceptable ratesto the needs of our customers; we offer unique cases for specific needs and always work according to an individual program. instability in the global economy may intensify. At the European level, it is expected to reformat the transit routes LOOKING DEEPER, BELARUS NUCLEAR for fossil fuels, to further promote CORPORATE 2 seeing further 19 increase of the role of renewable energy and offering more POWER PLANT sources in the energy balance of the MAGAZINE “BELNPP”, leading EU countries and strengthen CEPCONSULT its prospects responsibility of states for the impact on and challenges the environment. Adapting power market S.R.O. # 2 for the country actors to the new operating conditions 6 HEAD OF will require fresh ideas and creative december 2019 - UKRAINIAN approaches to solving professional february 2020 problems in which Cepconsult team is NGO «Sergiy Dronov THE NEW HYBRID ready to offer its services. 26 Due to a combination of knowledge Human Rights Center» ENERGY SYSTEM and experience in the energy, finance, Editor Maksym Nedria of the European Union education and consulting sectors, CEO & co-founder Cepconsult has unique capabilities for a Cepconsult s.r.o. comprehensive analysis of the situation GAS MARKETS Mliekarenska 8, 821 09 8 of both large companies, small and Bratislava IN CENTRAL AND Slovak Republic SOUTH-EASTERN 28 MEDIUM-TERM t.: +421 919 480 943 EUROPE PRIORITIES e-mail: [email protected] are on the path for the transformation of transformation of the EU www.cepconsult.com energy system We value each of our clients highly and strictly adhere to the corporate ethics of relationships, confidentiality and protection of rights in accordance with the requirements of European legislation. By combining our own knowledge and 15 FUTURE OF GAS 30 NEW experience with the business ideas of our clients, we strive to achieve mutual INFRASTRUCTURE PROJECT benefit in accordance with the “win-win” principle and adhere to the approach in Central Eastern and South for industrial use embedded in our corporate slogan “Together we can”. Eastern Europe of hydrogen in the EU

4 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 5 |THE ISSUES OF THE BRANCH| |THE ISSUES OF THE BRANCH|

the financial burden on the complete the process of expenses. employees of gas distribution consumer in winter, as the separating the distribution Equal payments throughout network operators will be consumer will make equal service from the sale of gas the year will allow gas able to receive a salary of HEAD OF payments throughout the itself as a commodity. The distribution network about UAH 13,500 per year. It should be noted relevant steps are envisaged operators to obtain the month, which amounts to that the formation of tariffs by the Law of Ukraine “On resource they need to the average salary in the on the basis of capacity is the Natural Gas Market” and maintain and modernize industry. UKRAINIAN provided by the Law of are a part of the Third Energy their networks. In turn, this At the same time, NEURC Ukraine “On the Natural Package of the European will increase the safety and did not provide for up-to- Gas Market”. Similar Commission, which Ukraine uninterrupted distribution date compensation for losses approaches to the payment has committed to comply of natural gas. of gas distribution companies NGO of gas transportation are with in the framework of With the adoption of the in the proposed tariffs. Last already applied at the the implementation of the new methodology, there year alone, they suffered market, for instance, by EU-Ukraine Association will be an opportunity to losses of more than UAH 4,5 «SERGIY DRONOV the state operator of gas Agreement. The consumer direct funds for raising billion. With the proposed transportation system will see how much he pays salaries for employees of gas rates of funding, losses will HUMAN RIGHTS “Ukrtransgaz”. for the gas itself and for its companies. Once the tariffs be compensated within more The new tariff model will delivery and will affect his have been approved, the than 20 years. CENTER» Sergiy Dronov, Doctor of Law And here is the question. Does the he applicants argued that Ukrainian Law No. 1540, number of provisions, in particular article 6, 19, 85, 92, 106 of aforementioned which defines the legal status of the National Energy the Constitution of Ukraine, since the system of state bodies, decision of the and Utilities Regulatory Commission (hereinafter the name of state bodies, the order of their formation and Constitutional referred to as NEURC), its objectives, functions, functioning can be changed only by amending the Constitution Court of Ukraine powers and the procedure of their implementation, of Ukraine and in order prescribed by the Constitution. not interfere with Tviolates the constitutional principles of separation of powers. Thus, the Court declared unconstitutional the provisions the approval of The Court concluded that the formation of a permanent of Law No. 1540 concerning the composition of the tender the long-awaited independent state collegial body, which by its functionality, commission, its status as a regulator, its autonomy and tariff for gas sphere of activity and powers has the characteristics of a central independence, the guarantee of independence of its members body of executive power (in particular, it forms and implements and the formation of the tender commission for the selection of distribution pricing and tariff policies in the field of energy and public candidates for the posts of members of the NEURC. network utilities; participates in formation and implementation of state These norms will cease to be effective from December 31, 2019, operators, since policy in the field of heat supply, centralized water supply and since the recognition of these norms being unconstitutional in early 2020 a central sewerage; approves a typical agreement on the supply will cause substantial legal gaps in the legislation regarding new law on the and distribution of natural gas) but is not subordinate to the the organization of the activity of the Commission, which may NEURC should be Cabinet of Ministers of Ukraine and is not a part of the system undermine its functioning and implementation of its tasks of adopted and a of bodies of executive power, which does not comply with the state regulation in the energy and public utilities sector. new composition Constitution of Ukraine. Therefore, the Constitutional Court of Ukraine found it of the Commission In addition, by adopting Law No. 1540, according to which necessary to delay the expiry of these provisions in order to should be formed the Commission is a permanent independent state collegial bring the legislation into conformity with the requirements of accordingly. One body, the members of which are appointed and dismissed by the Constitution of Ukraine. thing is for sure, the President of Ukraine, which is not provided for by the The new methodology stipulates that the payment for gas Constitution of Ukraine, Verkhovna Rada of Ukraine has supply will be made in equal monthly installments. This will the employees of gone beyond its constitutional powers and thus violated a make the payment simple and predictable, as well as reduce gas distribution industry need more than ever At the same time, four years in a row gas distribution network operators have required the NEURC to a fair tariff, revise the tariff for natural gas distribution and to bring it to a cost-effective basis. On October 8, 2019, otherwise next this issue started to be resolved. NEURC approved a new methodology for calculating gas supply tariffs for year we won’t be gas distribution network operators and approved the draft tariffsat its meeting. The transparent approach able to reach 104, of formation of the cost is based on the capacity ordered by the consumer and will not depend on volumes It is a car of the emergency dispatching service of JSC «Kyivoblgaz» with all the special equipment, as there won’t be of consumption. driver Sergey, master Alexander and two locksmiths Yuri and Sergey. It is these teams that work anyone to reply. around the clock on the calls, they are the ones that localize accidents and eliminate gas leaks.

6 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 7 |GAS MARKETS| |GAS MARKETS|

GAS MARKETS IN CENTRAL AND SOUTH- EASTERN EUROPE ARE ON THE PATH OF TRANSFORMATION

Gas pipelines in operation Ongoing projects

Nord Stream and Nord Stream 2 gas pipelines. | Source: gazprom.com.

DMYTRO MARUNYCH, recent years is about 70%. reducing CO2 emissions and environmental pollution. First power, will contribute to an increase in its consumption by Co-chairman Energy Strategies Fund, Kiev The countries of Central and South-Eastern Europe play an of all it concerns the Czech Republic and Poland, the share 2030 by 15% in Slovakia. important transit function, since they are located between of coal consumption in the energy balance of which remains The demand from the industrial sector will have a significant the largest centers of gas production (Russia, Middle East) quite significant. The increase in gas consumption is also impact on the dynamics of gas consumption in a number of he countries of Central and South-Eastern Europe and gas consumption (Western Europe). The transit role explained by meeting the growing needs of the economies of countries in Central and South-Eastern Europe. This factor are important for both regional and international of the region for Russian gas is likely to decrease due to the countries of Central and South-Eastern Europe (+ 2-3% will determine the volume of natural gas consumption in gas markets. The region is a major consumer and the organization of direct supply by sea (“Nord Stream”, per year by 2023, according to IMF forecasts). Romania, Turkey, Greece (an increase from 4.9 billion cubic importer of natural gas – with gas consumption “Nord Stream 2”, “Turkish Stream”). At the same time, the According to the energy strategies of the countries of Central meters in 2017 to more than 7 billion cubic meters by 2030) amounting to 72 billion cubic meters in 2017, which transit role of the region for gas supplies from countries in and South-Eastern Europe, the consumption of natural gas and Croatia, where an increase from 3 billion to 6 billion Tis 14% more than in 2010, and import of gas amounting Transcaucasia, Central Asia and the Middle East, on the in the future until 2030 will be largely determined by the cubic meters is predicted . to 60 billion cubic meters in 2017, which is 30% higher contrary, tends to increase. demand for gas from the thermal and electric power sectors. than in 2010. Taking into account Turkey, these figures Under the influence of this factor, gas consumption is Perspective gas production areas in the region reach 125 and 113 billion cubic meters respectively. The Assessment of the needs for natural gas of expected to increase in the Czech Republic (+ 7% for 2017– development of gas industry in the countries of Central countries in the region 2030), Hungary (+ 10%). Last but not least, this determines The development of natural gas production is among the and South-Eastern Europe until recently was associated the position of these countries in relation to Russia’s priorities of the energy policy of a number of countries in with the supply of exclusively Russian gas. The Russian Gas demand in Central and South-Eastern Europe depends “offshore” pipeline projects. At the same time, Poland Central and South-Eastern Europe. These include Bulgaria Federation (and earlier the USSR) provided the necessary on the policies of individual countries, the European Union does not expect consumption growth; consumption will (development of offshore fields and shale gas), Poland level of gas consumption. However, later, due to economic and the development of transport infrastructure enabling its constitute 20.2 billion cubic meters in 2030 in comparison (traditional deposits, coal gasification), and Romania (gas and political reasons, as well as infrastructural restrictions, imports. Experts of the “International Energy Agency”, IEA with 20.1 billion cubic meters in 2017. Replacing electricity extraction at sea, intensification of onshore production). Eastern European countries began to actively develop new and regional analysts in the long term expect an increase with gas for heating and domestic needs will determine the At the same time, a significant increase in production should supply routes. At the same time, Russian “Gazprom” remains in gas consumption and imports to the countries of the demand for gas in Bulgaria (+ 9% by 2030) and Serbia (+ be expected only at offshore fields in Romania, where a the main gas supplier in the region. Its share on average in region due to the implementation of EU legislation aimed at 25% by 2030). Replacing coal with gas, especially in thermal number of transnational mining companies are implementing

8 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 9 |GAS MARKETS| |GAS MARKETS|

mining projects. Traditional gas on reduction of gas supplies from the At the same time, “PGNiG” does not extraction projects in Poland which Russian Federation and dependence on disclose the price of imported LNG, were launched in the beginning of “Gazprom”. referring to sales within the company’s 2010’s did not prove beneficial and, as Thus, on November 8th, 2018, the portfolio. According to information of now, lost the support of all the major authorities of Poland and the United from Polish sources, this price exceeds foreign players. States signed a declaration on expanding the price of pipeline gas, which Poland cooperation in the field of energy receives from the Russian Federation Competition among gas suppliers security. According to the Minister of and other countries. and the position of “Gazprom” in Energy of Poland: “cooperation with In November 2018, the Polish the region the United States in the field of energy operator “Gaz-System” and the Danish is of strategic importance for Poland.” “Energinet” made the final decision The states of Central and South- At the same time, the Polish “PGNiG” on building the “Baltic Pipe”. The gas Eastern Europe can be divided into concluded a long-term agreement with pipeline project will connect Poland 3 groups, depending on the declared the “American Cheniere Marketing and Denmark, and will subsequently and implemented policies in relation International”. The document provides provide connection to the Norwegian to “Gazprom” and gas imports from for deliveries to the LNG terminal in gas transmission network. This will Russia. Poland in 2019-2022 about 0.73 billion allow transporting gas from Norway At the same time, it is necessary to cubic meters of gas after regasification, to Poland through Denmark. The take into account the level of gas and about 3.9 billion cubic meters of projected gas pipeline capacity is 10 consumption in Central and South- gas in 2023-2024 after regasification. billion cubic meters of gas per year. As it Eastern Europe and the share of The total volume of supplies is 29.5 is known, on January 23rd, 2019, Poland “Gazprom” in its provision (Table 1). million tons of liquefied natural gas. received confirmation of EUR 215 The first group includes countries LNG is also supplied as a part of a million financing for the construction of such as Poland and Romania. The long-term contract with a volume of the “Baltic Pipe” from the EU budget. governments of these countries over 1 billion cubic meters per year Poland plans to replace gas imports from implement a fairly consistent policy from Qatar. Russia with Norwegian gas after 2022,

Legend Gas production centers Prospective fields Main gas export routes Gas transmission projects Main gas pipelines 1. Arctic shelf 1. Shtokman 8. Chayandinskoye 1. Nord Stream gas pipeline 7. Nord Stream 2 gas pipeline Gas pipelines planned or under construction 2. Yamal Peninsula 2. Kharasaveyskoe 9. Piltun-Astokhskoye 2. Yamal - Europe gas pipeline 8. TurkStream gas pipeline LNG supply routes 3. Nadym-Pur-Taz region 3. Kruzenshternskoe 10. Lunskoye 3. Urengoy - Uzhgorod gas pipeline 9. Ukhta - Torzhok 2 gas pipeline 4. Irkutsk 4. Bovanenkovskoye 11. Kirinskoye 4. Blue Stream gas pipeline 10. Bovanenko - Ukhta gas pipeline Note. 5. Yakutia 5. Severo-Kamennomysskoye 12. Yuzhno-Kirinskoye 11. Power of Siberia 2 gas pipeline Operating gas transmission systems in Russian Far East the information in the map is provided 6. Sakhalin 6. Kamennomysskoye-Sea 13. Kshukskoye 12 Power of Siberia gas pipeline as of Desember 31, 2015. 7. Kamchatka 7. Kovyktinskoye 14. Nizhne-Kvakchikskoye 5. Sakhalin - Khabarovsk - Vladivostok gas pipeline 6. Sobolevo - Petropavlosk-Kamchatsky gas pipeline

Gazprom Group’s gas business development. Source: gazprom.com. | Source: gazprom.com.

when the so-called “Yamalskyi” contract expires. “PGNiG” AG, and Conef) offered consumers a resource at a price lower GAS CONSUMPTION IN IMPORT OF GAS THE SHARE OF IMPORTS conducted a lengthy trial, accusing “Gazprom” of the unfair than the distributors of their own gas. As a result, in 2016, STATE 2016, BILLION CUBIC FROM THE RUSSIAN FROM THE RUSSIAN gas pricing formula. imports of “Gazprom’s” resources amounted to 1.7 billion, and METERS FEDERATION IN 2016, FEDERATION IN Prospective directions for the development of the gas sector in 2017 — 1.4 billion cubic meters. However, in 2018 it again BILLION CUBIC METERS CONSUMPTION,% in Poland include: an increase in gas consumption in the fell to about 1 billion cubic meters. BULGARIA 3,2 3,2 100 electricity sector to cover peak loads and as a power reserve In the near future, Bucharest expects not only to reject from for wind power plants (WPP); import diversification; imports, but also to increase gas exports by launching a number BOSNIA AND HERZEGOVINA 0,2 0,2 100 development of Poland’s own gas extraction and production of offshore production projects. At the same time, according to HUNGARY 10,1 5,7 56,4 of gas by means of coal gasification; modernization of gas Romanian legislation, investors in energy projects will be able transmission system; expansion of the LNG receiving terminal; to export with ongoing plans just over 3 billion cubic meters GREECE 4,1 2,7 65,9 gas storage development. At the same time, at present, the per year, which does not prevent officials from announcing POLAND 19,0 11,1 57,9 characteristics of the Polish energy sector are complicated by superior export plans. Thus, on February 6th, 2018, the ROMANIA 11,3 1,7 15 the fact that the adoption of the new energy strategy of Poland Romanian Foreign Ministry announced that Romania had until 2040 is being delayed. reached a preliminary agreement with Hungary on annual SERBIA 2,4 1,9 79,2 Romania managed to reduce gas imports from Russia due to the supplies of 1.75 billion cubic meters of gas starting from 2020, SLOVAKIA 4,7 3,7 78,7 intensification of projects for the extraction of its own resource. which should increase to 4.4 billion cubic meters since 2022. SLOVENIA 0,9 0,5 55,5 Another factor was the decrease in industrial consumption In conclusion, it should be noted that it was Bucharest that after the closure of a large number of energy-intensive submitted for consideration of the EU governing bodies TURKEY 46,4 24,8 53,4 industries in the country. If in 2012 “Gazprom” supplied amendments to the “gas directive” in the wording, which CROATIA 2,6 0,8 30,8 Romanian consumers with 2.9 billion cubic meters of gas, then proposed issuing exemptions for projects from third countries CZECH 8,5 3,1 36,5 in 2015 this volume was reduced to 0.3 billion cubic meters. exclusively by the European Commission. However, in the Subsequently, the volume of imports from Russia increased text of the amendments that was finally agreed upon under the Table 1. Gas consumption in Central and South-Eastern Europe and the share of “Gazprom” in ensuring consumption again, since importers (WIEE — owned by “Gazprom” Schweiz pressure of Germany, this right was granted to the EU state,

10 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 11 |GAS MARKETS| |GAS MARKETS|

Romania, Bulgaria and Hungary by year (in accordance with the forecasts the EU’s territory exactly by means of announced the final investment 2020. of countries), which should be provided the so-called “Eastern route”. State gas decision on the project. At the same There are factors that can cause tangible almost entirely by increasing imports. transmission operator “Bulgartransgaz” time, the confirmed reservation volumes changes in the structure of gas supplies There is no doubt that the construction on January 31st, 2019 announced the of the future LNG terminal capacities to the region, and lead to a decrease in of LNG terminals can provide the final investment decision to expand the amounted to only 520 million cubic “Gazprom’s” presence. required amount of resources, however, national network of gas pipelines from meters per year. the sources of funding for these projects the border with Turkey to the border Greece seeks to become a regional Development of alternative are not identified. As for the possibilities with Serbia. The project cost is EUR maritime link and distribution hub pipeline gas supply routes of a significant increase in the supply of 1.4 billion. Proposals for the purchase of for LNG supplies in the Eastern pipeline gas within the “Southern Gas 100% of the gas from this pipeline have Mediterranean by implementing a joint Azerbaijan, and later on — countries of Corridor”, in the next few years the already been submitted by two bidders. project with the EU, the “Poseidon Central Asia (Turkmenistan), as well volumes will be limited to 10 billion Preliminary distribution of gas from Med II”, worth EUR 53.3 million. The as Iran can become new sources of gas cubic meters per year (“TAP” gas the second (European) branch of the project started in June 2015 and should imports. In 2018, the “TANAP” gas pipeline), some of which will be sent to “Turkish Stream” involves the supply be completed in late 2020. The project pipeline with a capacity of 16 billion Italy, and the prospects for expanding of 3.5 billion cubic meters to Bulgaria, involves terminals in six ports: Venice cubic meters was commissioned, which this route depend on the availability 2.5 billion cubic meters — to Serbia, 6 in Italy, Piraeus, Patra, Heraklion and connected the west coast of Turkey of natural gas production capacity in billion cubic meters — to Hungary. The Igoumenitsa in Greece and Limassol in with Azerbaijan through Georgia. Azerbaijan and the attraction of new remaining 3.75 billion cubic meters can Cyprus. The project also includes LNG Currently, its continuation — the “TAP countries to the project. be transported to Slovakia and Austria terminal on Revitus Island, near Athens. gas pipeline” (10 billion cubic meters per to the CEGH gas hub in Baumgarten. “Gazprom” repeatedly stated that the year) is being implemented in Europe The policy of expanding cooperation model of work on the European market, and will connect Turkey with Italy THUS, THE EXPECTED with “Gazprom” is also implemented by which is focused on supplies to the final through Greece and Albania. Supplies GROWTH IN GAS the leadership of Hungary. Thus, in the consumer, is outdated. Apparently, are scheduled for 2020, and increase of CONSUMPTION IN THE course of negotiations on September 18, Moscow learned a lesson from the the capacity of “TANAP” to 23 billion 2018, Hungarian Prime Minister Viktor negative experience, when in 2014 the cubic meters per year is expected by COUNTRIES OF EASTERN Orban suggested to Vladimir Putin to construction of the “South Stream”, Construction of “Turkish Stream” gas pipeline. | Source: gazprom.com. 2023. EUROPE OPENS UP consider the extension of the “Turkish which had already begun, was sustained. PROSPECTS FOR “GAZPROM” Stream” gas pipeline to Hungary. This “Gazprom” adjusted the gas supply on the territory of which the first point is one of the priorities of the energy Growth of LNG imports and gas TO MAINTAIN THE CURRENT is an obvious step towards Russian plans scheme in such a way that only local of connection of the gas pipeline from policy of Bulgaria, Bosnia and transportation to continental SUPPLY VOLUME, OR EVEN to increase the volume of gas supplies to operators will be responsible for a third country to the gas transmission Herzegovina, Hungary, Slovakia and countries Europe. system of the EU member state is the Czech Republic. Hungary and the INCREASE IN THEIR VOLUME The third conditional group can be located. In fact, this can be regarded Czech Republic are also considering One of the priorities of the gas industry IN CERTAIN CASES. attributed to states with access to the sea, as success of the lobbyists of the “Nord the possibility of gas supplies from development in almost all maritime such as Croatia and Greece. In addition Stream 2” gas pipeline project. LNG terminals in Poland, Croatia, countries of Central and South-Eastern to expanding the supply of pipeline gas One of the most important goals of Slovenia and northern Italy, Europe is the construction of LNG Bulgaria, Serbia and Hungary can be from available sources, including from the state policy of all countries of while Bulgaria and Hungary are terminals to supply gas to the domestic attributed to the second conditional the resources of “Gazprom”, they are Central and South-Eastern Europe participating in the “Southern Gas market and to neighboring countries group of countries of Central and South- trying to implement projects for the in the gas sector is to ensure their Corridor” project. (for example, projects in Croatia, Greece, Eastern Europe in relation to Russian construction of LNG terminals. energy security, including by means Thus, in July 2017, Hungary, Albania). The implementation of most of gas supplies. As mentioned above, It should be noted that not all such of diversification of sources and Bulgaria, Romania and Greece signed these projects is hampered due to the lack Russia is the largest gas supplier to the projects are progressing successfully. In routes of supply of natural gas, a memorandum of understanding of investors. An example of the successful region. In a number of countries (Serbia, May 2018, Croatia once again lowered which is caused by high dependence within the framework of the “Vertical development of LNG infrastructure is Bosnia and Herzegovina), Russian gas the estimated capacity of the LNG of these countries on gas imports. Gas Corridor” project, which is aimed Turkey, which in 2016 and 2018 put provides up to 100% of its consumption. terminal on the island of Krk from 4-6 Thus, diversification of gas supplies to connect the gas transmission into operation two LNG terminals with In general, these countries are loyal to million tons per year to 2.6 million to Turkey and Bulgaria can be networks of these countries. The a total capacity of 12 billion cubic meters the expansion of “Gazprom’s” presence tons of LNG at the first stage. Project reached by purchasing gas from possibility of connecting to both the per year, and another one is scheduled to in the region and intend to take an company LNG Hrvatska d.o.o. cancelled Algeria, Egypt, Iraq, Qatar, the “Turkish Stream” gas pipeline and the launch in 2019. active part in the implementation of a previously announced tender for the United Arab Emirates, Oman, alternative “TANAP” gas pipeline is The development of LNG infrastructure, projects to expand the national gas supply of a floating regasification vessel Turkmenistan, the countries of the being considered. At the same time, the emergence of new suppliers of pipeline pipeline networks. and announced a new one for the supply Eastern Mediterranean, the Caspian Bucharest is promoting the “BRUA” gas leads to increased competition with First of all, we are referring in particular of a vessel “with smaller capacity”. region and Africa. This will also gas pipeline project (Bulgaria- Russian gas in the countries of Central to the extension of the “Turkish According to Croatian media, the reason be facilitated by the construction Romania-Hungary-Austria), which and Southeastern Europe. However, in Stream” gas pipeline route. Reports was that the LNG Hrvatska operator of new and increased throughput should ensure supplies from gas fields the period up to 2030, gas consumption from Bulgarian official sources indicate has no guarantee of loading the terminal Ongoing projects UGS capacity of existing interconnectors on the shelf and in the deep-water in the region as a whole is expected to a high likelihood that Russian gas from in the form of binding bids for capacity. Gas transmission across Serbia. with neighboring countries, which part of the Black Sea to Austria via grow by 15-20 billion cubic meters per the “Turkish Stream” will flow through Only in January 2019, the operator | Source: gazprom.com.

12 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 13 |GAS MARKETS| |GAS MARKETS|

FUTURE OF GAS INFRASTRUCTURE IN CENTRAL EASTERN AND SOUTH EASTERN EUROPE

Construction of offshore section of “Nord Stream 2” gas pipeline. | Source: gazprom.com. the construction and transit of gas in the the markets and used this to establish between the isolated gas markets of future and the Russian side will provide unfairly high gas prices. “Gazprom” was Bulgaria, Estonia, Latvia and Lithuania necessary support. threatened with a substantial fine — up with the neighboring markets of the EU, An antitrust investigation against to 10% of the total turnover. As a result, including by means of virtual reverse. “Gazprom”, which was conducted by “Gazprom” made concessions, and the However, in the EU there were those Following the releasing of the System which contribute to achieving EU’s energy and climate the European Commission from 2012 European Commission responded by dissatisfied with the result of the policy objectives a lot. Gas infrastructure in Central and to 2018, also played its role. The reason closing the investigation in May2018. proceedings. On October 15th, 2018, the Development Map 2017/2018 which presents Eastern Europe is subject to regulation by several Regional was the accusation put forward to the “Gazprom” excluded provisions on Polish state-owned company “PGNiG” existing infrastructure & capacity and planned Groups, namely North-South gas interconnections in Russian company in manipulating resale of gas restriction from contracts appealed to the European Court infrastructure from the perspective of the Central Eastern and South Eastern Europe (NSI East Gas), the European gas market by Estonia, with the listed countries. The agreement against the decision of the European Southern Gas Corridor (SGC) and Baltic Energy Market Latvia, Lithuania, Poland, the Czech also enabled consumers in Central Commission. Poland believes that year 2018 by ENTSOG www.entsog.eu Interconnection Plan in gas (BEMIP Gas). Republic, Slovakia, Hungary and and Eastern Europe to revise contract “Gazprom” did not bear the deserved and GIE www.gie.eu, CEP-team proposes CEF is one of the most important instruments for Bulgaria. The plaintiffs argued that by prices if they are too much different punishment for abuse of a dominant implementation of gas interconnection projects within the controlling gas flows and barring its re- from quotations on gas hubs. Another position and continues to artificially editorial comment on it: EU, as it provides up to 75% of financial sources. Most of export, “Gazprom” artificially divided condition was the provision of operations inflate gas prices. EU Member States are reluctant to spend own money on interconnections and usually wait until the respective xpansion of gas infrastructure in the EU is decision on support comes from CEF. From the very recent coordinated through ENTSO-E and realized in most decisions of the European Commission, the following gas SUMMARY cases through co-financing. Therefore, respective infrastructure projects were supported: gas TSOs prepare and submit proposals for the • CyprusGas2EU project will receive EUR 101 million that Currently, the largest gas projects in the countries of Eastern Europe are being implemented list of Projects of Common Interest (PCI) to the should cease isolation of Cyprus from European gas market; EConnecting Europe Facility (CEF) – a special program of • Malta-Italy Gas Interconnection will be supported by EUR with the aim of diversifying the sources of gas imports — through the development of new pipeline gas supply routes and LNG infrastructure in maritime countries. At the same time, the EU for supporting single gas market connectivity. 3,7 million to conduct a study on interconnection between There are four infrastructure corridors identified as priority Italy and Malta in order to establish gas infrastructure the growth in gas demand in Eastern Europe will be limited in the future until 2030, which by the Trans-European Networks for Energy (TEN-E), towards this island; indicates the development of gas transportation infrastructure, primarily with the aim of which require urgent infrastructure development in gas in • STEP project will co-finance a study on the permit- increasing the reliability of supplies and ensuring gas transit to Western European countries. order to limit energy isolation within European gas markets, granting process with EUR 1, 7 million for the purpose of “Gazprom’s” positions on the markets of Eastern European countries will remain high owing improve security of supply and provide for alternative supply creating a new gas interconnection point between France and transit routes and sources of gas. and Spain to increase the bidirectional gas flows and unlock to the traditional partners of a Russian company. Under certain scenarios, “Gazprom” may Work on PCIs is coordinated by Regional Groups, established LNG terminals for more gas imports. increase its presence in these markets. to propose and assess candidate projects of common interest, During 2018, new rules, methodologies and approaches

14 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 15 Import & Transmission Capacity

2018 (GWh/d) Yamal LNG (Values submitted by TSO from Transparency Platform-the lowest value between the values submitted by cross border TSOs) RUSANOVSKOYE Drovyanov Norilsk Key DEg market area GASPOOL Dudinka Den market area Net Connect Germany Import Capacities Cross-Border Capacities LENINGRADSKOYE DZ LNG LY NO RU TR AT BE BG CH CZ DEg DEn DK EE ES FI FR GR HR HU IE IT LT LU LV MD MK NL PL PT RO RS RU SE SI SK SM TR UA UK Tambey Sobetta AT AT 362 1.570 AT BE 449 488 BE 152 214 271 2.102 630 BE LUDLOV BG BG 11 734 BG Barents Kara Sea CH CH 554 260 67 CH Sea CZ CZ 1.216 400 CZ DEg 554 1.681 DEg 130 198 36 87 387 931 DEg

DEn 695 DEn 335 168 907 401 4 1.106 DEn Tazov DK DK 101 DK Yamburg EE 44 EE 164 EE

ES 732 1.911 ES 225 80 ES Novyy Port

FI 249 FI FI SHTOKMAN Urengoy FR 1133 570 FR 870 587 165 FR Nyda GAMMA Novy Urengoy GR 150 48 GR 109 GR HR HR 78 54 HR PRIRAZLOM SNØHVIT Pechora Sea GULYAYEV-N Pangody SYSTEM DEVELOPMENT MAP HU 605 HU 153 3 127 HU ASKELADD MELKØYA Kharp ALBATROSS Salekhard Nadym IE IE 342 IE Hammerfest POMOR

IT 1.188 577 507 IT 1.154 636 20 IT KILDINN TO TO LT 122 325 LT 65 LT PESCHANO-OZER Norwegian Sea MURMAN 2017 / 2018 LU LU 49 38 LU Punginskoye MURMANSK LV 179 LV 68 LV Pomorskiy MD MD 1 MD Strait Murmansk Avenue de Cortenbergh 100 Avenue de Cortenbergh 100 MK MK 20 MK 1000 Brussels - BELGIUM 1000 Brussels - BELGIUM NL 399 963 NL 394 344 162 REYKJAVIK NL T +32 2 894 51 00 T +32 2 209 05 00 PL 158 1.336 PL 28 234 ICELAND PL Twitter @ENTSOG Twitter @GIEBrussels Novosibirsk PT 193 PT 144 PT [email protected] [email protected] Shatrovskoye www.entsog.eu www.gie.eu RO 1.119 RO 8 52 RO Vuktyl Lokosovo RS RS 142 RS Surgut AASTA HANSTEEN RU RU 114 RU Kandalaksha

The System Development Map 2017 / 2018 presents existing infrastructure & capacity and planned infrastructure from the perspective of the year 2018. Khanty SE SE 88 SE Sesnogorsk The respective data are based on the TYNDP 2018 unless respective ENTSOG members provided their own data. SI SI 113 29 SI The 2017 / 2018 historical data on demand & supply, incl. the winter 2017-2018, are based on data from the TSOs and GIE AGSI+ and ALSI Platforms. SK 2.028 SK 247 697 177 SK NORNE POLARLED SM SM 4 SM SKARV The Country Pro les present transmission capacities between countries (after application of the Lesser-of-rule), storage & LNG capacities according to the interconnection to White Sea HEIDRUN Tornio Manga LNG TR TR 480 TR Kem the country's transmission system and installed gas- red power generation capacity (additional data sources: GSE 2016 Storage Map, GLE 2018 LNG Map and ENTSO-E Power ASGARD UA UA 416 UA KRISTIN Statistics). The demand data represent actual country demand for the respective days/periods. The gas production re ects the maximum deliverability achieved. Solikamsk UK 2.093 1.499 UK 803 494 UK Bereznikovskoye All data provided in the map are for information purposes and shall be treated as indicative only. NJORD Total 1.920 7.184 507 4.769 7.566 48 2.000 2.414 618 636 1.829 2.448 1.953 179 0 309 0 756 11 0 272 0 100 182 0 229 0 0 4.089 931 80 738 0 0 0 FAROE74 2.514 0 0 177 972 DRAUGEN Omsk ISLANDS Mikun Under no circumstances shall they be regarded as data for commercial use. (DK) Serov DZ LNG LY NO RU TR AT BE BG CH CZ DEg DEn DK EE ES FI FR GR HR HU IE IT LT LU LV MD MK NL PL PT RO RS RU SE SI SK SM TR UA UK ORMEN LANGE Sysktyvkar Dobryanka Nizhne Tura

KEYS FROM FROM HALTENPIPE Tjeldbergodden Trondheim Tyumen

Countries Map points Data keys MEOR TRANSPORT Nyhamna NORTH Gulf of Bothnia Petropavlovsk ENTSOG Member Countries Perm PS SHETLANDS Kurgan NATIONAL WOS Sullom Voe ASGARD TS Trading Points / Market Areas Kungur ENTSOG Associated Partner PRODUCTION HEATHER PEON LANGELED Yekaterinburg MURCHINSON SNORRE KNARR Okhansk NORTHERN LIGH ENTSOG Observers VISUND STATFJORD Petrozavodsk Intra-country or intra balancing zone points GULLFAKS KVITEBJØRN Other Countries Tampen Link NORWAY SWEDEN FINLAND RUSSIA VALEMON GJOA Kyroskoski Pori LNG SIRGE HULDRA Tampere Cross-border interconnection point Nokia Transport by pipeline TROLL Pori within Europe or export point to non-EU country MARTIN LINGE VESLEFRIKK ASTANA BRAGE TROLL Imatra TOGI Chelyabinsk under 24” OSEBERG Lahti Lappeenranta FLAGS NLGP Kollsnes Hameenlinna Cross-border interconnection point VALEMON Kouvola Kirov Izhevsk 24” to 36” NORWAY Bergen with third country (import) Vyborg OUTER OGT Uva HEBRIDES BERYL Mäntsälä Kotka 36” and over ÅLAND Turku FUKA HEIMDAL LNG Terminals’ entry point ALVHEIM OSLO Espoo Kachar Lohja Tolkkinen Kustanay LANGELED NORTH ZEEPIPE STATPIPEIIA UT Primorsk Volkhov RUSSIA project S Karaganda intro transmission system VESTERLED IRA HELSINKI Udmurt - Novotroitskoie GRANE ZEEPIPE IIB Siuntio (Pölans) ALGERIA Karashurskoye 1 (Udmurd Complex) ATLANTIC GUDRUN Haugesund Inkoo Sosnovy Bor CIS Gas Reserve areas SAGE EDVARD GRIEG St. Petersburg Cherepovets GOLDENEYE BRAE Karmøy Hanko Karashurskoye 2 (Udmurd Complex) LNG Export Terminal JOHAN SVERDRUP Bygnes Kårstø Gulf of Finland Koldino Gryazovets Ust-Luga Gatchinskoye Moskovo BRITANNIA MILLER STATPIPE Tallinn gas eld BRITANNIA SLEIPNER Stavanger BALTIC CONNECTOR SLEIPNER CONDENSATE STOCKHOLM Paldiski Gatchinka St. Fergus Rafnes Narva Sea of the HebridesINNER FULMAR REV DRAUPNER Skangass Ora/ LNG Naberezhnye Chelny Ufa Kartaly Small scale LNG liquefaction facilities LIBYA HEBRIDES FORTIES Risavika (Fredrikstad) TALLINN Nevskoye Nevsk SOUTH Slantsy drilling platform EVEREST Ioskhkar-Ola Magnitogorsk

EUROPIPE II Brunnsviksholmen Nizhnekamsk LANGELED (Nynäshamn) ESTONIA Borovichi Kostroma Gas storage facilities Lysekil Borok Kineshma Velikiya Novgorod Zhetikara Third country cross-border interconnection point ULA Tetkovo North ELGIN FRANKLIN Yaroslavl Kazan GYDA Stenungsund Cheboksary Sterlitomak Acquifer Novinsk Ivanovo UGS Vallby Kile Pomary Sea EKOFISK Pärnu Ishimbay N o r t h C h a n n e l LULITA Valdai Vishni Volochok Tuymazy Cross-Border Europe VALHALL Zavolzhe Salt cavity - cavern HOD HARALD S k a g e r r a k Göteborg Göteborg JönKöping Under construction or Planned Glasgow Edinburgh GO4LNG Pskov Nizhny Novgorod Karksi Värska SYD G u l f o f Misso Depleted (Gas) eld ARNE Aalborg Gislaved Gnosjö Dubna Cross-Border third country import/export t a g e t t a K R i g a Izborsk NORD STREAM Torzhok Aleksandrov Islandmagee Moat Tver Konakovo on shore / oshore LNG Londonderry NORD STREAM 2 Korneti Bednodemyanovskoye Under construction or Planned / Derry Varberg Vladimir Ulyanovsk Cluden CATS Kantchurinskoye Twynholm Klin SNIP Skulte Yahroma Orsk Other type Musinskoye LNG Import Terminal Carrickfergus Halmstad Skallen Inčukalns Nudol Schelkovskoye Arzamas Dombarovskiy CORRIB TYRA RIGA Brighouse Bay BALTIC PIPE ETF Zelkov Otradny Sovkhoznoye Under construction or Planned Belfast |GAS MARKETS| |GAS MARKETS| Kubinka Unknown Bellanaboy LATVIA Amanakskoye GTF DENMARK Pochino Teesside Tolyatti Dmitrievskoye Orenburg LANGELED SOUTH SEAL Iecava ISLE OF MAN Rezekne MOSCOW Kiryushkinskoye LNG Export Terminal BREAGH Douglas B/13 Liepaja Samara Gas storage projects Under construction or Planned ZEEPIPE Tuma Saransk EUROPIPE II Egtved Kasimov Kasimovskoye Michailovskoye Barrow FRANPIPE Aktyubinsk Nybro Kieménai INTERCONNECTOR 2 v Gormanston Kurš Uvyazovskoye Nikolsk Syzran Chapayevsk IRELAND INTERCONNECTOR 1 Hornsea EUROPIPE COPENHAGEN ėnai Small scale LNG liquefaction facilities I r i s h Daugavpils multiple storage facilities v Belousovo Loughshinny Hatfield Moor Malmö Etzel* Aldbrough NORPIPE Siauliai Dorogobuzh Serpukhov Ryazan Under construction or Planned S e a Leeds Klaipéda LNG (FSRU) Istve operated by dierent SSOs Version : November 2018 Galway DUBLIN MURDOCH Dragør KKP Navapolatsk Yakshunov Akshabulak Panevėžys Vitebsk Smolensk Mikhailov Mikhailov NGT B a l t i c S e a Kaluzhskoye NOGAT Visaginas Kaluga Manchester Faxe Trelleborg W. SOLE BALTIC PIPE Penza Point of Ayr Easington Ellund Orsha IBP MARKHAM LITHUANIA AMETHYST AUDREY Jurbarkas Hole House Farm DEUDAN Korablino Morshansk Uralsk Limerick Theddlethorpe GALLEON Tula Jauniunai Kirov Shannon LNG LANCELOT Kosakowo Cherepet Volsk Balakovo Nüttermoor Kaliningradskoye Kaunas Mogilev EUROPEAN DEMAND Šakiai Kotlovka Krupskaya Skopin Jemgum Yelshano-Kurdyumskoye 1 LEMAN Groningen Etzel* Kiel-Rönne Petrovsk Aralsk Kyzi-Orda Bacton Dornum Greifswald FSRU Kaliningrad Waterford UNITED Quarnstedt Yelshano-Kurdyumskoye 2 Zholsaly Birmingham NBP HEWETT Krummhörn Brunsbüttel LNG Daszewo Polish Baltic RUSSIA VILNIUS Yelshanka GIPL Talovskoie NGT Krummhörn Sea Coast YAMAL Hetlingen Świnoujście Michurinsk KINGDOM Bremen-Lesum Hamburg Gdansk Misensk Tambov Saratov Cork Warwick INTERCONNECTOR BBL Stepnovskoye 1 Novokazlinski Inch Milford Haven Grijpskerk NETRA Emden Sülstorf NEL Bryansk EU Total 2017 5.085.051 GWh Inisfree LNG Harsefeld Kamminke Peschano-Umetskoye Stepnovskoye 2 South Hook LNG NOGAT MINSK Osipovskoye Unecha Dragon LNG Möckow Płoty Orel Balgzand Oude Statenzijl Oldenburg NEL Kraak Osipovich Lipetsk KINSALE HEAD Zuidwending I Steinbrink Yelets SEVEN HEADS Bunde KAZAKHSTAN Julianadorp Bunder-Tief Kromy Norg NEL Szczecin Bergermeer Wardenburg Sionim Nezvizhskaya Babryusk Cardi EUGAL OPAL Novozybkov Pogar Kinsale Southwest GIPL Alkmaar Vlieghuis Peckensen Gomel Aleksandrov Gay EU Apr 2017 - Sep 2017 (Summer) 1.816.374 GWh (Winter) 3.377.053 RHG Bozoi EU Oct 2017 - Mar 2018 GWh NEL Steinitz Damasławek Nordlohne POLAND Bristol Channel LONDON AMSTERDAM VHP-GASPOOL Tietierowka Uelsen Rehden Bazoy Humbly Grove DEMAND EU Min. Day (13/08/2017) 7.074 GWh/d EU Max. Day (28/02/2018) 27.906 GWh/d Isle of Grain Emsbüren NOWAL Rehden Ahlten BELARUS Maasvlakte Enschede Mogilno EuRoPoL EuRoPoL Gate Terminal Rotterdam TTF Epe* Drohne BERLIN Kursk Kamishyn Mallnow Kondratki Winterswijk Hannover Berlin EuRoPoL ZBG Mozyr Ostrogozhsk THE NETHERLANDS Legden Kienbaum Sudzha Stary Oskol Zevenaar Münster Buchholz Lwòwek Wloclawek Pribugskoye Aral Elten Xanten Empelde Rüdersdorf Rembelszczyzna Kobryn ISLES OF Poznan Wysokoje Makat SCILLY Zeebrugge Hilvarenbeek Werne JAGAL EUGAL Dunkerque Zelzate Stassfurt OPAL Sea WEDAL Olyshivske EU Daily gas demand pro le Zandvliet Guben Gubin GWh/d Poppel ZEELINK Dortmund Mikhailova Tegelen Essen Katharina WARSAW Loenhout Bernburg Chervonopartyzanske Belgorod Atyrau 30,000 Alveringem Obbicht MIDAL Kalach Bizay Seasonal Pro le / GWh/d Dilsen Düsseldorf Frolovo 27.906 GWh/d on 28/02/2018 ‘s-Gravenvoeren Odolanów UPU English Channel Haanrade Kassel Allmenhausen Lodz UZBEKISTAN

BRUSSELS ZTP Leipzig Valuyki Serebryanka Lille EUGAL Progress Bocholtz Lasów Broichweiden Kirchheilingen Bad Lauchstädt OPAL Wierzchowice 25,000 Stolberg Wronów Pisarevka Quévy Eynatten Kharkiv Cherbourg BELGIUM Raeren/Lichtenbusch Novopskov Beyneu Kungrad Taisnières Reckrod Sayda Wroclaw VTP-GAZ-SYSTEM KIEV Solokhivske Sokhranovka Blaregnies Herbstein STEGAL Volgograd Olbernhau Deutschneudorf Soyuz Volgogradskoye Hora Svaté Kateřiny 20,000 Krasnopopivske Nukus Le Havre TENP Brandov GDLux Brandov Lannion Brâs / Pétange MIDAL GERMANY Kehychivske Gournay-sur-Aronde Stockstadt Soyuz Caen LUX. EKKR Urgenich 15,000 Kędzierzyn-Koźle Brzeznica Kyiv - Western Ukraine Gazli Brest Saint-Clair-sur-Epte Hähnlein Swarzow Husow UPU Verhunske Gernsheim Rimpar Hradec Králové Katowice Tworzeń Proletarske Remich Eschenfelden GAZELLE Cherkasy Khiva Atlantic Ocean Saint-Illiers LUX. Frankenthal MEGAL PRAGUE (Urengoy-Pomary-Uzhgorod) Lampertheim Oświęcim Jaroslaw Oparske Yilanly Germigny-sous-Coulombs Rothenstadt Progress Háje CZECH STORK II Cieszyn Rzeszow Uherske (XIV-XV) Belayta Kalitva TENP MEGAL Pogórska Wola Astrakhan 10,000 Sandhausen Plzeň Třanovice Skoczów Drozdovychi Lviv Cheppy Obergailbach MEGAL Waidhaus Drozdwicze VHP NCG REPUBLIC Štramberk STORK UKRAINE Say-Otes PARIS Trois Fontaines Schwandorf Strachocina Hermanowice Saint-Arnoult Medelsheim Karlsruhe Donetsk Prokhorovka NORD des Bois SCHWARZ OTE CPI Dashavske LEITUNG Lobodice Volgodonsk Beynes Profond Au Bilche-Volytsko-Uherske 5,000 Cerville am Rhein WAL LSF SDKRI 7.074 GWh/d on 13/08/2018 D Stuttgart MEGAL Le Mans Beynes Supérieur Brno Uhřice Dierrey-Saint-Julien Leonberg Žilina Poprad Ivano-Frankivsk Auvers-le-Hamon Forchheim Dolni Bojanovice TENP České Budějovice Orleans Morelmaison Bohorodchanske Dolni Dunajovice Břeclav Platovo Novy Uzen Wertingen Schmidhausen Tvrdonice Artezian

Oberkappel Reinthal SLOVAKIA Budince Oleksiivka LFF Ananyiv - Kremenchuk Elista Montoir de Bretagne WAG Tallesbrunn BACI Lanžhot Bierwang Zvolen Jablonov Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Nantes MONACO Voisines Finsing Schönkirchen / Reyersdorf Nad Turňou Košice Uzhgorod Rostov-na-donu Kuschevskoye Soings-en-Sologne Fronhofen-Trigonodus Burghausen Linz Vel’ké München Penta West Nitra Kapušany Aktau 2017 2018 Chémery Wolfersberg Baumgarten Láb* Anan’iv SDKRI Mariupol Fallentor Wolfersberg HAG Vel'ké Zlievce Céré-la-Ronde Inzenham VIENNA Ivánka Pri Nitre Thann BRATISLAVA Beregovo Wallbach Thayngen Inzenham-West Haidach Balassagyarmat Beregdaróc Yeysk Kufstein Kittsee Berdyansk Oltingue Basel Lindau Pfronten Salzburg Puchkirchen Tekovo Rodersdorf Kiefersfelden CEGH Mosonmagyaróvár 7 Fields Aigelsbrunn Leiblach ATI Mediesu Aurit Palleau Zürich MOLDOVA EUROPEAN SUPPLY La Rochelle TRF Breitbrunn Haidach* Győr Tikhoretsk LIECHT. TAG VAL DE SAÔNE BERN Innsbruck BUDAPEST Budennovsk TURKMENISTAN Nussdorf/Zagling AUSTRIA Hajduszoboszlo Ungheni EASTRING Stavropol Bekdash Hajdúszoboszló Satu Mare CHISINAU Grebenyky Graz Ercsi Vecsés Yuzhnyi Sea of Azov Iaşi SWITZERLAND Weitendorf GWh/d EtrezEtrez Pusztaederics Odesa Krasnodarskoye Armavir B a y o f B i s c a y FRANCE SOL Adony Griespass Arnoldstein Klagenfurt TAG II KERCH Krasnodar v Târgu Mureş Mozdok 30.000 UGS WITHDRAWAL RUSSIA Geneva Jura TAG I Murfeld Cersak Siófok Severo-Stavropolskoye 2 Makhachkala Passo Gries Kardoskút-Pusztaszolos TârguUGS-N-233 Mureş Kaushany ASHGABAT Tarvisio Városföld STREIKOV Bordano Pince Severo-Stavropolskoye 1 Lyon v Tornyiszentmiklós Grozny LIBYA NATIONAL PRODUCTION Kidričevo Sarmasel Caspian Sea Collalto HUNGARY GOLITSYNO Makyop ALGERIA DEMAND C LYONNAIS Castillon Trento Flaibano Nagykanizsa Szöreg-1 Hlibovske Nalchik AR Bizzarone Settala SLOVENIA Rogatec Onesti ATI, SDKRI, AI Kislovodsk Derbent Turkmenbashi NORWAY UGS INJECTION Zsana-Nord Csanádpalota Coroi Chernomorsk Vladikavkaz Balkanabat Bordeaux Hauterives SHTORMOV Novorossiysk Mugardos Ferrol Brugherio Ajdovščina LJUBLJANA MGP ODESSA KRYM Anapa Sergnano Gorizia Subotica Tymyauz 20.000 LNG EXPORTS Kozármisleny Horia Cetatea de Balta Dzhubga Saint-Avit Grenoble Istrana Sempeter ZAGREB Kiskundorozsma Nădlac Arad Simferopol A Coruña Cornegliano Orlovka Hazar Guitriz Tersanne Milano Trieste Drávaszerdahely Mediaș EASTRING Gelendzhik Tuapse Siazan Lučko Sombor Musel / Gijon Venezia Sibiu Sochi Trans-Caspian Pipeline Ripalta Okoli Donji Miholac BAKU Oviedo Torino Koper Kozarac Isaccea Lugo GAVIOTA Umag Karlovac Hateg Yalta Porto Rijeka Osijek Garadag SUPPLY Santander Bordolano Viro Zlobin Sevastopol GEORGIA Gaviota ROMANIA Tskhinvali Izaute Bačko Novo Selo Ismailly Galmaz Cavarzere Omisalj Banatski Dvor Sheki ERIDAN Jupa Pontevedra Bilbao Cortemaggiore Vel. Kladusa Slobodnica Sotin 10.000 Lussagnet Porto Levante Krk LNG Krk Sukhumi Sangachal Bilbao GASCOGNE MIDI Lička Zugdidi Kutaisi SHAH Vodnjan Jasenica Cazin Novi Sad COBALCESCU TBILISI DENIZ Villafranca Castropodame Biriatou Lussagnet Minerbio Rakovica Brod LEBADA Mingachevir S.Sebastián ARTERE DE L’ADOUR Ravenna Pula Tržac Bos. Krupa Urziceni Tuy Ourense del Bierzo Bologna Modrica Bibeşti Bilciuresti Okarem Lacq Barran Genova Bihač Banja Luka Leon Irun Pau Toulouse PIPELINE Aghstafa Valença do Minho BELGRADE Kulevi (Poti) Akhaltsikhe Gospič Podisor BUCHAREST TRANS-BALKAN Sabirabad Vitoria MIDCAT Manosque ITALY BOSNIA Horezu DOINA AGRI South Caucasus Pipeline (SCP) VIP PIRINEOS Cotignola & San Potito Loznica Balaceanca Constanța Supsa Larrau Cruzy (Hérault) Saint-Martin-de-Crau Nice Panigaglia CROATIA Mehedinti ANA 0 San Marino HERZEGOVINA AGRI Kobuleti Vale Pamplona Travnik LUCEAFARUL AZERBAIJAN Firenze S.M. Zadar Zenica Negru Voda Logroño Zvornik Ghercesti Silistra Agdam Burgos Barbaira Marseille Knin Kardam DOMINO Palencia Fos Tonkin OLT Oshore LNG Toscana G.Vakuf Giurgiu Vale de Frades Fos Ruse Villar de Arnedo Cavaou Benkovac Stepanakert

Serrablo P Toulon Ancona Zamora L i g u r i a n Livorno Kiseljac STE IBR Valchi Dol WHITE STREAM Black Sea Gyumri Kord Kui Valladolid AND. S e a SARAJEVO (option 1) Artvin Lachin G u l f o f Recanati Kirevo-Zaječar BLUE STREAM Soria -10.000 Huesca Le Perthus Imotski Posušje Oryahovo Goris L i o n Piombino IAP Kozloduy Provadia Varna Rize Kars Astara Perugia A Sdac eira t Split KAVARNA ARMENIA Celorico da Beira Figueras PSV Mostar Pleven Sinop Mangualde Rio Marina Rupcha Trabzon Kapan Cantanhede STEP SERBIA EASTRING Salamanca ADRIATICA Niš GALATA YEREVAN Barbolla Zaragoza Chiren KALIAKRA Carriço Bastia Ploče Guarda Adradas Cellino Ordu Giresun Nakchivan Lleida Lozenets Segovia Martorelli Hostalrich Cellino PIPELINE IAP Dimitrovgrad Samsun AZ. Carriço Ávila MONTENEGRO Novi Iskar Horasan Nakhchivan Burgas Bayburt Bazargan -20.000 Yela Castelnou CORSICA Chieti Neka VIP IBERICO SOFIA Gümüshane Trans-Anatolian Pipeline (TANAP) L’Aquila UNMI Pristina BULGARIA ITB Bartin MADRID Guadalajara MIDCAT Arbós Barcelona PODGORICA Agri Ajaccio KOSOVO Tivissa PORTUGAL Tarragona Dupnitsa Ihtiman Stara Zagora Karabük PVB Amasya Rasht GALSI Srtandszha ROME Fiume Treste IAP Sopot Kyustendil Malkoclar Eregli Tokat Carregado Zidilovo Tabriz Bucelas Cáceres Toledo Teruel Campobasso Tetovo -30.000 Kirklareli Erzincan LISBON Cuenca Cankiri Castor SKOPJE Edirne Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Gostivar Novo Selo SPAIN IGB Setubal Campo Maior Badajoz Kulata Petrich Istanbul Van B a l e a r i c Porto Torres Bari FYRoM Sivas Castellón Prilep Cumulative curve 2017 2018 de la Plana Olbia T y rh e n ai nS e a Sidirokastron Xanthi Sakarya S e a Sassari TIRANA Komotini Qazvin Gevgelija Karperi ANKARA Yozgat Ciudad Real Sagunto MENORCA Marmara Kafasan Kavala Tekirdag Kuzey Marmara IAP Idomeni Ereglisi Alghero Napoli Kilkis Alexandroupolis Kirikkale Trans-Anatolian Pipeline (TANAP) Sines Potenza Dumrea Bitola TAP Elazig Valencia Massafra Matagiola Brindisi Kipi Palma de Mallorca Nuoro IGI South Kavala Albacete Taranto TAP Fier EU Storage / Injection / Withdrawal MALLORCA Nea Messimvria Thessaloniki Alexandroupolis LNG Bursa TAP San Foca TAP Karacabey Eskisehir Kirsehir Malatya Oristano SARDINIA Vlorë Seasonal Pro le / GWh/d Otranto Katerini Canakkale Trans-Anatolian Pipeline (TANAP) TEHRAN IBIZA ALBANIA Gulf of Saros Kutahya

GWh/d Cordoba Kayseri GALSI

12,000 TIRRENICA PIPELINE IGI Nevsehir Adiyaman Balikesir TURKEY Sevilla 11.566 GWh/d WITHDRAWAL on 28/02/2018 Jaén Alicante EP #2, Decemder 2019-February 2020 Tuz Gölu CORPORATE MAGAZINE Cepconsult s.r.o. POSEIDON Huelva Murcia Porto Vesme Cagliari Larissa Aksaray 10,000 Key Trikala Marismas Porto Botte Afyonkarahisar Aksaray IRAN Sarroch Volos Nigde Kahramanmaras Highest injection Highest withdrawal Withdrawal max = 11.566 GWh/d A e g e a n Sanliurfa Thesprotia Ampelia 8,000 Highest stock level Lowest stock level Injection max = 6.036 GWh/d Granada Florovouni Catanzaro S e a Usak Cartagena EAST MED Mosul Cádiz Konya Gaziantep ITGEP Málaga Mediterranean Sea Aliaga Arbil 6,000 Lamia Manisa Motril Almeria Turgutlu Tarsus Ceyhan Gioia Tauro Qom I o n i a n Adana Kilis Halkida Izmir Isparta Aliveri Tarsus Sanandaj 4,000 Tarifa S e a Karaman Palermo Messina Thiva Burdur TOTAL SEASONAL INJECTION : 784.342 GWh Aydin Icel Iskenderun S t r a i t o f G i b r a l t a r Denizli Halab 2,000 Ceuta GREECE ATHENS Kirkuk Mazara del Vallo MEDGAZ 89,21% FULL on 29/10/2017 Tangier ALGERIA-SARDINIA (GALSI) -ITALY Revythoussa Hatay 0 Agia Triada Antalya Mugla 17,83% FULL on 01/04/2018 Porto Empedocle LNG Agrigento Megalopoli ALGIERS TRANSMED -2,000 Skikda Kermanshah Annaba Koudiet Eddraouch Béjaïa El Haouaria Gela SYRIA Baiji Borujerd -4,000 TUNIS Baniyas TOTAL SEASONAL WITHDRAWAL : 896.046 GWh Arzew Oran -6,000 AGP Melilla Homs Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar RABAT AGP Isfahan MEG Beni Saf 6.036 GWh/d INJECTION on 04/06/2017 2017 2018 MALTA Tripoli MEDGAZ Malta LNG (FSRU) EAST MED NICOSIA LA VALETTA Hadithah CYPRUS Vassilikos BEYROUTH Vassilikos AGP EU Supply Sources Casablanca Cyprus Onshore LNG storage C R E T A DAMASCUS 40% Seasonal & Yearly Supply Shares EAST MED BAGHDAD GREEN STREAM LEBANON MAGREB-EUROPE GAS (MEG) GAZODUC ENRICO MATTEI 35% GZ0-GZ5 AGP MEDGAZ GK1-GK4 JUGURTA / MISKAR APHRODITE IRAQ GG1-GG2 Haifa L e v a n t i n e 30% Key Gabes Mediterranean Sea Summer Supply Winter Supply TUNISIA B a s i n TAMAR Hadera oshore

Mafraq 25% Tel Aviv MARI-B Ahwaz MOROCCO Hassi R' Mel TAMAR AGP SCARAB Ashdod AMMAN TRIPOLI SAFFRON 20% MARINE 1 and 2 JERUSALEM BALTIM N KERSH Askhkelon Al-Khums ROSETTA BALTIM E AKEN KAROUS TAO EMG Pipeline Marrakesh ABU QIR N BALTIM S Yearly Supply ABU SIR KAMOSE Damietta THEKAH 15% ROSETTA DARFEEL ISRAEL Al Nasiriyah (01.01.2017 - 31.12.2018) Misurata Idku El Arish Tobruk Port Said Al Basrah Marsa Matruh Abadan Bandar Mahshahr Benghazi Alexandria Arab Gas Pipeline (AGP) JORDAN 10% Agadir Hassi Messaoud Trans-Sinai Gasline Egypt Gas Pipeline (AGP)

AGP

5% ArabGas Pipeline (AGP) KUWAIT Ras Bahregan CAIRO A’youn Moussa Eilat 0% Taba Al ‘Aqabah KUWAIT CITY

NP Russia Norway Algeria Libya LNG TRANS-SAHARA GAS PIPELINE Marsa El Brega Mina al Ahmadi CANARY ISLANDS Mina Abdulla Santa Cruz de Tenerife Persian

Las Palmas Gulf Arico-Granadilla LNG EU Supply Sources (Tenerife)

40% Shares on the lowest & the highest demand days Arinaga LNG (Gran Canaria) Sharm el-Sheikh Kangan 35% ALGERIA LIBYA EGYPT SAUDI ARABIA Laayoune Hurghada Asyut 30% Key Safaga Ras Tannurah Min. Day Max. Day SOUTH PARS / NORTH DOME

NVGC 25% Dhahran BAHRAIN Qena Abqaiq MANAMAH Ras Laan 20%

Dukhan QATAR 15% DOHA Umm Bab Red Umm Sa’id 10% RIYADH Sea ABQAIQ - YANBU WESTERN 5% Jebel D hanna SAHARA MAURITANIA MALI Yanbu Aswan 0% UAE NP Russia Norway Algeria Libya LNG UGS on the minimum demand date UGS is not a part of the supply but of the demand due to the lling of storages AUSTRIA BELGIUM BOSNIA-HERZ. BULGARIA CROATIA CZECH REPUBLIC DENMARK ESTONIA FINLAND FRANCE FYROM GERMANY GREECE HUNGARY IRELAND ITALY LATVIA LITHUANIA LUXEMBURG NETHERLANDS POLAND PORTUGAL ROMANIA SLOVAKIA SLOVENIA SPAIN SWEDEN SWITZERLAND UNITED KINGDOM EU Supply Sources Total 2017 22.000 1 Jan 2017 to 31 Dec 2017 Minimum and Maximum use of import capacity (GWh/d) Summer 1 Apr 2017 to 30 Sep 2017 Winter 17.000 1 Oct 2017 to 31 Mar 2018 Key Min. Flow Max. Flow Total 2017 95.165 GWh Total 2017 182.058 GWh Total 2017 1.683 GWh Total 2017 32.805 GWh Total 2017 31.219 GWh Total 2017 90.581 GWh Total 2017 29.219 GWh Total 2017 5.217 GWh Total 2017 24.870 GWh Total 2017 492.964 GWh Total 2017 2.623 GWh Total 2017 994.500 GWh Total 2017 52.134 GWh Total 2017 109.208 GWh Total 2017 54.851 GWh Total 2017 788.142 GWh Total 2017 13.250 GWh Total 2017 24.193 GWh Total 2017 8.986 GWh Total 2017 377.991 GWh Total 2017 187.483 GWh Total 2017 68.155 GWh Total 2017 118.165 GWh Total 2017 52.696 GWh Total 2017 9.700 GWh Total 2017 345.507 GWh Total 2017 8.770 GWh Total 2017 38.781 GWh Total 2017 844.136 GWh Summer 30.153 GWh Summer 64.416 GWh Summer 379 GWh Summer 12.095 GWh Summer 11.217 GWh Summer 27.191 GWh Summer 9.538 GWh Summer 1.590 GWh Summer 9.435 GWh Summer 142.290 GWh Summer 682 GWh Summer 398.700 GWh Summer 23.355 GWh Summer 31.531 GWh Summer 25.876 GWh Summer 277.634 GWh Summer 4.007 GWh Summer 9.480 GWh Summer 3.183 GWh Summer 136.042 GWh Summer 73.246 GWh Summer 35.165 GWh Summer 33.647 GWh Summer 15.785 GWh Summer 3.452 GWh Summer 145.600 GWh Summer 3.132 GWh Summer 10.605 GWh Summer 276.949 GWh 12.000 Winter 63.619 GWh Winter 121.109 GWh Winter 1.299 GWh Winter 19.997 GWh Winter 20.037 GWh Winter 63.940 GWh Winter 20.495 GWh Winter 3.846 GWh Winter 16.828 GWh Winter 353.537 GWh Winter 1.955 GWh Winter 655.800 GWh Winter 27.077 GWh Winter 77.742 GWh Winter 29.453 GWh Winter 514.295 GWh Winter 9.964 GWh Winter 15.166 GWh Winter 5.938 GWh Winter 250.460 GWh Winter 120.899 GWh Winter 31.878 GWh Winter 83.799 GWh Winter 37.132 GWh Winter 6.252 GWh Winter 204.985 GWh Winter 6.319 GWh Winter 28.742 GWh Winter 584.491 GWh

Capacity Max. Day 582 GWh/d Max. Day 1.031 GWh/d Max. Day 14 GWh/d Max. Day 162 GWh/d Max. Day 174 GWh/d Max. Day 592 GWh/d Max. Day 194 GWh/d Max. Day 45 GWh/d Max. Day 179 GWh/d Max. Day 3.253 GWh/d Max. Day 17 GWh/d Max. Day 5.894 GWh/d Max. Day 248 GWh/d Max. Day 704 GWh/d Max. Day 216 GWh/d Max. Day 4.183 GWh/d Max. Day 114 GWh/d Max. Day 119 GWh/d Max. Day 50 GWh/d Max. Day 2.203 GWh/d Max. Day 942 GWh/d Max. Day 263 GWh/d Max. Day 697 GWh/d Max. Day 326 GWh/d Max. Day 58 GWh/d Max. Day 1.772 GWh/d Max. Day 69 GWh/d Max. Day 203 GWh/d Max. Day 4.513 GWh/d (28/02/2018) (28/02/2018) (27/02/2018) (28/02/2018) (28/02/2018) (27/02/2018) (28/02/2018) (27/02/2018) (28/02/2018) (27/02/2018) (28/02/2018) NIGER (28/02/2018) (20/12/2017) (28/02/2018) CHAD (05/03/2018) (28/02/2018) (28/02/2018) (02/03/2018) (27/02/2018) SUDAN(01/03/2018) (28/02/2018) (05/12/2017) (26/02/2018) (28/02/2018) (28/02/2018) (05/12/2017) (28/02/2018) (01/02/2018) (01/03/2018) Min. Day 97 GWh/d Min. Day 240 GWh/d Min. Day 1 GWh/d Min. Day 44 GWh/d Min. Day 28 GWh/d Min. Day 75 GWh/d Min. Day 25 GWh/d Min. Day 5 GWh/d Min. Day 38 GWh/d Min. Day 417 GWh/d Min. Day 1 GWh/d Min. Day 1.535 GWh/d Min. Day 47 GWh/d Min. Day 114 GWh/d Min. Day 82 GWh/d Min. Day 840 GWh/d Min. Day 11 GWh/d Min. Day 27 GWh/d Min. Day 11 GWh/d Min. Day 479 GWh/d Min. Day 321 GWh/d Min. Day 83 GWh/d Min. Day 112 GWh/d Min. Day 55 GWh/d Min. Day 13 GWh/d Min. Day 610 GWh/d Min. Day 11 GWh/d Min. Day 36 GWh/d Min. Day 713 GWh/d 7.000 (15/07/2017) (30/07/2017) (12/08/2017) (23/07/2017) (18/06/2017) (05/08/2017) (22/07/2017) (24/06/2017) (17/06/2017) (06/08/2017) (15/06/2017) (28/05/2017) (16/04/2017) (22/07/2017) (11/06/2017) (15/08/2017) (23/07/2017) (08/07/2017) (15/08/2017) (04/06/2017) (04/06/2017) (25/12/2017) (02/07/2017) (11/06/2017) (05/08/2017) (20/08/2017) (23/07/2017) (04/07/2017) (15/07/2017) EU Max. Day 582 GWh/d EU Max. Day 1.031 GWh/d EU Max. Day 12 GWh/d EU Max. Day 162 GWh/d EU Max. Day 174 GWh/d EU Max. Day 576 GWh/d EU Max. Day 194 GWh/d EU Max. Day 43 GWh/d EU Max. Day 179 GWh/d EU Max. Day 3.212 GWh/d EU Max. Day 17 GWh/d EU Max. Day 5.894 GWh/d EU Max. Day 194 GWh/d EU Max. Day 704 GWh/d EU Max. Day 189 GWh/d EU Max. Day 4.183 GWh/d EU Max. Day 114 GWh/d EU Max. Day 110 GWh/d EU Max. Day 48 GWh/d EU Max. Day 2.193 GWh/d EU Max. Day 942 GWh/d EU Max. Day 169 GWh/d EU Max. Day 669 GWh/d EU Max. Day 326 GWh/d EU Max. Day 58 GWh/d EU Max. Day 1.337 GWh/d EU Max. Day 69 GWh/d EU Max. Day 203 GWh/d EU Max. Day 4.321 GWh/d DEMAND EU Min. Day 107 GWh/d EU Min. Day 251 GWh/d EU Min. Day 1 GWh/d EU Min. Day 51 GWh/d EU Min. Day 57 GWh/d EU Min. Day 91 GWh/d EU Min. Day 37 GWh/d EU Min. Day 5 GWh/d EU Min. Day 44 GWh/d EU Min. Day 422 GWh/d EU Min. Day 2 GWh/d EU Min. Day 1.665 GWh/d EU Min. Day 108 GWh/d EU Min. Day 121 GWh/d EU Min. Day 131 GWh/d EU Min. Day 846 GWh/d EU Min. Day 12 GWh/d EU Min. Day 45 GWh/d EU Min. Day 13 GWh/d EU Min. Day 525 GWh/d EU Min. Day 352 GWh/d EU Min. Day 148 GWh/d EU Min. Day 148 GWh/d EU Min. Day 59 GWh/d EU Min. Day 14 GWh/d EU Min. Day 612 GWh/d EU Min. Day 15 GWh/d EU Min. Day 38 GWh/d EU Min. Day 1.155 GWh/d 2.000 Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum Maximum 44 GWh/d - GWh/d - GWh/d 3 GWh/d 37 GWh/d 5 GWh/d 170 GWh/d - GWh/d - GWh/d - GWh/d - GWh/d 189 GWh/d - GWh/d 68 GWh/d 120 GWh/d 171 GWh/d - GWh/d - GWh/d - GWh/d 1.936 GWh/d 74 GWh/d - GWh/d 314 GWh/d - GWh/d - GWh/d 3 GWh/d 2 GWh/d - GWh/d 2007 GWh/d Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production Production - PRODUCTION NP Russia Norway Algeria Libya LNG UGS -3.000 Deliverability 1.084 GWh/d Deliverability 169 GWh/d Deliverability - GWh/d Deliverability 36 GWh/d Deliverability 61 GWh/d Deliverability 527 GWh/d Deliverability 197 GWh/d Deliverability - GWh/d Deliverability - GWh/d Deliverability 2.389 GWh/d Deliverability - GWh/d Deliverability 6.972 GWh/d Deliverability - GWh/d Deliverability 836 GWh/d Deliverability - GWh/d Deliverability 2.769 GWh/d Deliverability 330 GWh/d Deliverability - GWh/d Deliverability - GWh/d Deliverability 3.061 GWh/d Deliverability 542 GWh/d Deliverability 85 GWh/d Deliverability 274 GWh/d Deliverability 475 GWh/d Deliverability - GWh/d Deliverability 222 GWh/d Deliverability 12 GWh/d Deliverability - GWh/d Deliverability 1.691 GWh/d STORAGE Injection 864 GWh/d Injection 88 GWh/d Injection - GWh/d Injection 34 GWh/d Injection 45 GWh/d Injection 447 GWh/d Injection 101 GWh/d Injection - GWh/d Injection - GWh/d Injection 1.220 GWh/d Injection - GWh/d Injection 3.989 GWh/d Injection - GWh/d Injection 473 GWh/d Injection - GWh/d Injection 1.672 GWh/d Injection 187 GWh/d Injection - GWh/d Injection - GWh/d Injection 1.344 GWh/d Injection 305 GWh/d Injection 24 GWh/d Injection 237 GWh/d Injection 411 GWh/d Injection - GWh/d Injection 127 GWh/d Injection 4 GWh/d Injection - GWh/d Injection 1.458 GWh/d CAPACITIES WGV 94.629 GWh WGV 8.183 GWh WGV - GWh WGV 5.852 GWh WGV 5.530 GWh WGV 37.430 GWh WGV 12.300 GWh WGV - GWh WGV - GWh WGV 134.550 GWh WGV - GWh WGV 260.288 GWh WGV - GWh WGV 67.125 GWh WGV - GWh WGV 187.574 GWh WGV 25.520 GWh WGV - GWh WGV - GWh WGV 150.798 GWh WGV 33.201 GWh WGV 3.570 GWh WGV 32.658 GWh WGV 36.006 GWh WGV - GWh WGV 31.619 GWh WGV 105 GWh WGV - GWh WGV 50.812 GWh

Send-out - GWh/d Send-out 449 GWh/d Send-out - GWh/d Send-out - GWh/d Send-out - GWh/d Send-out - GWh/d Send-out - GWh/d Send-out - GWh/d Send-out - GWh/d Send-out 1.230 GWh/d Send-out - GWh/d Send-out - GWh/d Send-out 150 GWh/d Send-out - GWh/d Send-out - GWh/d Send-out 543 GWh/d Send-out - GWh/d Send-out 122 GWh/d Send-out - GWh/d Send-out 436 GWh/d Send-out 158 GWh/d Send-out 356 GWh/d Send-out - GWh/d Send-out - GWh/d Send-out - GWh/d Send-out 1.911 GWh/d Send-out - GWh/d Send-out - GWh/d Send-out 1.645 GWh/d -8.000 LNG CAPACITIES Storage - GWh Storage 2.529 GWh Storage - GWh Storage - GWh Storage - GWh Storage - GWh Storage - GWh Storage - GWh Storage - GWh Storage 9.069 GWh Storage - GWh Storage - GWh Storage 861 GWh Storage - GWh Storage - GWh Storage 3.227 GWh Storage - GWh Storage 1.153 GWh Storage - GWh Storage 3.575 GWh Storage 2118 GWh Storage 2.582 GWh Storage - GWh Storage - GWh Storage - GWh Storage 22.762 GWh Storage - GWh Storage - GWh Storage OMAN13.869 GWh

Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed Installed gas- red 4.841 MWe gas- red 6.688 MWe gas- red - MWe gas- red 563 MWe gas- red 743 MWe gas- red 1.226 MWe gas- red 2.262 MWe gas- red 200 MWe gas- red 1.865 MWe gas- red 11.851 MWe gas- red 250 MWe gas- red 30.582 MWe gas- red 4.269 MWe gas- red 4.120 MWe gas- red 4.215 MWe gas- red 44.283 MWe gas- red 1.031 MWe gas- red 560 MWe gas- red 136 MWe gas- red 18.433 MWe gas- red 2.337 MWe gas- red 4.607 MWe gas- red 1.829 MWe gas- red 1.106 MWe gas- red 455 MWe gas- red 32.158 MWe gas- red 849 MWe gas- red - MWe gas- red 31.124 MWe -13.000 NOUAKCHOTT POWER GENERATION capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity capacity |GAS MARKETS| |ELECTRICITY MARKETS|

were developed by respective gas Regional Groups and most vulnerable situation with regard to ensuring gas in March 2019 they should be adopted. Simultaneously, security, are very active. Preliminary list of PCIs for gas consultations on the new PCI list of gas projects have infrastructure also indicates several options with urgent taken place along with preliminary agreed list of projects, deadlines in 2020 for some projects in Balkan region, in BELARUS NUCLEAR published in February 2019. Regional Groups should then particular, Croatia, thus increasing options for financial work on the list according to approved methodologies and support. select respective priority projects. Respective proposals Poland is pushing for realization of the Baltic pipe to gain should be then transferred to the European Commission access to Norwegian gas via Denmark. Together with the later and proceed until the final decision in a form of a regulation, they are ready to co-finance the construction and recently POWER PLANT supported also by European Parliament and the EU Council submitted an application to the Swedish Government for a is made. Under the best scenario, the so-called forth PCI list permit for the pipeline’s routing through Sweden’s exclusive is expected to be approved by the end of May 2019. economic zone. In March 2019, the European Commission supported the Given the above, prospects of realization of new gas decision on providing another EUR 750 million for CEF interconnections in the CEE region is rather moderate, as financing of PCI under the competitive call of proposals, most of Member States would prefer to wait on co-financing “BELNPP”, which will end in middle June and final decision is expected from third parties. This creates unique opportunities for by September. So far it is hard to predict which gas Russia to be engaged at least in SGC Regional Group interconnections might gain financial support. However, activities. This could offer financial support to construct some activities, undertaken by Member States, will at interconnections, which would allow Russian gas from least facilitate decision making process to their favor. For Turkish stream to flow up to Austria through the territories ITS PROSPECTS instance, Poland and Baltic states, which also have the of Bulgaria, Serbia and Hungary.

KEYS AND CHALLENGES Countries Map points Data keys ENTSOG Member Countries Trading Points/Market Areas NATIONAL ENTSOG Associated Partner Intra-country or intra balancing zone PRODUCTION FOR THE COUNTRY ENTSOG Observers points Other Countries Cross-border interconnection point within Europe or export point RUSSIA Transport by pipeline to non-EU country uder 24» Cross-border interconnection point with 24» to 36» third country (import) NORWAY 36» and over LNG Terminals’ entry point intro project transmission system LNG Export Terminal ALGERIA Gas Reserve areas Small scale LNG liquefaction gas field facilities drilling platform Third country cross-border LIBYA interconnection point KOST BONDARENKO, one ebates around In the early 80s, there border, (at the time of the efficiency, was a significant increase operation of two reactors, Gas storage facilities Cross-Border Europe of the leading political and most in electricity demand Ignalina NPP produced Acquifer Under construction or Planned UGS scientists in Eastern importantly - in the Baltic region, approximately 70% of Salt cavity - cavern Cross-Border third country import/ the safety of the which actualized the electricity consumed in Depleted (Gas field) on export Under construction or Planned Europe, historian and Dproject on a new nuclear concerns of construction Lithuania) and a large shore/offshore LNG LNG Import terminal publicist, prepared a power plant construction of a new nuclear power margin of operational Other type Under construction or Planned paper on interconnection in Belarus, better known plant. Despite the high life (according to Unknown LNG Export terminal as “BelNPP”, started in productivity outputs technical specifications Gas storage projects Under construction or Planned of energy and politics the late 70s, when the two power units of – until 2032), could not multiple storage facilities Small scale LNG liquefaction facilities based on the «BelNPP» idea of a new nuclear Ignalina Nuclear Power cope with the rapidly operated by different SSOs Under construction or Planned power plant construction Plant, located on the growing consumer project exclusively for was submitted for public territory of Lithuania, demand. At the same EP # 2, 2019 discussion. near the Belarusian time, construction of

18 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 19 |ELECTRICITY MARKETS| |ELECTRICITY MARKETS| Reactor building NPP Reactor building protection The reactor building is the main building of the nuclear power plant, around which other buildings and structures of the nuclear island are grouped. The nuclear steam generating against external impacts Minsk thermal power plant Union. “Eastern Europe Studies following which Belarus preliminary data, the loss political decision of Russian was started near Minsk, the In 2006, the Belarusian Center” (EESC) conducted receives a significant part of constitutes approximately leadership. Thus, only in plant and its emergency cooldown systems are located in the reactor building. Containment prospects and effectiveness authorities officially A Structure a survey, commissioned by state budget revenues. USD 400 million in 2019 October 2018, Belarus The double containment minimizes effects that may be caused by potentialof which became radioactive the main announced the launch the Lithuanian Ministry of According to some forecasts, (0.7% of annual GDP), and received compensation arguments in refusing to of a nuclear power plant B Conrol Rods Defense, according to which in 2019-2024 Russia will given the fall in profitability for re-exported oil in the releases into the environment. The outer containment provides physical protectionconstruct a new nuclear for theconstruction project. C Reactor most Lithuanians consider continue the introduction of of oil refining at refineries amount of USD 263 million. power plant in favor of Belarus to be a friendly the so-called second stage of over the next five years, The payment was delayed D Strem Generator inner containment in any external event. The inner containment maintains air-tightnessdeveloping these capacities. of the country and do not see a “customs maneuver”, under Belarus will be USD 10-11 for various reasons since July The construction of a new E Strem Line threat in its foreign policy. which the oil export duty billion underfunded, which 2018. As of today, Russia has nuclear power plant was Although 53% consider is reduced from 30% to 0% equals to 4% of annual GDP not applied leverage against internal volume under all operating conditions including emergencies. F Pump discussed in earnest only “BelaNPP” to be a source of with a proportional increase as of 2024. Belarus. According to The inner containment is a pre-stressed reinforced concrete structure,at the consisting beginning of the of a G Generator danger for Lithuania. of the oil extraction tax. In In early January 2019, it was preliminary data, the price early years of 2000, namely At the end of 2018, Russia Aircraftthis case, it iscrash. planned to reported about Belarusian of Russian gas for Belarus H Turbine cylindrical part and a dome. The inner surface of the containment is lined withafter 2001, six the millimeter Lithuanian enhanced its political Theintroduce possibility compensation of aircraftoil refineries crash purchasing in 2019 remains at USD authorities, at the request of Cooling Water dialogue with Alexander payments to Russian oil Russian oil without 127 per 1000 cubic meters, I Condenser carbon steel to ensure tightness. the EU, approved a program Lukashenko in order to isrefineries taken to into support account their providing in the compensationNPP but for the population the for sustention and further J Cooling Tower achieve full integration of design.competitive positions. As a for the Russian “customs regulated price increased The internal diameter of the pre-stressed containment is 44.0m. decommissioningThe thickness of the first is the country into the Union result, Belarus in 2019 faces maneuver” to the from January 1, 2019 to K Fuel Rods unit of Ignalina Nuclear State. For this purpose, the threat of a significant Belarusian state budget. USD 213 (2018 - USD 198 determined by calculation and according to the calculation data is 1200mmPower for Plant.the This cylindrical was one L Transformers dependence on the supply reduction in state budget Their payments are not per 1000 cubic meters). of the prerequisites for the of Russian oil for Belarusian revenues, which were formed regulated by the provisions In order to minimize part and 1000mm for the dome. The upper elevation of the cylindrical part accessionis +44.600. of the Republic of refineries at Russian by refining Russian oil and of the intergovernmental financial losses from Lithuania to the European Nuclear Power Plant Snow and ice loads.domestic prices without exporting tax-imposed oil agreement of 2017 and a possible increase in The proposed containment design ensures higher reliability than Fourthose possible developed sites were Peak (extreme) snow loadexport duty accepted is actively used, products. According to in fact depend on the prices for natural gas and identified for the start of Seismic loads. earlier and is a step forward in the direction of enhancing safety of nuclear construction,power aplant. search of 15-20 years. clear that Russia does not between Moscowin the and Minsk design makes 4.1 kPa. investments and signing The Belarusian side began intend to involve other in 2011, Russia continued NPP is designedHurricanes, taking into whirlwinds, Adjacent to the reactor building is the transportation lock trestle ofwhich partnership is agreements used negotiationsto with China and participants in the project. construction of a nuclear Aircraft crash. considerationtornado. Safety- earthquakes with for the construction of the United States regarding The negotiation process power plant in Kaliningrad The possibility of related aircraft crash transport large size equipment into the reactor building. the object was launched. provision of additional between Minsk and Moscow region. Likewise, a joint maximumcomponents horizontal are acceleration is taken into account designed taking In 2008, the decision of investments. Apparently, dragged on for several years project of Lithuania and in the NPP design. construction of Belarus NPP such a step was taken to and took place directly at Poland for the construction atinto accountthe windground load at a wind level of 0.25 g. speed of 30m/s at a height of 10m. on the site of Ostrovets, raise the bid in the auction the level of the first persons of the Visaginas Nuclear At further stages of the design, these located 18 kilometers from with the Russian side, of the states. In 2011, during Power Plant (at present, values may be subject to change the border with Lithuania which still doubted the his visit to Minsk, Vladimir both projects are frozen) depending on specific site conditions. The governing wind load is whirling effectiveness and payback of Putin met with the President was negotiated forcefully. Steam cell and 50 kilometers from effect. Loads accepted in the design Vilnius (the capital of the transaction. of Belarus Alexander However, in October 2011, are loads caused by a whirl of class Lithuania) was made. A However, Moscow’s Lukashenko, where the “BelNPP” construction Snow and ice 3.60 as per Fujita scale. The steam cell is designed to contain equipment and pipelines that are part of the system loads. similar decision was driven reaction to the actions of agreements on cooperation process was launched. Peak (extreme) providing SG protection against overpressure, cutoff valves of the primary bycircuit, the world public feed opinion water the Belarusian government in the construction of Along with the start of snow load as a political move on behalf turned out to be quite nuclear power plants were construction, protests among accepted in the design system and demineralized water supply system. Equipment and pipelines of Belarus all andsystems Russia. The areprincipled. Russia’s signed and guarantees of many public organizations makes 4.1 kPa. initial cost of implementing ambassador to Belarus, lending from the Russian and leaders of some divided into four independent safety trains. this project was estimated Alexander Surikov (2007- side were given. European states intensified. at USD 9 billion, USD 2018), announced the Many experts noted that The Lithuanian side alleged 6 billion of which was following position: “I such a project is not cost- the increased risks both to External explosions. planned to be spent on the exclude the participation effective for the Russian the local population and the Seismic loads. NPP is designed Safety-related NPP construction of the NPP of the US in construction side. Such conclusions were entire Baltic region. Protests taking into components Safety building itself and another USD 3 of the nuclear power made not only on the basis against the construction consideration are designed taking into account billion - on the construction plant for political reasons. of the high risk of non- of the nuclearHurricanes, power plant whirlwinds, earthquakes with The safety building is designed to contain maximum horizontal the shock wave of related infrastructure, If China takes part in return of credit funds by became regular. Similar acceleration caused by external including a residential financing of construction Belarus, but also because protests weretornado. common Safety-related at the ground level of explosion. Pressure in the shock wave the equipment and pipelines of the protective 0.25 g. front is accepted to be of 30 kPa, campus for NPP workers, of a nuclear power plant, I of possible competition in inside Belarus.components are designed taking collapse stage duration is 1 s. connection of rail sidings, have doubts that Russia will the export of electricity in At the beginning of safety systems. The building ispower divided lines and other. into The fourparticipate in the project the region. At the time of 2019, a Lithuanianinto account non- wind load at a wind independent and isolated safetyestimated trains. payback The period issafety implementation”. It became signing of the agreement governmentalspeed organization of 30m/s at a heightNPP Reactor of building 10m. protection against external impacts | Source: atomenergoprom.ru trains are isolated from each other by building At further stages of the design, structures. The safety building20 alsoCORPORATE contains MAGAZINE Cepconsult the s.r.o. these values may be subject to EP #2, DecemderExternal 2019-February 2020explosions.21 change depending on specific equipment of intermediate cooling circuit and Safety-related NPP components site conditions. The governing are designed taking into account process water system for important consumers, wind load is whirling effect. Loads the shock wave caused by external fuel pool cooling system, residual heat removal accepted in the design are loads explosion. Pressure in the shock system. caused by a whirl of class 3.60 as wave front is accepted to be of 30 per Fujita scale. kPa, collapse stage duration is 1 s.

8 9 |ELECTRICITY MARKETS| |ELECTRICITY MARKETS|

petroleum products, the President of of “BelNPP” and the appearance of on its own capacities and allows only electricity exports to the Baltic States by disposal on Belarusian soil. stated their desire to increase energy Belarus ordered to intensify work on an additional 1200 MW of electricity minor cross-border flows with Russia at a level of approximately 1 billion kWh It should also be noted that according exports. At the same time, the process the electrification of industries and the production capacity. and Ukraine within the framework of during 2019, which are sold through the to Viktor Karankevich, the Minister of of integration of the Baltic States and residential sector. This is related to the For this year, Belarus does not plan to technical needs for balancing. At the Nord Pool exchange trading platform. Energy of Belarus, the commissioning Ukraine into the system of European expected commissioning (2019-2020) import electricity in advance, relying same time, Belarus is also relying on In general, the NPP project provides for of the nuclear power plant will allow energy operators significantly the construction of 2 power units with replacing up to 5 billion cubic meters of complicates such plans, forcing Belarus a total capacity of up to 2,400 MW (2 natural gas and, accordingly, will reduce to look for other ways to solve this power units of 1,200 MW each). The the share of its use in energy production problem. In this regard, at the moment, Value of parameter project “AES-2006” atomenergoprom. from 95% to 60%. In addition, the negotiations between the national Characteristics, units of measurement ru/u/file/npp_2006_eng.pdf with ministry announced its intention to energy companies “Belenergo” and (characteristic) pressurized water reactors (PWRs) continue work on the diversification of “Ukrenergo” are being conducted on the of the third generation was chosen for types of fuel and suppliers of fuel and submission of a joint application to the General parameters of power unit the Belarus NPP. This generation of energy resources, including by means European Energy Community (Vienna, reactors is characterized by increased of constructing of renewable energy Austria) for the construction of a direct Rated thermal power of reactor, MW 3200 safety and reliability, namely the system sources. current supply. It is anticipated that With the commissioning of a nuclear such additional infrastructure will Rated electric power, MW 1198,8 of passive heat removal; the system of water disposal and cleaning from the power plant, the energy sector of include two lines with the capacity of Effective hours of rated power use, hour/year 8065 shell; double protective hermetic shell Belarus will face the problem of an 500 MW each, which will allow the and fuel melt trap in case of accidents electric power surplus. The government export of surplus electricity to Ukraine NPP lifetime, years 50 beyond the design base. and policymakers have repeatedly and other European countries. The Baltic NPP, Novovoronezh NPP- Seismic stability: 2 and Leningrad NPP-2 were built according to the same project in the Safe shutdown earthquake (SSE), g 0,25 Russian Federation. A similar station is already in operation in China – the Operation basis earthquake (OBE), g 0,12 first stage of the Tianwan Nuclear Power Plant, which is recognized by Number of fuel assemblies in core, pcs. 163 the IAEA experts as one of the best in the world in safety parameters. The Time during which fuel is in core, years 4–5 service life of the power unit used at Basic parameters of the primary circuit nuclear power plants is about 50 years. Undoubtedly, in the construction Number of loops of the primary circuit, pcs. 4 of nuclear generating facilities, one of the main issues is the problem of Coolant flow through the reactor, m3/h 85600±2900 waste disposal. Belarus is considering three options for solving this problem. Coolant temperature at reactor inlet/outlet, 298,6/329,7 The first option is the shipment of spent nuclear fuel of “BelNPP” for Nominal steady-state pressure at core outlet (abs.), MPa 16,2 reprocessing to Russia, taking into account long-term storage in the Basic parameters of the secondary circuit territory of the Russian Federation and the subsequent return of high- Turbine: level waste and its disposal in Belarus. The second is shipment for processing, Rotation frequency, 1/s 50 taking into account long-term “dry” Design scheme 2LPC+HPC±2LPC storage and further disposal in Belarus. The third is long-term storage followed Source: belaes.by. Nominal steam pressure at turbine inlet, MPa 6,8 Feedwater temperature under nominal conditions, °C 225±5 The Baltic countries and Poland are conducting an information campaign against Belarus, Generator: trying to prevent Belarusian electricity from entering the EU markets. In this connection, Rated voltage, kV 24 relations with Belarus are becoming a politically sensitive issue not only for the EU countries, but also for Ukraine and Moldova. Table 1. Basic technical characteristics and parameters of the power unit | Source: atomenergoprom.ru

22 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 23 |THE MAIN TOPIC| |THE MAIN TOPIC|

consumption and even sets the prevalence states that support different forms a package of “clean mobility” and the of generation over consumption. At of generation is not possible, not to achievement of carbon neutrality are the same time, Germany is lobbying for mention the impact on the environment among them. While the latter is the the expansion of imports of natural gas, and climate. first stage of a long-term project up to hoping to use it as a reserve source for Arguments about the high costs of 2050, changes in the approaches to the volatile RES. full-scale energy transformation, the transport sector are medium-term goals Research institutions, small and introduction of a new market model and will be further elaborated through medium-sized businesses in Germany based on volatile RES, a shift in priority relevant directives and regulations in are actively testing new energy from large energy objects to distributed the near future after the parliamentary management systems at the level of generation, an increase in the value of elections and the formation of a new individual territorial communities. The low-voltage distribution networks, an European Commission. combination of different forms of RES increase in the importance of cross- At present, the United States and together with energy efficient measures border interactions, the expansion China are in the process of developing and flexible demand management of competition and the reduction of the global trend, with the rapid growth create unprecedented opportunities for administrative influence on energy are of electric transport and charging interaction between small producers of rather reasonable. infrastructure. By market volumes they electricity and consumers. A complex The moment of truth for the EU was have significantly outstripped the EU market of relationships is being a debate about a new directive on the and offer two different auspicious ways formed, where smart modern systems electricity market, which, despite the — centralized government policy with of accounting allow you to do dozens considerable efforts of the European financing in accordance with clear of operations in 24 hours and flexibly Commission and the European plans and taking into account related The next five years respond to price signals by reducing or Parliament, was not finalized, in industries (Chinese way) or business increasing consumption. particular, due to the resistance of initiatives driven by the market and can become extremely The role of electricity distribution Poland. Hungary opposed further consumer preferences (American dynamic for the THE DIGITAL system operators is growing sharply measures aimed at strengthening the way). For many states in Europe, some European energy as the appearance and growth of the role of pan-European institutions in combination of these approaches will number of prosumers puts them in regulating national energy development be optimal, where the state undertakes market. The current front of the need to ensure a two-way plans. Collectively this position of facilitation of the conditions for the composition of the ERA OF ENERGY process of electricity distribution — individual EU member states threatens formation of the electric transport from the network to the consumer the so-called “Clean Energy for All market, and business invests in the European Commission and from the prosumer to the general Europeans” legislative package, which projects and services necessary for its seeks to implement AS AN OPPORTUNITY network. Individual companies began was one of the main points of the program effective functioning. the “Clean Energy to introduce special projects for the of the current European Commission At the same time, in Germany it was AND A CHALLENGE establishment of demand management and the vice president Maros Sefcovic, calculated that distributed generation for All Europeans” centers. At the same time, major who is of Slovak nationality and the (domestic solar power plants) in program, which will electricity suppliers with traditional avid admirer of the Energy Union, conjunction with energy saving systems longside with this, technologies According to preliminary estimates, generation facilities are changing their which was considered as a format for and energy storage systems can become launch powerful allowing the creation of “smart over the next 20 years, the cost of “coal business model of operation and expand the integration of energy policies of all a cost-effective basis for expanding the mechanisms of cities” that can form autonomous transformation” in Germany will amount the range of services provided in the member states. There are less than two fleet of electric vehicles while saving decarbonization, push systems due to low energy to EUR 40 billion. Representatives of energy management sector, in particular months remaining before the European enormous public and private funds for consumption, the integration environmental organizations are talking at the municipal level. Parliament elections, which reduces the the reconstruction of transmission lines, the unprecedented Aof Renewable Energy Sources (RES) a about significantly larger costs, although The EU faces a complex choice between chances of implementing the legislative especially in the segment of low-voltage changes in the flexible demand management system; even these are impressive. At the same conservative energy, which is supported package fully or otherwise causes switchgear networks and transformer and even local self-organization of time, Germany thoroughly approached by the majority of new members of excessive compromises for such states substations. Siemens in Germany is testing principles of prosumers and consumers using the the assessment of the timing of the coal the community and the third energy as Poland, in particular, the possible the use of cheaper and more affordable functioning of the blockchain technology are being actively mining termination along with the revolution, the key element of which exclusions from the rules of support for energy saving systems and energy storage energy market developed. simultaneous economic reconstruction is digital technology. This choice has coal generation by the state. systems on the basis of sodium and sulfur Germany, having announced rejection of the regions and the social-professional already divided the EU into two camps, Meanwhile, plans for new ambitious on an industrial scale, and is actively from centralized to from coal generation by 2038 in late adaptation of the coal industry workers. between which the conflict intensifies, goals of the EU for the next election experimenting with other accumulative distributed generation, January 2019, remains the most active In place of fossil fuels, a combination since a single energy market between period have already been announced: technologies, in particular, hydrogen. and cause the driver of change. This reveals the of RES and energy efficiency measures willingness to completely shut down coal- should come; Germany intends to All this means that there is a new era of energy that will certainly require time and money to implement at the emergence of a new fired power plants and coal production significantly renovate the residential national level, but can positively affect the environment and climate, provide a balanced development of the active and mass player while ensuring balancing of demand sector and has imposed strict energy sector and create the preconditions for employment. Active cooperation between states can make this for electricity and sufficient quantities requirements for the standards of energy process faster and cheaper, while conservatism and protectionism can slow it down, rather than stop it. — the prosumer. of generation or supply of energy. consumption of new homes to zero

24 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 25 |NEW DEVELOPMENTS| |NEW DEVELOPMENTS|

new paradigm of the future Europe. EU energy system is to use Consequently, due to excessive electricity from increased competition in the THE NEW HYBRID the sun and wind to generate gas market, liberalization and hydrogen gas, followed by its reformation of the EU energy transportation through the market, gas prices in the EU gas transmission system and have significantly decreased ENERGY SYSTEM accumulation in the EU UGS in recent years, seasonal infrastructure. K. Borchardt fluctuations in gas prices noted that at present, this have become minimal. This OF THE EUROPEAN UNION technology shows only the situation has become a serious first success, but already challenge for the further According to the results of one of the most important European there is a significant potential existence of the infrastructure for the integration of all of underground storage gas conferences – “Flame 2019”, held on May 13, 2019 in Amsterdam, systems (transportation, facilities in the EU, which, the Netherlands, the new paradigm of the future EU energy system storage of gas, generation in the absence of investment of renewable energy) into a and market attractiveness, could be the use of excess electricity generated from the sun and single integrated system. In has already decreased by 4%. wind to produce hydrogen gas with its further transportation via gas the framework of the creation Such a trend (the further transportation system and accumulation in the European system of of such a hybrid system, reduction of the UGS system according to K. Borchardt, by 10% and more) jeopardizes underground gas storage facilities. further development of the EU energy security in the the architecture of the EU future, especially in the peak energy systems and its energy season of gas demand in the bout 650 storage infrastructure in the to reduce gas prices has led price of gas in the winter and able to guarantee the security has adopted a long-term security will be determined. EU. representatives of EU remains the aspect of to a loss-making effect of the summer was about EUR 10 — of gas supplies in the winter. strategy for the development A significant advantage of the European gas and energy security of consumer conservation of this energy 12. At present, the seasonal According to I. Conti, the of the EU energy and development of the hybrid The new paradigm of the power generating markets, namely providing in European underground difference in gas prices, at European Commission does environmental policies. power system in the EU is future EU energy system companies, traders users with sufficient gas storage infrastructure. the “TTF” gas hub in the not have an effective policy The strategy foresees that that this approach does not can be the use of excess Aand regulators of the energy quantities of gas in cases At the same time, significant Netherlands, does not exceed on the development of the after 2050 the role of gas as involve the construction of electricity generated from market, representatives of where gas supply contracts progress in the development EUR 2. At the same time, the UGS infrastructure in the fossil fuel in the EU energy new power lines, and may the sun and wind for the the European Commission, are breached or technological of gas transmission networks gas storage tariff for the whole EU, its adaptation to the balance will be significantly be based solely on existing generation of hydrogen and others took part accidents occur that result in the EU provided an period remained unchanged European infrastructure. gas with its subsequent in the event. The main in stopping the flow of gas to opportunity for the rapid at the level of EUR 5 — 6 per During 2017 in the UK, a significant part of the UGS Mr. Klaus-Dieter Borchardt transportation through topics of the conference the EU. J. Stern emphasized pumping and supply of gas MWh (megawatt hour). infrastructure was decommissioned due to the noted that in the short term, the gas transmission weredecarbonization of the that due to technological to those regions of the EU The equipment of gas economic infeasibility of further use. A significant in order to accelerate the system and accumulation European energy system, changes in recent years, a new where there is a shortage storage in the EU is cooling in February 2018 led to a shortage of gas in the implementation of the new in the European system of integration of the European function to the gas storage of blue fuel. According to becoming obsolete, and the country, the demand for gas in the EU also reached (hybrid) model in the energy underground gas storage. gas infrastructure, electricity infrastructure of the EU has I. Conti, the liberalization modernization of existing its historic peak. In Great Britain, all available coal system in the EU, pilot Based on the requirements generation and gas storage been added — integration of of the EU gas market and gas storage facilities does reserves were used. An emergency was prevented by projects with a capacity of 5 of the “Paris Climate infrastructure. gas and electricity networks the development of the gas not seem attractive to invest urgent supplies of liquefied gas from Qatar and the — 10 MW will be developed. Agreements”, the European Jonathan Stern, a London- in the EU. Namely, to serve as transmission system have in. Consequently, according United States. According to the expert, the experience According to K. Borchardt, Commission plans to based Oxford Institute a bridge between generation led to a significant reduction to I.Konti, in the period of Great Britain clearly demonstrates the security the current model of operation significantly reduce the use for Energy Studies expert, of solar and wind energy, in gas prices in Europe. from 2016 to 2018, the total aspect of the UGS infrastructure for Europe. of the EU UGS system will of fossil (traditional) gas believes that the EU’s gas existing gas transmission According to her, the irony capacity of the UGS in the exist until 2030-2035, in the in Europe by 2050. To this storage infrastructure will networks and the EU is that, despite considerable EU decreased by 4% and this challenges and needs of the reduced. For the gas future it will be transformed end, a new strategy for the play a central role in the underground gas storage efforts and reformation of process is continuing. modern European energy transport networks and UGS into a hybrid system, where integration of the existing latest European hybrid infrastructure. the European gas market, According to the expert, the market. infrastructure in the EU, this the infrastructure of the European GTS network, energy system model that According to Ilaria Conti, the diversification of gas sources negative dynamics of the As Jan Ingwersen, the means a complete change of UGS will not only maintain the UGS infrastructure will combine regenerative head of gas programs at the supplies to the EU has not capacity of the UGS in the chairman of the “European the current traditional gas its main function — ensuring with the renewable energy generation, EU gas transport EU Energy Research Center taken place. On the contrary, EU has a direct negative Network of Transmission business model. uninterrupted gas supply in generation infrastructure networks and underground of the Florence School of the EU dependence on impact on the state of energy System Operators for Gas”, According to Klaus-Dieter winter, but will also provide is being developed, which gas storage infrastructure Regulation, the EU gas Russian gas has risen. security of the EU. In such a noted in November 2018, Borchardt, Deputy Director the EU with flexibility in can radically change the (UGS) in the EU. According storage capacity is about 1200 I. Conti draws attention way, with an additional 10% within the framework of the General, Directorate General the operation of regenerative principles and mechanisms of to G. Stern, at present, the TWh (terawatt per hour). to the fact that in the past reduction in the EU UGS Paris Climate Agreements, for Energy (DG ENER), generation systems and gas the functioning of the energy main traditional value of gas The tendency of recent years decade, the difference in the infrastructure, it will not be the European Commission European Commission, the transmission systems in security system in Europe.

26 CORPORATE MAGAZINE CEP EP #2, Decemder 2019-February 2020 27 |NEW DEVELOPMENTS| |NEW DEVELOPMENTS|

of “energy-consuming communities” on this basis. The expansion of innovative low carbon technologies in the EU can become MEDIUM-TERM widespread and cover all areas of life, including the introduction of energy efficient technologies and CO2 capture technologies in PRIORITIES the generation of electricity, heating, refrigeration, transport, production of iron and steel, cement and other construction materials, FOR THE TRANSFORMATION FOUR PRIORITIES UP TO 2024 TO FOSTER THE EU ENERGY TRANSITION | Source: bruegel.org production of paper, chemical industry and construction, and a significant reduction nisation in industrial and and possible volumes of etc. OF THE EU ENERGY SYSTEM As of now, the EU industry in the cost of their construction sectors. renewable generation in each implementation. The costs of industrial, administrative generates 25% of all CO2 transforming the EU energy Therefore, transport is now or residential area. Today, a emissions and is considered system are commensurate a significant impediment new model of decentralized the most energy efficient with its annual operating to the EU decarbonization electricity grids is being built sector of the EU economy costs. Therefore, the new of the economy, with road on the “smart grid” database, due to the introduction of a nalyzing the results has come close to the need to and industrial opportunities industry, contrary to the US, EU energy policy, which transport accounting for 70% where on each “distribution CO2 emission trading system of a study on deepen the transformation arising from the massive and investment opportunities will be introduced by 2024, of all transport emissions. platform” there is a local and modernization. “Energy transit of of the energy system, in transformation of EU energy common to China). will determine, first and Therefore, the current balancing of consumer the European Union: particular: systems; Thestudyleader, Simone foremost, the architecture of EU policy, without being demand, generation and Source: https://bruegel.org/ the key priorities the widespread development of new EC Tagliapietra, Senior Expert the future EU energy system updated, could lead to an capacity for electricity wp-content/uploads/2019/07/ Afor the next five years”, introduction of technologies approaches to enhancing at “Bruegel”, believes that in 2050. additional 15% increase storage and formation Bruegel_Policy_Brief-2019_01.pdf conducted by the European for decarbonization of the energy competitiveness EU energy transformation Georg Zachmann, expert in CO2 emissions from think tank “Bruegel”, which EU economy in accordance and enhancing EU energy is currently economically atGerman Institute for transport by 2050. The specializes in the formulation with the requirements of the security (given the fact and technologically feasible, Economic Research in main priority in this context In order to fulfill the requirements of the of EU development Paris Climate Agreement; that the EU does not have given the availability of all Berlin, “Bruegel” research should be the increase of use Paris Climate Agreement, in the medium term strategies and economic greater use of economic unconventional oil and gas the necessary technologies participant, believes that of electric vehicles in the EU, (by 2024), the European Commission and the policy, it is clear that the EU the updated European both in the public and private has been pursuing an active Parliament and the sectors. European Parliament should formulate and start climate policy for the last European Commission According to international implementing a new policy of transformation 10 years that has resulted should provide a basis for experts, EU electrical of EU energy systems, the main instruments of in the mass integration the transformation of the EU systems are now undergoing which may be: of renewable generation energy system. According a deep structural technologies into the EU to him, the priorities of such transformation. They are decentralization of energy systems (creation energy system. Obviously, transformation should be: becoming more flexible, of “distribution platforms” and “energy consumer the European Commission introduction of a decentralized and include communities”, which will balance the generation of (EC) willfurther continue to European decarbonisation elements of digital automatic heat, electricity, its storage and distribution); contribute to increase in the policy in the transport sector; control. The EU backbone large-scale introduction of digitalization (digital generation of green energy preparation of EU and distribution grids have automatic control of energy systems, development been completely reorganized and improvement of energy electricity grids for a of smart energy systems); efficiency in all sectors of the significant increase in and subdivided into “smart large-scale transition of all spheres of EU life to EU economy. renewable energy generation, grid” areas. This has allowed Figure 1: EU greenhouse gas emissions by sector, 1990-2016 low carbon technologies, the wider introduction of However, at present, the EU | Source: Bruegel based on European Environment Agency (2018). Note: 1990 = 100. without weakening EU distribution companies to energy security indicators; reduce the cost of delivering CO2 capture and storage systems; widespread introduction electricity to end users and introduction of an efficient transport CO2 From 1990 till 2016, EC efforts led to a reduction of CO2 emissions in all sectors of economy of low carbon technologies in to clearly set their energy reduction policy, large-scale use of electric and in the EUin general, and this indicator increased only in transport sector, by 20% (Figure 1). the EU; consumption figures and vehicles in both the public and private sectors. accelerating decarbo- clearly identify the potential

28 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 29 |NEW DEVELOPMENTS| |NEW DEVELOPMENTS| NEW PROJECT FOR INDUSTRIAL USE OF HYDROGEN IN THE EU

The European Commission has provided EUR 12 he consortium the internal gas network of 2020” budget. The total system operator APG will solutions. This will offset Due to the creation of a new will also work the enterprise, which will cost of the project is about support the integration of short-term generation pilot plant for the production million for the implementation of the H2FUTURE with research allow the use of hydrogen EUR 18 million and the the plant’s capacity into the fluctuations of electricity of zero-carbon steel in Linz, project, which envisages the experimental and organization at various stages of steel implementation period is 4.5 market of operational power network with a rapidly the consortium is taking a step partners K1- production. years. One of the largest and system reserves. K1-MET increasing share of volatile towards the implementation and industrial introduction of hydrogen TMET (R&D cutting-edge most advanced electrolysis will support the operation of RES by management of load of a long-term technological technologies by a consortium of European metallurgical technology The EU’s new climate plants, Proton-Exchange an innovative plant and the for large consumers. transformation. The companies within the Voestalpine metallurgical center Metallurgische and energy targets are Membrane (PEM), expansion of experience in company notes that the Kompetenzzentrum) and set to reduce carbon manufactured by Siemens, the application of hydrogen Voestalpine has provision of sufficient group and Siemens companies, VERBUND and ECN (Energy Research dioxide emissions by will be the technical basis of technologies in the European traditionally positioned energy from RES, as well 40% by 2030, posing Center of the Netherlands). production. and global metallurgical itself internationally as the political framework the transmission system operator Austrian significant challenges The agreement between The key partners of the sectors. as environmentally conditions that allow for for energy-intensive friendly and energy Power Grid (APG). The project is supposed to the European Commission project (Voestalpine, The potential and the long-term planning are the and energy producing efficient model in be implemented within the framework of a and the consortium enterprises. At the Siemens and VERBUND) possibility of using green energy industry. Over necessary prerequisites for envisages the construction same time, renewable have experience of successful hydrogen at different the past 10 years, this the success and upscaling of energy can be not decarbonization support strategy through the of one of the world’s largest cooperation for many stages of steel production industry group has these technologies. only the basis of the transition to alternative energy sources. electrolysis plants for the decades. It is envisaged is expected to be assessed spent more than EUR 2.2 Siemens, for its part, has new structure of the billion on environmental production of hydrogen that VERBUND, as project during the implementation developed an electrolysis European electricity activities at its plants in using electric power from sector, but also a source coordinator, will supply of the H2FUTURE project. Austria. The company is system based on the use of renewable energy sources. of energy for green electricity from RES and The possibility of applying seeking the complete PEM technology, which hydrogen production In the course of the project, provide network services. this technology to other replacement of coal provides efficient conversion as a universal source the partners plan to work at The R&D Center, ECN, industries that use hydrogen through the use of of electricity to hydrogen, for industrial needs and alternative energy the site of a new Voestalpine will also be the partner of in their production processes is being successfully used balancing of energy sources for steel company located in the systems. the project in charge of the will be explored as well. production over the next in several projects and village of Linz, Austria. scientific analysis of the Another objective of the two decades by using continues to be improved. The hydrogen complex Funding for the H2FUTURE demonstration industrial project is to integrate the “transitional” natural The PEM electrolyzer at will be used as a new part project is planned through hydrogen operations and PEM electrolysis plant into gas technologies. This the Linz Metallurgical Plant approach is already of the large Voestalpine the EU strategic initiative will ensure the application the markets of operational will have a capacity of 6 being implemented at a metallurgical plant. The — Fuel Cells and Hydrogen of experience learned reserves of electricity new electrolysis facility MWt and will embody the produced green hydrogen Joint Undertaking — FCH from other industries. The capacity and to develop in Texas in the US. next generation of Siemens will be supplied directly to JU under the “Horizon Austrian transmission demand management technology.

30 CORPORATE MAGAZINE Cepconsult s.r.o. EP #2, Decemder 2019-February 2020 31 ^ Strba Lake High Tatras Slovakia