03–2013
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PAGFE2014
EDITORIAL
EU internal energy market –
Challenge or illusion?
Implementation of the internal energy market by 2014 – the EU
likes to set itself targets. On the one hand, these are a good
incentive to make progress. On the other hand, they bear the
risk of hasty or incomplete action or of still being pursued even
though practice and experience point to revision.
Some Member States are lagging behind in the implementation of the Third Package on the internal electricity and gas
markets, but large progress has nevertheless been made both
in the transposition and the application of the laws.
ACER, ENTSOG, the European Commission and the market
participants have worked hard on the development of rules
and network codes for cross-border gas transport. Not all but
many of them will be adopted by 2014. Then they will be put to
the test provided that Member States have duly implemented
them.
Hub trading has greatly increased. The Commission reported
on the first quarter of 2013 that in the UK, the Netherlands,
Belgium, Germany, France, Austria and Italy 80% of the gas
consumed in these countries was delivered via hubs. On the
second quarter, the Commission reported an increase in hubtraded volumes in Poland and the beginning of hub activities
in Hungary.
The retail market has seen a considerable rise in the number of
suppliers, thus increasing the choice also for households. In
some countries, the choice has become so wide that despite
the availability of comparison tools (which are not always
reliable) it is difficult to make a decision.
So, what’s the problem?
Firstly, the implementation of the Third Package in all Member
States remains a challenge. The Commission helps and pushes
with infringement procedures being the last resort. Additional
rules and network codes need to prove practicable and efficient. They may require adaptation.
Secondly, there are a number of counterproductive developments that hamper the market. For example, price regulation
limits the fluctuation of prices and the natural mechanism of
supply and demand. The wish for price stability often ignores
the fact that a variable price can finally be a lower price.
Subsidies are another counter-mechanism that can distort
competition and prevent the market from developing the
most cost-efficient solutions.
ce regulation and subsidies, in particular for renewable
Both price
ources, have contributed to gas-fired power stations
energy sources,
ecome uneconomic
having become
in many countries. During
iods or when
peak periods
the wind is not blowing or the
he sun not
shining, they can
be switched
tched on
Beate Raabe
Secretary General
of Eurogas
EDITORIAL
flexibly. That is their selling point, but the dilemma in the face of
distorted wholesale prices is clear. This is why in some countries
the creation of capacity remuneration mechanisms are
considered, i.e. the creation of incentives to keep otherwise uneconomic power generation capacity available for times of need.
If market distortions cannot be removed or not quickly enough,
capacity remuneration mechanisms can be an effective solution,
but they should not themselves distort the market.
The Commission has expressed strong concern and has recommended giving preference to demand-side response measures
(electricity customers agree that certain appliances are
switched off at certain times) and better interconnection of the
Member States before resorting to capacity remuneration
mechanisms. However, the question is whether the first two
solutions are always the most cost-efficient solutions and
whether all three options should not be considered at the
same time.
As regards climate protection, there have also been some counter-productive developments in recent years. The emissions
trading system should have ensured that low-carbon energy
has a cost advantage over high-carbon energy. However, due to
the economic crisis and a lack of optimisation between different
climate policies there is a surplus of allowances the price of
which is currently around EUR 5 per tonne. This price is not a
great incentive to invest in energy efficiency or low-carbon
technologies. Moreover, large quantities of coal have become
available in the United States who has been switching its power
generation from coal to home-produced shale gas. These large
amounts of coal are sold cheaply on the European market,
which has led to the paradoxical situation that both the market
share of renewable energy sources and coal have been rising in
the EU and that of gas has gone down. Whilst carbon dioxide
emissions dropped sharply in the U.S., they are rising again in
some EU Member States, for example in Germany.
All this highlights the efforts required to ensure that a wellfunctioning, low-carbon EU energy market is not an illusion, and
to avoid that part of what has already been achieved is even
lost. It is important that Member States recognise the need to
adapt current policies and replace national regulation and subsidies with more competition and more Europe. This should be
done as soon as possible because investors urgently need a
clear and common political signal where EU policy is heading.
Beate Raabe
Secretary General of Eurogas
The Gas Engineer’s
Dictionary
DIV Deutscher Industrieverlag GmbH, Arnulfstr. 124, 80636 München
Supply Infrastructure from A to Z
The Gas Engineer’s Dictionary will be a standard work for all aspects of
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This dictionary is an entirely new designed reference book for both engineers
with professional experience and students of supply engineering. The opus
contains the world of supply infrastructure in a series of detailed professional
articles dealing with main points like the following:
• biogas
• corrosion protection
• grid layout
• metering
• storages
• compressor stations
• dispatching
• LNG
• pressure regulation
• conditioning
• gas properties
• odorization
• safety devices
Editors: K. Homann, R. Reimert, B. Klocke
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hardcover, ISBN: 978-3-8356-3214-1
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PATGED2013
TABLE OF CONTENTS
6
3 – 2013
10
HOT SHOT
TRADE & INDUSTRY
Inspection of the Nord Stream
Pipelines
Interior view of a fuel cell
20 TRADE & INDUSTRY
Shah Deniz Consortium announces
25-year sales agreements with
European gas purchasers
Reports
GAS QUALITY
26 Natural gas interchangeability in China: some experimental
research
by Y. Zhan and Ch. Qin
GAS QUALITY
36 Admissible hydrogen concentrations in natural
gas systems
by K. Altfeld and D. Pinchbeck
GAS STORAGE
48 Modern technical measurement concepts for the
underground storage of natural gas
by A. Zajc and M. Friedchen
Columns
1
6
70
4
gas for energy
Editorial
Hot Shot
Diary
Issue 3/2013
3 – 2013
26 REPORT
48
Natural Gas interchangeability in China
REPORT
TABLE OF CONTENTS
68 PRODUCTS
Technical measurement
concepts for the underground
storage of natural gas
Software package offers
versatile product monitoring
MICRO CHP
54 Seven things you need to know about Micro-CHP
in Europe
by S. Dwyer
BIOGAS
58 Ensuring operational safety of the natural gas grid by
removal of oxygen from biogas via catalytic oxidation of
methane
by F. Ortloff, F. Graf and Th. Kolb
News
8
22
24
Trade & Industry
Events
Personal
visit us at our website:
www.gas-for-energy.com
66
68
Associations
Products & Services
Issue 3/2013
gas for energy
5
HOT SHOT
Interior view of a fuel cell
Interior view of a fuel cell
In a chemical reaction liquid or
gaseous energy can be converted
into electrical power.
Source: DLR
TRADE & INDUSTRY
Finngulf LNG
included in the list of
projects that may qualify
for EU funding
T
Bestobell secures
major marine contract
U
K-based Bestobell Valves, part of the President
Engineering Group (PEGL), has won a major new
contract to supply cryogenic valves to TGE (Marine
Gas Engineering) in Germany for two fuel-efficient
dual-fuel cruise liners.
The valves are destined for Mitsubishi Heavy
Industries in Japan where the 984ft long vessels are
being built, on behalf of Aida cruise lines of Germany.
Aida’s new cruise ships will be able to run on LNG
(liquefied natural gas), which offers greater fuel efficiency, as well as marine diesel oil or heavy fuel oil.
Bestobell Valves will supply around 40 globe valves,
non-return valves and check valves for the contract,
which are currently being made at its factory in Sheffield ready to be shipped out to TGE in August this
year for incorporation in their fuel system.
8
gas for energy
Issue 3/2013
he list of Projects of Common Interest (PCI)
adopted by the European Commission does not
yet provide a final decision on whether Finland or
Estonia will receive investment funding for a Gulf of
Finland LNG import terminal. The final decision will
be made with the EU-wide application process taking place in 2014, in which all the PCI-candidates are
eligible to apply. Finland and Estonia are both seeking EU investment funding for a liquefied natural
gas (LNG) import terminal. Both projects are
included in the list of eligible projects published by
the EU, but funding can only be granted to one of
the projects.
A condition set for EU financial support is that the
terminal must serve multiple EU countries. The Balticconnector gas pipeline planned by Gasum will enable
the interconnection of the Finnish and Baltic gas networks, which means the Baltic States would also benefit from the Finnish terminal.
The Finngulf LNG terminal project and the Balticconnector gas pipeline comprise one of the largest
infrastructure undertakings in Finland. The import terminal would increase diversity and flexibility in natural
gas sourcing and enable new uses for natural gas outside the natural gas network.
Granted PCI status, the Finnish and Estonian terminal projects can next apply for financial investment
support in the Connecting Europe Facility (CEF) process covering all of Europe’s gas and electricity infrastructure projects and beginning in early 2014. Representatives of Gasum and the state of Finland will also
continue negotiations to reach a compromise with
Estonia. In this the countries could make a mutual
decision on which one will proceed to the CEF application already by the end of this year.
Gasum is making preparations for its own investment decision following the decision on EU financial
support in late 2014. From there terminal construction
would progress in phases, and LNG imports could
begin in late 2016, which is when the Balticconnector
would also be operational. The terminal would operate on full capacity at the end of 2018.
TRADE & INDUSTRY
WELTEC BIOPOWER
develops 1.6 MW of green
energy in France
T
ogether with the partner Domaix Energie in Alsace,
the company from Germany has started rolling out
four agricultural biogas plant projects in France.
Apart from agricultural substrates, the biogas plants,
whose construction has already started, will use sludge
and food leftovers. This documents the trend that
French biogas plants are increasingly fermenting industrial leftovers. Since the introduction of the separation
and utilisation of kitchen waste from large catering
establishments in France at the end of 2011, organic
waste from schools and company cafeterias must be
used for the production of energy.
Accordingly, WELTEC will integrate hygienisation
units in order to utilise the substances of category 3
according to the EU directive. Another common feature
11. - 13 . 2 . 2 0 14
Essen /Germany
concerns the use of the heat: In all four biogas plants,
the residual heat will be used in a digestate dryer in
order to reduce the amount of liquid manure and market the dried digestate.
Thanks to the heat utilisation concept, the four
biogas plants have an efficiency of at least 70 percent,
enabling the operators to benefit from the heat and
power bonus, which is up to € 0.04/kWh in France.
DEVELOPMENTS AND TR
ENDS IN THE
ENERGY INDUSTRY – DO
YOU KNOW
WHERE THE MARKET G
OES?
European Electricity Ma
rket
European Electricity Gr
id
International Gas Marke
t
Small Scale LNG
Power Trading in Europe
PROGRAMME AND REGI
STRATION UNDER
www.e-world-essen.co
m/congress
Issue 3/2013
gas for energy
9
TRADE & INDUSTRY
Record-setting "PIG" run for the integrity inspection
of the Nord Stream Pipelines
N
ord Stream has concluded a comprehensive inspection of the internal condition of both pipelines, as
part of its long-term safety and pipeline integrity management strategy.
A measurement tool about 7 m long and weighing
more than 7 t was sent through the pipeline from Russia
to Lubmin, Germany, travelling at 1.5 m a second propelled by the gas pressure. The pipeline inspection gauge
(PIG) collected high-resolution data on material integrity
along the 1,224 km route. The journey for Russia to Germany took ten days.
This was the first time that a pipeline of this length and
a wall-thickness of up to 41 mm has been analysed in this
way. For the inspection run, a device with one of the
strongest magnetic fields was developed by ROSEN Group
in Lingen, Germany. The “intelligent PIG” has an array of
electronic sensors, which screen the material integrity and
the geometry of the pipeline. The PIG has collected over
one Terabyte of data on its journey from Russia, and the
10
gas for energy
Issue 3/2013
data was recorded at a rate equivalent to 12 Megabits per
second, 30 times faster than cellular data networks.
The high-resolution measurement technology can
detect smallest changes in the condition of the pipelines.
The exact geographical position of the pipelines is also
being documented. The first evaluation of the results
confirms that the pipelines have moved only minimally
while being operated under full pressure and that there
has been no corrosion or deformation.
In 2012 and early summer of 2013, Nord Stream had
already examined the external condition of both pipelines. This external visual and instrumental inspection of
the pipeline was conducted via remotely operated vehicles (ROVs) followed by support vessels. The results of the
internal and external inspections form the baseline data
for regular inspection cycles in the coming years. This will
allow any potential changes in the position of the pipes,
minimal corrosion and even the smallest mechanical
defects to be detected at an early stage.
gas
19. EUROFORUM-Annual Conference
4 to 6 December 2013,
Kempinski Hotel Bristol Berlin – Germany
Meet the decision makers of the
European gas industry!
A selection of the experts panel …
The European Gas Market –
Facing the current challenges in Europe!
6 December 2013
Ali Arif Aktürk,
NaturGaz
Rashid Al-Marri,
South Hook Gas
Klaus-Dieter Barbknecht,
VNG – Verbundnetz Gas
Peter Drasdo,
Fluxys TENP
r
r
r
r
r
r
r
r
r
r
The structure of the European gas market – characteristics and specificities
Roadmap to a Single Gas Market in 2014: further steps
New sources – new routes – new partners for Europe
The importance of continuing investments in E&P
Development of trading markets and the supply & demand situation
The particular importance of LNG for the European Gas Market
The Future of L-Gas Network: is a new Policy necessary for Gas Trading?
One grid from Italy to Belgium – is this the transition to an independent super TSO?
The impact of the new market models
Emerging Gas Markets: how competition improves
Presentations planned from the following countries:
Hans-Peter Floren,
OMV
Bart Jan Hoevers,
Gasunie Transport
Don´t miss the Pre Conference on
The German Gas Market
Angela Merkel‘s re-election:
Implications for Germany‘s energy
reform and the German gas market
Ireneusz Łazor,
Polish Power Exchange
Jayesh Parmar,
Baringa Partners
(Conference Language: German)
www.erdgas-forum.com/programme
Infoline: +49 (0) 2 11/96 86–34 36 [Olivia Eberwein]
Beate Raabe,
Eurogas
TRADE & INDUSTRY
ista signs cooperation
agreement with
Spanish energy utility,
Gas Natural Fenosa
T
he energy service provider, ista, and the leading Spanish gas utility, Gas Natural Fenosa, have signed a
cooperation agreement for the Spanish market. According to this agreement, ista will install 60,000 heat allocation meters in Gas Natural Fenosa properties and perform the meter-reading, billing and device management.
The EU Energy Efficiency Directive (EED), which came
into force at the end of 2012, is to be already transposed
into national law by June 2014. The directive sets binding
targets for the efficient use of energy, especially in the
building sector, and prescribes, among other things, that
consumers throughout Europe have to be informed individually and regularly about their energy consumption.
Roughly 15 % of energy can be saved through the individual metering and billing of consumption data alone.
Roughly 200 households in Germany currently receive
monthly consumption data, which can be retrieved at any
time online or using a smartphone, in Europe’s largest
model project conducted in conjunction with Deutsche
Energie-Agentur GmbH (dena – German Energy Agency),
the German Tenant Organisation (DMB) as well as the Federal Ministry of Transport, Building and Urban Affairs. Initial
results in early 2014 should once again prove that providing consumption information during the year can make a
vital contribution to greater energy, CO2 and cost efficiency, in particular with regard to the cost/benefit ratio.
GDF SUEZ strengthens
strategic partnership
with Mitsui in Australia
G
DF SUEZ and Mitsui & Co., Ltd. (“Mitsui”) have
agreed to strengthen their existing partnership in
Australia. As part of the agreement, Mitsui will acquire a
28 % equity interest in five assets from GDF SUEZ Australian Energy, a wholly owned subsidiary of GDF SUEZ.
GDF SUEZ Australian Energy owns and operates
3,540 MW of renewable, gas fired and brown coalfired generating units in Victoria, South Australia and
Western Australia.
Both companies already have a strong, long-term
partnership following a successful track record of joint
investment and cooperation for projects in Canada,
Europe, the Middle East, Africa, Asia as well as an existing partnership agreement in Australia, where Mitsui
has owned 30 % of the Loy Yang B power station and
21 % of Kwinana power station since 2004. This transaction will extend the existing partnership with Mitsui
to the entire Australian portfolio.
The transaction, which comprises four, principally
merchant, assets with a total capacity of 2,463 MW
and the Simply Energy retail business, will create a
common ownership platform across the Australian
generation asset portfolio.
This new partnership, which is in line with the
Group’s transformation strategy, will contribute to the
Group’s 2013-14 portfolio optimisation program and will
lead to a reduction in the Group’s net debt upon completion of the transaction, which is expected this month.
Prysmian Group signs major contracts
with Brazilian Petrobras
P
rysmian Group has been awarded new major contract worth a total of up to approximately $ 260 Million related to a frame agreement for Umbilical products
for offshore oil and gas extraction, by Brazilian oil company Petrobras.
The award refers to a frame agreement for 360 km of
Umbilicals, most of it to be used in pre-salt fields, in 16
different cross sections and related ancillaries, offshore
services and qualifications, worth approximately $ 260
Million with 50 % minimum purchasing commitment and
call-off orders to be placed within a two-year period.
12
gas for energy
Issue 3/2013
The Group has also been awarded by Petrobras the
extension to 2016 of the existing frame agreement for
flexible pipes, worth a total of $ 95 Million of which $ 20
Million have already been called off for the Macabu,
Jubarte and Marlim Leste fields.
Both the Umbilicals and the Flexible Pipes for the new
contracts will be manufactured in the Group’s state-ofthe art- plants in Vila Velha, Brazil, an industrial plant with
high production capacity and a strategic location (on the
Vitoria channel - Espirito Santo State) fully dedicated to
Subsea Umbilicals, Risers and Flowlines (SURF).
TRADE & INDUSTRY
Bilfinger automates power-to-gas pilot
plant for E.ON
B
ilfinger is responsible for automation technology at
the Falkenhagen power-to-gas pilot plant, which
E.ON will use to feed hydrogen into the natural gas
grid for the first time. The automation solution installed
by subsidiary Bilfinger GreyLogix ensures that the plant
is operational around the clock and monitors the volume of hydrogen being fed into the grid.
The pilot converts up to two megawatts of
electrical output to hydrogen per hour and subsequently feed it into the natural gas grid. With this
project, E.ON hopes to gain further expertise in
the storage of regenerative gas in the natural gas
infrastructure. With such expertise, it is possible to
store over-capacity from fluctuating renewable energy
sources and to access it when needed.
In order to tap into new technologies and markets,
research and development efforts have been intensified. As lead investor, Bilfinger supports the young
start-up company Sunfire from Dresden. Sunfire
develops concepts for using renewable energy to
convert carbon dioxide and water into fuel (power-toliquids) or gas (power-to-gas).
14 – 16 JANUARY 2014
NUREMBERG, GERMANY
· World’s largest BIOGAS trade fair
· 3 days with plenary sessions, workshops, best-practice
· Excursions 17 January 2014
23 rd CONVENTIONwww.biogastagung.org
AND TRADE FAIR
www.biogastagung.org
Main Topics:
· Biogas as a part of the energy turn around
· Trends in the construction of biogas plants
· New challenges in environmental and safety issues
· International: The future of export business
Main speaker Prof. Dr. Claudia Kemfert, (DIW Berlin)
News: www.biogastagung.org/en
Issue 3/2013
nn´s
Biogasaknad
o it
gas for energyg a13
BioFit füsr cdie Zukunft