gas networks

Enaon EDA plans €769m in new gas network projects over 5 yrs

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Enaon EDA – formerly the gas distributor DEDA – as the new single distribution network operator under the umbrella of the Italian energy group Italgas has been named, has included 769 million euros worth of investments and just over 113,000 new connections in its new five-year development plan covering 2024 to 2028.

The Enaon EDA plan, through which the company aims to further expand the gas distribution network around the country, was forwarded for public consultation yesterday by RAAEY, the Regulatory Authority for Waste, Energy and Water.

Its projects, promising to add 2,625 kilometers of new networks to the country’s gas grid, concern network expansion projects, interconnection projects, network security and reinforcement projects, energy saving projects, digitalization projects and other investments.

Enaon EDA will allot the biggest proportion of the 769 million euros in investments for projects in the wider Athens area, where a sum of 175.2 million euros in investments is planned. Thessaloniki will follow with projects worth a total of 129.1 million euros. Thessaly comes next with investments worth 105.5 million euros.

Enaon Eda: 13 cities to be linked with gas network in ’24

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Enaon Eda – formerly the gas distributor DEDA – as the new single distribution network operator under the umbrella of the Italian energy group Italgas has been named, plans to broaden natural gas usage in Greece by expanding the country’s gas distribution network to an additional 13 cities in 2024.

The 13 cities are: Grevena, Giannitsa, Veria, Florina, Kastoria, Argos Orestiko, Amfissa, Alexandreia, all in the north, Orestiada, in the northeast, Ioannina, in the northwest, Livadia and Karpenissi, both in central Greece, as well as western port city Patras.

Work on the distribution network’s development in Patras, an initiative aiming to attract 38,000 new customers in 2024, is already underway.

The effort is set to continue at Grevena, commissioning here planned for March, and will be followed by Florina and Kastoria, Enaon Eda officials informed media yesterday.

The Italian company’s gas network expansion plan for 2024 will entail development of over 650 km in low-pressure pipelines and roughly 50 km in medium-pressure pipelines. In the wider Athens area, alone, an additional 30 km is planned to be added to the city’s gas network this year.

Also, the network’s digitization with the integration of smart meters and advanced technological systems for cyber security are central to the company’s immediate plans.

The Italgas group’s management informed that its strategic plan for Greece will be updated in the summer and include details for 2025.

Gas amounts channeled north on decline, projects in doubt

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Market interest for further development of European gas infrastructure appears to be weakening, raising concerns about the success of forthcoming trans-Balkan market tests aimed at increasing regional network capacity, sources have underlined.

Although the level of interest for further development of gas infrastructure in Greece and the wider region was considerable in non-binding phases of market tests, potential users are now holding back as the procedure’s binding phases approach.

This essentially means that market players are avoiding making long-term commitments, which is necessary in order for the network expansion and upgrade plans to proceed.

Gas-order cancellations from Greece to markets further north are being recorded, which, if continued, will cast doubts over gas network expansion plans, or even make them unnecessary, sources told energypress.

A similar trend has taken hold at Greek gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens, as market players are cancelling LNG shipments because they have nowhere to channel gas quantities.

Though there is still plenty of time ahead before binding bids are submitted to trans-Balkan market tests, whose results will offer a clear-cut picture of the situation, the level of interest being recorded by operators preparing project proposals is well below that expressed in non-binding market tests. The Greek-Bulgarian IGB gas pipeline, now being gauged for a capacity boost, is one such example.

Gas consumption levels are on a downward trajectory and gas storage facilities in the EU are at high levels for this time of the year, averaging 68.61 percent full.

It is still too early to draw definite conclusions, but latest data is showing a change of scene. It remains to be seen how this shift could influence the investment plans of operators.

Free gas-network connections ended in most parts of Greece

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The termination of free-of-charge connections to the country’s gas grid as of January 1 is expected to prompt a slowdown of new residential connections in most parts of the country.

Under the new system, consumers will be required to either fully or partially cover connection-fee costs, depending on their respective area’s natural gas penetration levels.

Previously, RAAEY, the Regulatory Authority for Waste, Energy and Water, offered consumers a universal 100 percent discount on connection fees, which fueled strong growth in new gas-network connections and also subdued network usage tariffs as a result of greater consumption levels and their economies of scale.

According to the new system, consumers in municipalities with low-level natural gas penetration levels are expected to still be offered connection-fee discounts of up to 100 percent.

Consumers based in municipalities where natural gas penetration is between 25 and 75 percent will be granted a connection-fee discount of up to 70 percent in 2024 and 60 percent in 2025.

Connection-fee discounts are expected to be scrapped for consumers based in municipalities with natural gas penetration rates of more than 75 percent, according to the RAAEY decision.

Revythoussa LNG terminal still vital despite lessened activity

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Capacity increases at the TAP pipeline, facilitating the delivery of Caspian gas to destinations in Europe, and the IGB gas pipeline linking Greece and Bulgaria, plus the scheduled launch, early in 2024, of the Alexandroupoli FSRU at the country’s northeastern port, will lessen the number of LNG tankers delivering quantities to the Revythoussa LNG terminal, just off Athens, for eventual distribution to the Bulgarian market, but the terminal remains vital for Greece’s energy security and supply.

In addition, an agreement signed last January by Turkey and Bulgaria’s respective state-owned energy companies, Botas and Bulgargaz, for Turkish supply to Bulgaria of 1.5 bcm of natural gas, annually, over a 13-year period, also promises to further decongest activity at the Revythoussa LNG terminal.

The Bulgarian-Turkish agreement had prompted a number of questions in the domestic and European markets regarding its terms and conditions, as well as its impact on Greece’s gas infrastructure.

However, as was recently highlighted by Sotiris Bravos, Senior Commercial Services Manager at DESFA, Greece’s gas grid operator, the Revythoussa LNG terminal’s commercial role will only be limited in trade concerning the Bulgarian market.

In 2022, the Revythoussa LNG terminal covered two-thirds of Bulgaria’s natural gas needs, a performance not expected to be repeated this year given the increased number of facilities – TAP, IGB, and, slightly later on, the Alexandroupoli FSRU – serving the Bulgarian market.

Even so, the Revythoussa LNG terminal remains a crucial part of the country’s gas grid, especially regarding supply security and the grid’s balance, Bravos, the DESFA official, noted.

At present, the Revythoussa LNG terminal is Greece’s only LNG entry point and one of the country’s four natural gas entry points.

DESFA’s administration believes new gas infrastructure will not compete against the Revythoussa LNG terminal as it remains a facility of major importance for the Greek gas grid and the significantly increased needs of central Europe.

Romania’s Transgaz taking on 15% stake in Volos’ Argo FSRU

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Romanian gas grid operator Transgaz has agreed to take on a 15 percent stake in the Mediterranean Gas consortium, promoting the Argo FSRU project at Volos, on the mainland’s east coast, a move that further boosts the LNG terminal’s development prospects as it promises the terminal a gas supply route to Balkan and central European markets.

Mediterranean Gas has lodged an application to Greek authorities for an equity make-up revision facilitating Transgaz’s entry into the consortium with the 15 percent share.

Mediterranean Gas is also holding discussions with other potential partners to further expand its shareholder base, while developments on the matter are expected soon, sources informed.

A recent first-phase market test conducted by Greek gas grid operator DESFA to gauge a capacity increase for the country’s gas grid highlighted Volos’ prospective FSRU as one of the interconnection points of greatest interest for users.

Romania’s natural gas market is one of considerable size as it can absorb up to 13 bcm. Also, the country’s gas network offers interconnectivity with neighboring countries as well as with central European markets, and, as a result, offers potential for transportation of significant gas quantities to the north.

Transgaz operates a gas network totaling 25,000 km, has acquired the Moldovan network, and manages 7 bcm in gas storage facilities.

The Argo FSRU, which will be designed to supply up to 4.6 bcm of natural gas, annually, is planned to begin operating in early 2024.

Greek gas hub potential now realistic, DESFA actions show

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Greece, for the first time, has shown true potential to soon establish itself as a regional gas hub and gateway for southeast Europe, judging by the results of gas grid operator DESFA’s recent auctions offering grid capacity reservations, as well as the operator’s non-binding market test for a prospective expansion of the country’s gas transmission network.

DESFA has prepared an extensive ten-year development plan that is fully aligned with the new market conditions taking shape, as well as with the company’s efforts to achieve energy-transition objectives, the operator’s administration has underlined at a news conference.

Greek gas exports increased by 15.09 percent in the first half of 2023, compared to the equivalent period last year, according to DESFA data presented at the news conference.

Also, DESFA’s non-binding market test for a prospective expansion of the country’s gas transmission network drew the participation of 27 companies, 17 of these from abroad, primarily central and southeast Europe, such as Bulgaria, Romania, Austria, Hungary, Slovakia, Germany, Cyprus, North Macedonia, as well as the USA.

Forty percent of the market test’s participants have never before been active in Greece’s natural gas market, DESFA announced.

Participants expressed interest for all the country’s gas grid entry points (Sidirokastro, Nea Mesimvria, Kipoi and Agia Triada), as well as for connections to Greece’s prospective FSRUs (Gastrade, Argo, Dioryga Gas, Elpedison).

Highlighting the Greek natural gas market’s export orientation, exports to Bulgaria totaled approximately 2.4 bcm in 2022, roughly half of Greece’s annual gas consumption last year, 4.9 bcm.

Swifter network growth at EDA Attiki, spurred by new culture

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Gas distributor EDA Attiki, covering the wider Athens area, has presented a greatly improved initial set of results concerning network growth and customer service efficiency, achieved following the company’s adoption of an upgraded corporate strategy.

EDA Attiki added more kilometers to its network during the first half of 2023 than it did throughout 2022, while the company has committed to consumer network connection waiting periods of no more than 30 days once related agreements have been signed, the gas distributor’s CEO, Leonidas Bakouras, told journalists yesterday.

The chief executive attributed the company’s improved performance to a new mentality adopted at EDA Attiki, the diligent efforts of its executives and employees, as well as the company’s utilization of multiple opportunities offered by the privatization of parent company DEPA Infrastructure, now under the wings of Italian energy giant Italgas, possessing vast experience and knowhow.

As part of its customer service upgrade, EDA Attiki has established an online service through which e-contracts concerning new network connections may be signed and supporting documents can be submitted. EDA Attiki is also adding 14 new customer service points to its overall offering.

EDA Attiki amassed an impressive total of 5,061 new connections in the first half of 2023, a complete turnaround from unfavorable data recorded during the energy crisis.

EDA Attiki had achieved a record number of new connection contracts in 2021, totaling 24,000, before an energy crisis-related slowdown midway through last year.

Highlighting the return of natural gas as a preferred energy source, seven of the company’s industrial customers who had turned to alternative sources at the beginning of the year, in an effort to offset elevated gas prices, have returned to natural gas over the past couple of months, Bakouras pointed out.

EDA Attiki aims to increase its total number of natural gas connections to 200,000 by the end of this year, from 186,515 at the end of 2022.

The company’s wider Athens network, based on data recorded at the end of 2022, covers 52 municipalities, measures 3,981 kilometers – both low and high-pressure systems – and represents a 28.5 percent share of the energy market.

EDA Attiki represents 440,000 households, 7,500 commercial consumers, and 230 large-scale industrial and commercial consumers.

DEPA Attiki’s development plan covering 2023 to 2029 aims to expand the company’s gas network to a total of 58 municipalities in the wider Athens area.

 

 

 

 

 

Italgas seeking WACC of 8-9% to carry out Greek investments

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Italgas, Europe’s second largest gas distributor, is seeking a WACC level of between 8 and 9 percent over the next four-year regulatory period in order to carry out its Greek investment plan through the Italian group’s recently acquired DEPA Infrastructure and its three gas distribution subsidiaries, EDA Attiki, EDA Thess and DEDA.

Italgas has submitted three related studies to RAAEY, the Regulatory Authority for Waste, Energy and Water, as support for what the energy group believes to be the necessary WACC level for the regulatory period starting this year and running through 2026, its CEO, Paolo Gallo, noted during a London presentation last week of the company’s strategic plan for 2023 to 2029.

RAAEY will initially reach a decision, expected early in July, on Italgas’ WACC level for 2023, given priority through a legislative revision ratified just months ago.

Prioritizing the 2023 WACC level for DEPA Infrastructure will enable Italgas to reassess its investment plans for the year concerning its three gas distribution subsidiaries, EDA Attiki, EDA THESS and DEDA.

DEPA Infrastructure’s allowed revenues and tariffs for 2023 will be determined at a latter date.

 

 

DESFA market test for network expansion draws 27 bidders

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The first round of a market test staged by gas grid operator DESFA for a prospective expansion of the country’s gas transmission network has attracted 27 non-binding bids, deemed, by the operator, as a satisfactory level of participation that includes high-profile players, energypress sources have informed.

The procedure’s participants include a wide range of major Greek and foreign players, from large-scale consumers to gas transit companies and traders who view the Greek system as a gateway for the transportation of gas to central Europe. A considerable number of companies operating in the Balkan market are among the DESFA market test’s first-round participants.

It remains to be seen if this high level of first-round interest will develop into binding second-round bids.

Initial bids will soon be assessed over a three-stage process, beginning with an evaluation of bid levels, followed by technical analysis, expected to take two months until mid-July, and, finally, tariff plan feasibility, based on infrastructure to be deemed as necessary by DESFA.

The market test’s second round of binding bids is expected to start around September and run until late spring in 2024, as originally scheduled by DESFA when it launched the procedure last March.

DESFA market test for network expansion offers positive signs

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A market test staged by gas grid operator DESFA for a prospective expansion of the country’s gas transmission network has delivered positive first signs, attracting, according to energypress sources, a satisfactory level of participants for its first round of non-binding bids.

The market test is being conducted with the aim of shaping a list of projects to cover existing and future needs of gas network users, as the system’s capacity at present is well below levels required by current demand.

The process will be used by DESFA to gauge the level of interest of international and domestic players for the development of projects facilitating greater gas transmission within and beyond Greece.

The first round of the market test ends tomorrow. Barring unexpected developments, an extension is not on the cards.

DESFA will then assess first-round bids submitted before launching a second round in September, a binding stage expected to last until the end of spring in 2024.

Market trends have indicated that, in the forthcoming years, the country’s gas transmission system will need to supply new residential areas (western Macedonia in the north as well as Greece’s west) and also serve new interconnections with neighboring countries (North Macedonia, Bulgaria and, via TAP, Albania and Italy.

DESFA market test pivotal for gas network investment plan

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A market test to soon be announced by gas grid operator DESFA will be instrumental in shaping the operator’s investment plan intended to reinforce and expand the country’s gas network.

Final details of the market test are currently being worked on by DESFA’s legal team before its first round, a non-binding stage, is announced.

Interested parties will be invited to note gas network points of entry and exit they would like to use, as well as gas quantities they plan to transport through the system. This feedback will then be used by DESFA for the establishment of a demand assessment report.

To be divided into demand-related scenarios linked with specific investments for network infrastructure projects, this report will need to be approved by RAE, the Regulatory Authority for Energy, before a second-round market test can be staged.

DESFA plans to complete the market test’s first round by summer and the second round by the end of the year.

Gas distribution operator 5-year investment plans worth €788m

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The country’s three gas distribution operators, EDA Attiki, EDA Thess and DEDA, covering Athens, Thessaloniki-Thessaly and the rest of Greece, respectively, have proposed investments totaling 788 million euros for the network’s development over a five-year period between 2023 and 2027.

Italgas, the new owner of the EDA companies, has set ambitious objectives to expand Greece’s existing gas distribution network in order to facilitate further market penetration of gas around the country.

The three gas distribution operators have been forwarded their network development plans to RAE, the Regulatory Authority for Energy, for consultation.

DEDA, covering the country’s north, northwest, west, as well as the Peloponnese, has forwarded the biggest investment plan of the three gas distribution operators. It is worth 378.3 million euros and aims to increase the number of customers in these regions to 103,127 by 2027.

During this same five-year period, DEDA aims to develop low and medium-pressure distribution networks of more than 2,600 kilometers. This extension is expected to enable gas quantity distribution quantities of 4.7 million MWh for households and businesses in five years’ time.

EDA Attiki, covering the wider Athens area, has submitted a five-year network development plan budgeted at 159.59 million euros, its aim being to increase the number of customers to 531,939 from 430,147 at present.

EDA Thess has proposed a five-year network development plan for Thessaloniki worth 136.6 million euros for projects to include an additional 359.7 kilometers to the city’s distribution network, enabling an increase in the number of customers to more than 331,818 from 275,172 at present.

The EDA Thess network development plan for Thessaly is worth 113.9 million euros and expected to enable the number of customers in this region to reach 147,177 by 2027 from 118,512.

 

DESFA market test for gas network upgrade imminent

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A market test to be staged by gas grid operator DESFA to gauge the level of investment interest and need for a network capacity increase is imminent and could be launched as early as this week or, if not, by the end of the month at the very latest, energypress sources have informed.

DESFA has determined a gas network upgrade and capacity boost are needed as the continent’s efforts to end reliance on Russian gas supply are changing Europe’s energy map and reversing the flow of gas.

The developments have elevated the role of Greece as an important gas supplier to markets north of the country, meaning the country’s gas infrastructure needs to be upgraded in order to handle the increased gas quantities expected to flow through the country in a northward direction. In previous decades, natural gas, supplied by Russia, flowed from north to south.

When offering its approval of DESFA’s ten-year development plan, RAE, the Regulatory Authority for Energy, requested a market test from the operator for the gas network upgrade plan.

DESFA, sources informed, intends to stage the first round of a market test for the project imminently, the aim being to complete this procedure by summer and follow it up with a second round of binding bids, which the operator wants completed by the end of the year.

DESFA plans to stage an international road show to attract investors and potential buyers, the sources noted.

RAE approves EDA development programs covering 2022 to 2026

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RAE, the Regulatory Authority for Energy, has approved five-year development programs submitted by Greece’s three gas distribution operators, EDA Attiki, EDA Thess and DEDA, covering Athens, Thessaloniki-Thessaly and the rest of Greece, respectively, energypress sources have informed.

RAE is expected to soon publish these development programs, the sources noted.

The three operators have already submitted their ensuing five-year development plans, covering 2023 to 2027, to the authority, expected to offer its approval within the next two to three months, after two pending issues are settled.

Italgas, the new owner of the EDA companies, has set ambitious objectives to expand Greece’s existing gas distribution network in order to facilitate further market penetration of gas around the country.

Italgas aims to increase total gas connections in Greece to a level of one million by 2028, from roughly 600,000 at present.

However, RAE has maintained a cautious stance as it wants to ensure these investments do not end up becoming an excessive burden for consumers.

 

Gas meters to be replaced with digital equivalents by 2027

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Gas distributors EDA Attiki and EDA THESS plan to gradually replace 400,000 existing natural gas meters in Athens, Thessaloniki and Thessaly, the areas they cover, by 2027 with upgraded smart versions, a project estimated to cost between 40 and 50 million euros.

The upgrade promises to play an important role in the digitization of the country’s gas distribution, greatly improving its performance as well as services offered to households and businesses using natural gas.

The gas companies aim to have this ambitious project included in development programs covering 2023 to 2027.

The two operators have already prepared a cost-benefit analysis that will soon be forwarded for consultation by RAE, the Regulatory Authority for Energy.

The authority will then recommend an overall strategy for the project to the energy ministry, which, in turn, will deliver a ministerial decision paving the way for the project’s launch through development programs.

 

RAE reserved about Italgas’ network expansion plan

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RAE, the Regulatory Authority for Energy, is deeply concerned about the prospect of gas distribution network expansions into new geographical territories as, at present, amid the energy crisis, it remains unclear whether an expanded network would result in a greater number of overall gas users in Greece or, on the contrary, excessively increase the cost of this fuel for existing gas users through higher charges on regulated tariffs.

Italgas, following up on its recent 733 million-euro acquisition of DEPA Infrastructure, one of Greece’s biggest energy-sector privatizations, is keen to expand the country’s gas network through three DEPA Infrastructure subsidiaries, EDA Attiki, EDA THESS and DEDA. The expansion project is included in their investment plans for 2022 to 2026.

RAE will soon need to decide on whether to approve these gas network expansion plans.

Italgas has made clear it views geographical expansion of the country’s gas network as am approach that will increase gas usage in the Greek energy market.

Italgas aims to increase the number of gas users in Greece from approximately 600,000 at present to one million by 2028.

 

New household gas connections plunge 50%, energy crisis prompts hesitation

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The number of households connecting to the gas grid has fallen by roughly 50 percent since mid-2021, many residential consumers now hesitant to make the switch as natural gas has lost its appeal amidst the energy crisis.

Consumer hesitation for new gas connections has been even more severe in the business category, where it has just about frozen.

Industrial consumers, too, have reduced their consumption levels of natural gas, turning, if technically possible, to alternative fuels such as diesel or LPG.

This overall downturn in the usage of natural gas is having a wider affect on the gas sector, impacting distribution network operators, gas companies as well as technicians specializing in the development and operation of gas-based facilities.

Even though supply of Russian gas to Greece has not been affected – Turk Stream, supplying the country via Turkey, has been operating continuously since the beginning of the Russian invasion of Ukraine – the possibility, alone, of a mandatory 15 percent reduction of gas usage should a heightened state of alert be triggered in Europe has led to reservations among businesses and residential consumers.

Natural gas prices have, for the time being, only remained competitive in Greece courtesy of generous subsidies offered to households by gas utility DEPA Commercial.

 

DESFA market test for gas grid lift includes 3 pipeline doubles

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Gas grid operator DESFA has begun preparing a market test for prospective gas transmission system expansion projects, based on a requirement set by RAE, the Regulatory Authority for Energy, as part of its approval of the projects.

The market test’s details are expected to be completed by the end of this month. A related event will then be staged to update gas transmission system users on the market test’s process as well as projects to be offered for capacity reservations.

RAE’s market test requirement for these projects has been incorporated into its approval of DESFA’s ten-year development plan covering 2022 to 2031, as the authority wants the operator to gauge the level of interest and need concerning the gas transmission system’s expansion.

According to energypress sources, three new gas pipelines, to serve as doubles at sections of the existing infrastructure, will be included in the market test.

One of the three pipelines is planned to complement infrastructure covering parts of the wider Athens area, a second pipeline is envisaged as a double for a pipeline running from Athens to Thessaloniki, and a third pipeline is planned to run as a double alongside a line from Thessaloniki to Komotini, northeastern Greece.

The EU’s decision to gradually diminish its reliance on Russian gas is changing the continent’s gas supply map. Subsequently, gas entry points from the continent’s south are now becoming more crucial, giving rise to the need for gas infrastructure boosts in Greece.

 

Operators tasked with LNG refueling of autonomous gas networks

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LNG refueling at autonomous gas networks will be assigned to companies developing this infrastructure, RAE, the Regulatory Authority for Energy, has decided.

RAE took its decision after Italgas, buyer of gas company DEPA Infrastructure, responded favorably to a proposal by the authority for DEPA Infrastructure’s distribution subsidiaries to take on the refueling task at autonomous gas networks.

Gas grid operator DESFA was also interested in taking on these services. Grid operators are most appropriate for network refueling services as they have a clear picture of consumption levels at any given moment, and, by extension, LNG refueling needs.

Hesitation by some operators prompted RAE to turn to Italgas. The Italian company is already accustomed to autonomous gas network refueling as a result of an equivalent model it applies for Sicily, where local networks are refueled with LNG.

 

 

 

Market test ahead of gas system boost decisions

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Authorities at gas grid operator DESFA and RAE, the Regulatory Authority for Energy, are set to begin a new round of talks to decide if the country’s gas infrastructure requires expansion.

DESFA will need to submit a proposal no later than September 30 regarding any amendments that may be required to its management code in order to conduct a market test exploring the interest and necessity of a gas system expansion.

DESFA’s ten-year development plan covering 2022 to 2031, which includes a proposal for the gas system’s expansion, budgeted at 422 million euros, still needs to be approved.

Gas conversion cost support key to further penetration of energy source

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The government plans to soon launch a subsidy program offering households incentive to connect with natural gas networks, though coverage of conversion costs, Adonis Georgiadis, the minister for development and investment, has told an event staged by gas distributor Hengas in Kalamata.

The subsidy program will encourage a greater number of consumers, especially households, to make the switch to natural gas, Hengas officials pointed out to energypress.

According to Hengas’ business plan, entailing the development of natural gas networks and stations to cover 11 provincial cities around Greece, the Peloponnese cities of Kalamata and Sparta will be supplied compressed natural gas (CNG) by the first quarter of 2023.

Megalopoli, Tripoli and Corinth have been connected to the gas network ahead of schedule, Hengas has reported.

Hengas’ development plan, budgeted at 65 million euros and approved by RAE, the Regulator Authority for Energy, entails the development of natural gas networks and stations covering a total of 11 provincial cities – Tripoli, Corinth, Megalopoli, Edessa, Polykastro, Polygyros, Deskati, Naousa, Skydra, Kalamata and Sparti – either through direct connections with the country’s gas grid or CNG and LNG transportation.

NECP officials at odds over future gas role in Greece

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Local authorities are at odds over the role of natural gas in the country’s National Energy and Climate Plan, to be revised, as well as on the decarbonization road map for the coming decades.

A second session just held by an energy ministry working group assembled for the NECP revisions has revealed contrasting views on the future plans for natural gas in Greece, energypress sources have informed.

One side of the working group’s members wants an end to the expansion of natural gas in Greece and containment of investments for new natural gas infrastructure, especially networks.

At the other end, a second group of officials supports that Europe’s intention to end the continent’s reliance on Russian natural gas highlights the need for diversification of energy sources in Greece, as the country’s system is designed based on the assumption of Russia being a key supplier of natural gas.

This group also noted that Greece, based on the new European energy plan, stands to become a main gateway for natural gas to the wider region and, as a result, is favorably positioned for related gas infrastructure investments worth 10 billion euros, through the REPowerEU plan, prompted by Russia’s invasion of Ukraine.

 

Greece envisioned as gas supply solution in Europe, Balkans

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Greece is seen as a natural gas supply solution by Balkan and European countries, a Regional Task Force meeting in Sofia, staged within the framework of the EU Energy Platform –  formed to help establish common natural gas and hydrogen markets – has made apparent.

The Sofia meetings agenda focused on the search of natural gas supply solutions given an anticipated demand increase in Europe, including the continent’s southeast, Mihalis Thomadakis, Director of Strategy and Management at gas grid operator DESFA, who participated in the Sofia meeting, has told an ensuing industry event, Athens Energy Dialogues.

He was a member of the Greek delegation in Sofia led by Nektaria Karakatsani, an energy ministry expert on energy policy matters.

Delegations representing Ukraine, Bulgaria, Romania, Croatia and Moldova also took part at the Regional Task Force meeting in Sofia.

Thomadakis, the DESFA official, underlined that gas network upgrades need to be developed as quickly as possible in order to meet new needs emerging.

Besides the EU Energy Platform, established in April as part of Europe’s plan for a swift end to its reliance on Russian natural gas, the European Commission, in collaboration with the International Energy Agency, has also formed the Technical Support Instrument, a project already involving seventeen EU member states, for the same purpose.

The TSI project is promoting energy source diversification and transmission, biomethane production, international hydrogen trade, roof-mounted solar energy installations, energy efficiency measures, swifter RES licensing procedures, innovative hydrogen solutions, as well as RES projects for the industrial sector.

 

Kavala UGS ‘pointless without €420m network investments’

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Maria Rita Galli, CEO DESFA

Interview to Thodoris Panagoulis, Energypress.gr

  1. Ms. Galli, I sought this interview in light of the public statements that were made last week on the issue of the conditions for the creation of an underground gas storage facility in South Kavala. But before I ask you about this, tell me how the gas system responded to the recent big test due to the bad weather system “Elpis”.

Last week, the extremely unfavorable weather conditions caused a peak in gas demand, putting the gas network in extremely demanding operating conditions, very close to the system’s maximum capacity. From Monday 24th to Wednesday 26th, the daily gas demand reached a peak of 317 GWh, with historic record high hourly gas consumption of 17 GWh reached on Wednesday evening (26/1, 19.00-20.00). The gas demand was served by LNG from the Revithoussa Terminal and by pipeline gas from the northern entry points (Sidirokastro and TAP at N. Messimvria), with no flows from the Kipi entry point. In January, the LNG terminal received a record number of 8 cargoes unloading, of which one on last Monday in the middle of the snow storm. In these circumstances, DESFA’s personnel made a continuous and huge effort and, even throughout the snowstorm and abnormal cold spell, the successful uninterrupted operation of the System was ensured in its totality. And this, thanks to the reliability of our systems and the quality and dedication of our people.

  1. Let us now come to the controversial issue: The president of RAE stated, very harshly, that DESFA as TSO, presented to the Regulator a study with which he considers as necessary for the operation of UGS of N. Kavala, projects in the gas network of total worth of 1 billion Euros and that this cannot be done because the Greek consumer will be overburdened. Are these investments of accompanying projects of 1 billion euros really necessary to operate, when constructed, the UGS of Kavala?

Last week we read many declarations and comments – some of them quite inaccurate – close to a public debate, on the results of the study requested by the Regulator and performed by DESFA as TSO, on the investments needed in the natural gas network to ensure the operation of the planned South Kavala Underground Gas Storage. Even if this topic is very technical and based on complex analysis and simulations, carried out by DESFA and third-party experts and engineers, Ι will try to explain it as simply as possible and provide some factual information.

In September 2020, DESFA was requested by RAE, to elaborate a study – submitted in November 2020, more than one year ago – identifying the investments that would be necessary to accommodate all the requests for capacity access from the ongoing and planned projects, in accordance with state of the art technical and commercial solutions and applicable legal and regulatory framework. During our subsequent interactions with the Regulator, DESFA did not receive any negative comment or remark either on the constraints identified by the study or on the projects, which would be required for the removal of these constraints.

In March 2021, RAE requested DESFA, to carry out a Cost Benefit Analysis (CBA) for these investments, to assess which of them would be beneficial to be implemented as part of the NNGS development. Later, DESFA was requested to carry out an integrated CBA, which would include the Underground Gas Storage itself, as well as the investments in the NNGS which would be necessary exclusively for the operation of the UGS. Such network investments have been estimated in c.a. €420 million, an amount far below the alleged €1bn reported in the press. The CBA, conducted by a highly reputable independent international expert, was presented to the Ministry of Energy, RAE and HRADF in November 2021 and was submitted to RAE in January 2022, confirming that the benefits generated by the UGS, namely by the reduction of price volatility associated to seasonal demand and the security of supply – as quite evident from what has been happening in the EU market in the last months – largely exceeds the costs of the UGS project and the associated network enhancements.

  1. So you say that the required projects, based on the base-case scenario, are 420 million Euros. If these projects are not done, can the warehouse be operational? Does it make sense for an investor to enter the process if these projects are not done? It has also been expressed that no project is required…

To put it simply, the UGS in South Kavala, without these upgrades, cannot have access to the natural gas system, either as a whole or partially. Let me explain this further: currently the total maximum daily flow capacity of the Greek System amounts to c.a. 32 Mcm/day, with individual lower capacity caps on the East to West line from Kipi to Karperi and of the North to South line and vice versa. After the completion of the two compressor stations under construction (Kipoi & Ampelia), the total capacity of the system will reach 40 Mcm/d, with an increase primarily of the North – South capacity and vice versa. However, even after the addition of the new compressor stations, the capacity of the West-to-East branch of the system, which is constrained by the 24” diameter of the pipeline and is fully contracted to existing and ongoing entry and consumption points, will not allow to safely transport more gas in the specific branch. The UGS in South Kavala will be exactly on this branch.

The UGS – according to the information provided by HRADF – requires a system capacity upgrade in order for it to be able to serve all Entry and Exit points of the NGTS at an injection rate of gas into the storage of 7Mcm/d and a withdrawal rate of 9 Mcm/d, that is the amount of gas that in one day can be extracted from the storage to be used to serve the market. To comprehend the dimension, 9 Mcm/d equal approximately to the daily import of Russian natural gas from Bulgaria. It is important to understand that the access to the injection and withdrawal capacity of the storage needs to be guaranteed on a firm basis, otherwise its operation cannot be ensured, and no importer, trader or customer will have an interest to pay for such capacity and to store gas, without having the certainty of extracting such gas whenever needed and delivering it to the consumption points anywhere in the country. Assume you are a gas supplier, have booked and paid for the space in the storage, purchased the gas in summer, transported it and stored it in the storage, and when the winter cold spell comes and the prices are sky-rocketing, we tell you that you cannot take your gas and transport it when it is needed in the market…. In other words, without firm available capacity allocated to it, the UGS in South Kavala will have very limited value for the users and therefore the market as a whole. With no upgrade projects, there is no guaranteed access to the NNGS and vice versa.

  1. How are the projects that DESFA considers necessary for UGS related to the state of the rest of the gas transmission system, based on the role that natural gas now plays in the country’s energy balance, the quantities that are circulating and the new infrastructure that is being prepared?

The Greek natural gas market recorded a significant growth over the last seven years, with gas demand almost doubled from 2014 to 2021, reaching the historical high of 6.74 bcm in 2021, while further significant growth is expected, driven by new gas fired generation replacing lignite plants, new distribution areas and the role of Greece as an entry door of the wider Balkan and SEE Gas Market. Consequently, the peak daily gas flow is expected to reach c.a. 45Million cm/day in 2030, which exceeds the 40 Million cm/day of the NGTS, after the ongoing compressor stations enhancements.

To support such growth, many new import and export infrastructures have been planned to connect with the natural gas system, some completed, such as TAP, some under construction, as IGB and the Alexandroupolis FSRU, which took the FID few days ago, and the planned projects of the Dioriga Gas FSRU, the Greece-North Macedonia Interconnector, and the South Kavala Underground Gas Storage. These projects require the capacity of DESFA system to be enhanced to ensure that the associated gas imports can flow to the consumption points in the country and export points to neighboring nations. Enhancement projects are already ongoing as part of DESFA TYDP, which nevertheless are not sufficient to satisfy all the requests received. The existing and expansion capacity of the NGTS, resulting from the NGGS ongoing upgrade projects has already been fully contracted to the new import and export projects, as well as the new gas fired power plants under development. At the same time, two large scale projects that will drive Greece’s energy transition, the pipelines in West Macedonia and West Greece, are under way. The underground gas storage comes after these projects and requires new capacity, in order to operate properly, as described above.

  1. I would like you to comment on the fact that DESFA is on the one hand the Administrator of the national system (and also has the responsibility for its proper operation, security of supply, etc.), but also a shareholder of FSRU of Alexandroupolis, and a potential investor in YAFA Kavala. Are his proposals as an Operator influenced by his investment activities?

Not at all! As the Operator of the NNGS, we have very specific obligations for the integrity of the NNGS, but also the security of the supply of the country with natural gas. The performance of these obligations, under the control of RAE, derive from Greek and European legislation, but also directly affect the reputation of DESFA and its shareholders. The operational safety of the NNGS is our absolute goal, which, in all our years of operation, we have accomplished with adequacy and professionalism. In this capacity, we would never commit access to a new infrastructure for which we could not guarantee its safe operation in conjunction with the safe operation of the NNGS.

The assessment of which network enhancements would be needed to accommodate the operations of the storage came from the Regulator and have been delivered more than one year ago back in 2020. It is in the institutional role of the TSO to communicate to the market and the Regulator the necessary network developments, which are subject to public consultation. Eventually, one should be asking why this assessment was not requested before the launch of the South Kavala tender, but only after it was officially launched. We believe that any investors in the USG, and ultimately the Greek consumers, who are going to benefit or not from this investment, would require the assurance that the investments can operate before committing to it.

Therefore, indeed, also as potential bidder to the HRADF competition, we would like UGS in South Kavala to have unhindered access to the NNGS, in order to take the commitment to invest in the project.

I would like to emphasize that the role of DESFA. as the Operator of the National Natural Gas System is fully compatible with being a candidate investor in another natural gas infrastructure, which by the way will be fully regulated. This is a common feature of the European gas market, where the TSOs are also operators of the underground gas storages, as it is the case of our three TSO shareholders, Snam – which is the largest EU Gas storage operator, Enagas and Fluxys. Let us not forget that this is exactly what the Greek State demanded from the potential investors in DESFA privatization, that is to be operators of recognized prestige and experience, which could pass to DESFA their experience and know-how from more mature gas markets. What may be unprecedented in the Greek reality, i.e. an Operator being a potential investor in competitive tenders and private projects, is a regular case in the European energy scene. For example, all DESFA shareholders participate or are associated with companies involved in the management of underground storages and LNG infrastructure, in France, as well as in Germany, while in England and Portugal the respective Gas Transmission System Operators are also Operators of the respective electricity transmission systems.

Finally, our role as minority shareholder of the FSRU of Alexandroupolis, which we have concluded in December 2021, has no implications regarding our role as TSO, as well as potential participations in the USG Kavala. We have passed a very rigorous process of DG COMP, in order to enter the company and RAE has approved our entrance, recommending the unbundling between regulated and not regulated investments, which will be implemented in due time.

  1. Finally, I would like to ask you about the following: Do you have any comment on the “aggressive” tone during the recent public statement of the president of RAE. Prior to this placement, were you informed about RAE’s positions? Does the formal and institutional channel between the Regulator and the Administrator work?

It was something that no one from us expected and I cannot deny that we have been negatively surprised and disappointed, as our communication with RAE so far on this issue was absolutely smooth and cooperative, as well as with all the other issues in which we have a dialogue with RAE, which are currently quite a lot and very important for the energy market. It is noteworthy that inaccurate data were also given to the press, despite us having presented and explained the data in detail to RAE and had never received any indication that the Regulatory Authority had these kind of objections.

Let me say that it is not common practice, nor do we consider it correct, that the findings of a complex technical and economic study, are commented – with such negative statements – to the press before  any discussion with the Operator through the institutional channels of communication. In addition, some of the terms utilized wereparticularly offensive to DESFA, its employees and executives and we believe that it is not to anyone’s interest, and certainly not to DESFA’s, nor to the Regulator’s and the consumers’.

I would not wish to make an assessment of specific comments, but I would just like to highlight that a private company, such as DESFA, with its governance and shareholders with an international presence, will never engage in a useless large scale and long-term investment, no matter if regulated or not, as this would be finally detrimental to its economic interest and sustainable business model.

For our part, we remain, as always, open to engaging in a collaborative and constructive dialogue with market participants, institutions and the Regulatory Authority for Energy, and fully committed to continuing to perform successfully – with the highest know-how, skills and our commitment – the role of the gas transmission system operator for the benefit of consumers and the market.

EDA THESS general manager: Italgas arrival decisive in further network digitization, development of renewable gases

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The important role of natural gas for the promotion and success of energy transition was underlined by the General Manager of EDA THESS, Mr. Leonidas Bakouras, during his speech yesterday at the Renewable & Storage Forum organized by energypress (October 13-14).

The promotion and utilization of renewable gases, as well as the digitalization and sustainability of the networks were the main topics of his address. Mr. Bakouras stressed that natural gas is transforming through the necessary changes and adjustments in light of the green energy transition. In this context, he suggested that the recent undertaking of the Greek gas networks by Italgas will highly contribute – thanks to its advanced knowhow – to the further digitization of the networks and the development of renewable gases.

Renewable gases: The future of the distribution networks

Identifying the perspective of renewable gas integration (biomethane, SNG and hydrogen) in the energy mix of the next decades, EDA THESS is adjusting its networks to achieve energy transition, without however compromising energy security of its customers. As Mr. Bakouras mentioned, biomethane can replace more than 20% of the current natural gas demand.

In this context, EDA THESS has started performing research and studies revealing high potential for biogas and biomethane production in the areas of EDA THESS.

The existing wide geographic dispersion of the distribution networks, in conjunction with the deployment of new networks near agricultural waste production units, are favoring the sustainability of green networks. Another factor in the “equation” is the cost-effective connection of the injection points for the integration of renewable gases, that enhances circular economy and creates opportunities for the generation of additional income from waste recovery.

Network digitization 

A central pilar in the strategy of EDA THESS is the digitization of the networks. As a distribution network operator, the company has already taken important steps to this end, the General Manager of the Company said.

Among others, the digitalization of the networks allows for:

  • The introduction of new Participants, further enhancing the production of renewable gases
  • The monitoring and management of the gas mix quality for the optimal integration of renewable gases
  • The rapid transformation of the energy markets, upgrading the market and launching new products.

All this results in increased necessity for bilateral real-time information exchange. In this scope, EDA THESS is using smart sensors, smart meters and digital communication technologies.

EDA THESS: member of the European organization GD4S

Finally, the General Manager talked about the membership of EDA THESS in the powerful European organization “Gas Distributors for Sustainability” GD4S, where the Company is cooperating with the leading energy companies of Europe.

The President of the Organization is Paolo Gallo, CEO of Italgas, which is expected – as Mr Bakouras mentioned-  to highly contribute to the further digitization of the networks and the development of renewable gases after its recent introduction in the Greek market.

As for its membership in the international organization, EDA THESS promotes – both at the European and national level:

  • The strategic importance of the development of natural gas infrastructure as an activity harmonized with the taxonomy of sustainable investments
  • The crucial role of the distribution networks in energy transition
  • The establishment of the legislative and regulatory framework for the integration of renewable gases (biomethane, hydrogen) in the distribution networks.
  • The exchange of best practices and know-how

Mr. Bakouras also talked about the role of the Distribution Systems’ Operators. The priorities are the following:

  • Guaranteed stability of the distribution system
  • Cooperation between all the stakeholders of the system
  • Assurance of the gas mix quality
  • Application of technological innovations reducing the methane and pollutants’ emissions
  • Optimization of the networks’ capacity management

With regard to the company, EDA THESS serves more than 400 thousand consumers and distributes 5.1 million MWh annually. The strategic plans of the company include 8.8 million euro investments for the digital transformation of the company, rising the digital maturity index of its main business operations from 48% in 2020 to 75% in 2025.

 

DESFA 10-yr plan worth €830m includes Ioannina expansion

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Gas grid operator DESFA’s latest ten-year development program, revised annually and now uploaded onto its official website for public consultation, includes projects with a total budget of 830 million euros.

The program, covering 2022 to 2031, includes new projects worth 183 million euros, plus projects worth 647 million euros that were included in the previous ten-year plan, covering 2021 to 2030.

The 183 million-euro amount, designated for twelve new projects budgeted at 161 million euros, includes gas network expansions into new areas, the main project here being an extension into northwestern Greece’s Ioannina area from the west Macedonia region in northern Greece, a project worth 156 million euros.

A further 14.5 million euros is planned to be invested in improving, modernizing and maintaining the country’s gas grid.

 

Higher steel prices increase project costs in DESFA’s development plan

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Gas grid operator DESFA’s latest development plan, covering 2022 to 2030, includes project cost increases as a result of higher steel prices in international markets, sources have informed.

The plan, carrying national-grid upgrade, reinforcement and expansion projects, is expected to be forwarded to RAE, the Regulatory Authority for Energy, within October.

It will then undergo two rounds of public consultation procedures, the objective being for RAE to have approved the development plan by the end of the year.

 

DEPA: CNG, LNG supply in remote areas must be competition-based

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Gas company DEPA Commercial has objected to a RAE (Regulatory Authority for Energy) proposal calling for the development of distribution networks at remote areas for CNG and LNG supply, noting, in related public consultation, that such a move would not reflect international practices, according to which CNG and LNG compression and transportation activities are taken on by suppliers based on free market competition conditions and prospects.

The RAE proposal for CNG and LNG distribution networks covering supply in remote areas is extremely restrictive and does not allow for alternatives that would facilitate greater competition and reduced costs for consumers, DEPA Commercial contended.

Also, any decision to develop virtual pipeline networks in remote areas should serve as a temporary solution and ensure that the normal development of distribution networks is not undermined, DEPA Commercial noted.

Gas grid operator DESFA, in its contribution to the public consultation procedure, noted that if a virtual pipeline network is regarded as part of the national grid, then this would help boost social welfare, minimize any potential burden on existing gas consumers, and maximize the positive impact of natural gas penetration in Greece.

 

 

Gas network for west, expected in 2023, to be supplied LNG

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A natural gas network to cover western Greece’s provincial cities Patras, Agrinio and Pyrgos and scheduled for completion in 2023 will carry LNG to be transported from gas grid operator DESFA’s Revythoussa islet terminal close to Athens.

Regional authority Nekatrios Farmakis has just authorized the project’s entry into the Regional Operation Program (2014-2020) for Western Greece, an important step for this gas network’s development. Work on the project is expected to begin within 2021.

The project, being co-funded by the European Regional Development Fund (ERDF), is budgeted at 21.3 million euros. The gas network will seek to attract business, industrial as well as household consumers.

To be developed by gas distributor DEDA, the new network will run a total distance of approximately of 208 kilometers and be equipped with a metering and regulation station (M/R) for its supply to Patras.