Gas and its role in the energy transition

Aauthor: Thorsten Koch, Zuse Institute Berlin - Alexander Martin, Friedrich-Alexander University Erlangen-Nuremberg (As of February 2015) The energy transition and its success are currently the focus of public interest. It is of central importance socially and  politically because Germany, like many other industrialized nations, finds itself in a dramatically increasing dependence on a reliable, secure, efficient and affordable energy supply. At the same time, the demand for clean, environmentally and climate-friendly energy generation is greater than ever. To make this possible and in parallel to manage the phase-out of nuclear energy, gas plays a crucial role as an energy carrier in the coming decades as a transition technology.

Gas is available in sufficient quantities for the foreseeable future, can be easily transported and stored, and can be efficiently and cleanly converted into electricity. Nevertheless, the focus on efficient gas supply implies a variety of problems, both in terms of transport, grid technology and storage, as well as in terms of taking into account market regulatory conditions and coupling with other energy sources.

The gas grid represents an excellent way to provide access to sufficiently sized energy storage, which is indispensable for the energy transition. It is technically possible to convert energy into hydrogen or artificial methane and then feed this into the gas grid. In principle, this is also possible with bio-methane from renewable sources. The capacity of the existing natural gas storage facilities is around 200,000 GWh, which, when converted to electricity, is roughly equivalent to Germany's entire electricity consumption for 2 months. The energy consumption to operate the entire network is currently about 5,000 GWh per year. Through the use of electric compressors and the use of surplus energy to increase pressure in the network ("Power2Gas"), this could be covered from renewable sources.

Even the reorganization of the market that has taken place in recent years has presented many challenges to gas network operators. This process is still progressing continuously due to the politically unsettled situation, the inclusion of new technologies and the increasing requirements for flexibility while increasing efficiency.

The situation in the gas business

The conditions in the gas business have changed fundamentally in recent years. Until 2004, trading, transport and storage were in one hand, i.e., corporations such as EON/Ruhrgas or RWE owned the pipeline network and the storage facilities and concluded the contracts with the suppliers and customers. Germany was regionally divided among the groups. Planning was long-term, and control of the network and storage was integrated and linked to trading. The typical scenario was as follows: Long-term contracts were concluded with suppliers and customers. The gas was then transported in the group's own network from the suppliers to the customers. Storage facilities were used to increase security of supply. The overall situation was static and fully known, predictable, stable and controllable for the operator.

In 2005, Germany began the unbundling of the gas market with the Energy Industry Act (EnWG), which had been prepared in the EU since the 1990s:

Gas trading, transport and storage are now in the hands of independently operating companies. For gas trading, there is now a market with competing offers from different traders, which suppliers and providers can use. The transmission system operators are now only responsible for transporting the gas. They do not own gas themselves, they do not trade it, and they have no control over who wants to transport gas where and when. Similarly, storage facilities are now owned by independent storage operators who sell their services to traders and whose objectives are thus no longer primarily security of supply[1].

Gas transport is subject to regulation by the Federal Network Agency, as regional monopolies essentially exist here due to ownership of the pipelines. Gas trading today works as follows: Legislators have established what is known as a virtual trading point, which means that the physical gas network is irrelevant to traders. Traders can inject gas at any entry point and customers can withdraw gas at any exit point. In addition, traders can transfer the gas to other traders within the system at the so-called virtual trading point (make purchase or sales transactions). The traders are only required to ensure that the quantities of gas they inject and withdraw are identical. Where the injected gas quantity is transported to and where the gas comes from at the exit point is the sole responsibility of the gas network operator. The distance between the points has no influence on the cost of transport for the trader.

Facts about the gas network

• Gas transport, storage and trading  are carried out by independently operating companies. Overall, the gas network operators in Germany have no influence on the storage facilities.
• The network is currently controlled by 14 different gas network operators, there is no uniform approach.
• The control of the network is mostly manual by operators from control centers. Decisions on how the network is driven is based largely on the experience of the staff of the control centers.
• Problems in the network that can not be avoided by control, are solved with the help of control energy, load flow commitments and the interruption of capacity.
• The gas transmission system operators are subject to regulation by the Federal Network Agency.

Challenges and Tasks

In order to further improve the control of the gas network and to adapt it to the requirements of the energy transition, research is needed in all areas. Although the physics of a single pipe is well understood, knowledge of the behavior and dynamics in highly meshed networks is scarce. In order to achieve in the future an optimal use of the existing capacity reserves in the gas network and an increase in efficiency by reducing the drive energy demand, to be able to deal with  calorific value fluctuations by feeding in gases produced by means of renewable energy (hydrogen, methane), to achieve dynamic control of the network as an energy storage system, extensive research as described in the SFB/TransRegio 154 is taking place, and development is indispensable.

[1] The original expectation that storage would be filled in summer and emptied in winter because of low prices has not materialized. Gas prices behave less seasonally than anticipated, and as a result of this unanticipated development, storage facilities were not filled at the beginning of winter, which can then prove very problematic from a security of supply perspective.