In a wide-ranging interview, Jan Ingwersen, General Manager at ENTSOG, talks to Energy Post about the significance of TYNDPs, ENTSOG’s objectives and why perceptions have changed for the long-term role of gas.
As guardian of the gas grid, The European Network of Transmission System Operators for Gas (ENTSOG) has been entrusted with delivering secure and affordable gas supplies in and around Europe since 2009. Add to that a third pillar – climate sustainability – and you start to get a sense of the scale and complexity of their responsibilities. Ingwersen joined them in January 2014. Now, as General Manager, he is the link between their members, commercial project promoters, Brussels, national energy ministries, regulators, NGOs… the list goes on. How should our infrastructure develop to meet the needs of consumers, security of supply and climate at a time of revolutionary technological advancement? You’d be forgiven for wondering where on Earth to start but after an hour in the company of this calm, considered Dane you can’t help feeling re-assured. It felt like “we’re ENTSOG…we got this”.
TYNDPs, NECPs and PCIs – how does it work?
Part of ENTSOG’s remit is to curate all the incoming project proposals for inclusion in Ten Year Network Development Plans (TYNDPs) which, after going through various modelling and consultation stages, form the blueprint for infrastructure planning for Europe’s energy networks (TYNDPs are now developed in conjunction with the electricity equivalent ENTSO-E). They carry a lot of weight.
The projects which are submitted by their promoters to TYNDP allow ENTSOG to assess the development of European gas infrastructure, and specific assessments are undertaken on the projects which have applied for Project of Common Interest (PCI) status, building on methodologies agreed with European Commission and ACER (Agency for the Cooperation of Energy Regulators). PCIs, which receive public support, are chosen by the European Commission from the list which is why project promoters (mainly TSOs) apply for inclusion. “It’s a mixture of bottom-up and (a bit of) central planning” explains Ingwersen. “In the end, the realisation of new infrastructure is down to the project promoters because it is they who decide to invest or not, but receiving PCI status makes a big difference if you’re trying to raise finance”.
To qualify as a PCI a new project has to meet the current criteria. “Is the project what the network needs in terms of delivering security of supply, helping improve competition in the market to optimise affordability and does it help in reducing emissions?” ENTSOG’s testing methodology sees how various infrastructure developments work together in different scenarios. The main scenario is informed by National Energy and Climate Plans (NECPs) so the latest TYNDP, for 2020, is still at fairly early stages while those plans are still under discussion.
The 2020 TYNDP scenarios, co-developed with ENTSO-E, “will probably feature three different scenarios all common for gas and electricity”. The first “will reflect the NECPs, the energy policies of European governments, aggregated on a European scale”. The other scenarios “will consider other possibilities; maybe more green energy imports or more local production”. The scenarios are not projections. Ingwersen describes it as a process where they try to answer the question “if this happens, will the system stand up?”. The overriding purpose of the TYNDP is “to set up possible futures and test whether the infrastructure is robust enough to handle those possible futures – and to point out if not. If not, then where is the need for more, or different, infrastructure? And is it gas or electricity?”
“we have to connect the evaluation and analysis of the needs of both sectors”
“Sector coupling, looking at the system as one Hybrid Energy System (HES) instead of putting gas and electricity in silos, means we have to connect the evaluation and analysis of the needs of both sectors. This is how technologies like Power to Gas can come into the mix. “If we identify that a region has a surplus of electricity and getting that out would require hundreds of kilometres of cabling, we would first take a look at local gas infrastructure. Is turning the power into hydrogen and introducing it into the existing system as a blend, or pure, a better option? Or perhaps we store the hydrogen depending on timing”.
“Sector coupling adds a new dimension to the TYNDPs. It means that now we respond to project promoters based on the whole energy system to assess whether their plans are beneficial or not,” and in some cases “we are faced with competitive, either/or decisions. That’s for the Commission, we provide the overview”. According to Ingwersen, the 2020 TYNDP will go further in the joint ENTSOs scenarios by looking at the whole energy system to address this.
“Another difference this time around is that this plan is actively looking for decarbonisation projects since the ENTSOG TYNDP acceptance criteria have changed to accommodate “Energy Transition Projects”. The 2018 plan includes more traditional gas infrastructure projects by comparison. This means that ENTSOG has had to adapt the standardised framework so that projects with very different natures can be compared from a cost/benefit perspective. That framework will identify, for example, whether a project is of positive, cross-border importance which nudges it up the rankings by the European Commission”. Ingwersen points out that “anything which affects climate could be considered as cross-border”.
The three pillars
There are three pillars or goals for the EU and ENTSOG; security of supply, market improvement and, newest of all, climate.
Ingwersen explains: “Security of supply and affordability (i.e. a well-functioning market) have been our goals since the outset and if you want to measure our success then look at the consistency of pricing. 80% of Europe can now rely on prices within €1/MWh (+/-) of the TTF according to the most recent ACER market monitor reports. This could be even better but complicated supply, transport and connection issues in, for example, the East, South East and Iberian Peninsula still need a lot of work. Even so, I think we can argue with some confidence that the project’s been a success in this regard.
“But the third pillar is new. Climate has not been a part of the process in earlier TYNDPs. We’re now trying to get that third pillar to be more visible; for it to play its role in the evaluation of infrastructure.”
Can gas play a bigger role?
“The work of ENTSOG, such as the development of TYNDPs, is a regulatory requirement. It’s not about predicting the future or promoting gas – it’s about making an analysis. When we put together the TYNDP we know it’s fundamental to PCIs and therefore public money. That means you have to have a bigger goal than just a commercial goal.”
McKinsey’s 2018 study for Eurelectric talks about up to 60% electrification which, as you’d expect, has not been missed by Ingwersen: “I think the signals from the power sector have changed.” says Ingwersen when asked about how the role of gas is perceived in the context of the transition. “Even two years ago you would hear quite strong voices for full electrification. Now you hear some, even Eurelectric’s McKinsey study, saying that maybe they can go as high as 60%… but maybe only as much as 40%. This means two to three times as much power generation with all the extra coming ideally from renewables. It still leaves 40-50% of our energy to come from somewhere else – and you still have flexibility and seasonal storage to consider.
“Gas can handle these seasonal storage and peak demand issues. These are the synergies that exist between renewables and gas fired power. This is not a battle in that sense, this is about gas and electricity working together.”
What can you say to re-assure the public that this is not a threat to climate?
“Collectively, our priority is to find more efficient ways to supply energy – and, more and more, decarbonised energy – to Europe. From a gas perspective that means getting all the TSOs behind our 2050 roadmap to decarbonisation. We don’t produce what flows through the pipes – we know we’re talking about natural gas, biogas and hydrogen – but we can prepare the grids for receiving decarbonised gases.
“the gas sector is being listened too…which is a good thing”
“There are three different decarbonisation pathways which can, perhaps, run in parallel in different parts of Europe. The lower carbon gas in each case being:
- Methane – with reduced carbon footprint e.g. via biomethane, CCS, SMR etc.
- Methane/hydrogen blend or
- Pure hydrogen
“In this way we can meet the overall demand for energy alongside renewables without breaking the carbon budget.
“Eventually, there will probably be no fossil gas running through the system but it’s a transition. For instance, in areas in Eastern Europe, where coal/lignite is the dominant fuel to produce electricity, switching to gas can be a pragmatic step on the way to achieve significant emissions reductions. So, gas infrastructure may in some regions still receive PCI status where there are market connection factors and climate/transition benefits. The priority is getting a reduction in CO2.
For all these reasons; the different signals from the power sector, synergies between sectors and the possibilities for green and renewable gas, Ingwersen senses that “the gas sector is being listened too…which is a good thing”.
At one point, we discuss that certain tasks, like propelling long-haul transport, are just not that easy to electrify and how “gas can offer a far cleaner option than petrol or diesel”. This brings him onto the topic of his favourite city in the world, and his home, Copenhagen. “Yesterday the Danish government announced, that they will achieve 70% CO2 reduction by 2030. But when I’m sitting in Copenhagen looking at neighbouring Malmö… they’re streets ahead in terms of clean transport. Buses, trucks and taxis running on gas/biogas and batteries. In Copenhagen, we have buses and water buses still on diesel instead of gas, cruise liners on diesel in the harbour rather than switching to electricity. I’d like to see Copenhagen picking these low hanging fruits!”. Well, if you ever grow tired of decarbonising Europe…I’m sure they’d appreciate a hand.