German expert explained why Russian gas supplies to EU will keep growing
The leading specialist of “Verbundnetz Gas AG” (FRG) Jӧrg Lewetz gave a lecture “Current challenges of German and global energy policies” in Saint-Petersburg. Forpost asked the expert why Russian natural gas supplies to Europe keep growing for the third year in a row and if this tendency holds when wind mills and solar arrays will display hydrocarbons from German power balance.
During the last three years gas supplies to FRG from Russia keep growing, though not long ago a number of German experts predicted the reverse trend, declaring the necessity of energy resources’ diversification. Why does it go on and what position does “Verbundnetz Gas AG” hold in the German market?
Over the last years, Germany consumes more natural gas for power generation. One of the reasons for such state of affairs is a gradual decrease in nuclear power generation due to the accident at Chernobyl nuclear power plant and, especially, the Fukushima accident. In four years we plan to abandon nuclear power completely .
However, import form Russia is growing not only because we shutter nuclear facilities. The thing is that other European suppliers are unable to fully meet the needs of Germany. Russia, on the contrary, is ready to fill this gap. At present your country supplies about 40 % of the total amount of natural gas consumed in our country. “ Verbundnetz Gas AG ” holds the third place among its importers.
What countries besides Russia export natural gas to Germany?
First of all this is Norway which holds the second position. Holland follows it. All other suppliers play a marginal role. The problem here is that the presence of the Netherlands in the German market is now declining and it will be rather difficult for the Dutch to reverse the trend due to internal geological challenges and the decrease of production.
There is an idea that after 2020 gas production in Norway will also start to decline. I’ve heard that it will be quite substantial. Doyouagreewiththisopinion?
Word abouta possible reduction of deliveries from Norway and that the production in this country has allegedly hit the ceiling began many years ago.Nevertheless, Norway has not reduced export of gas to EU countries. We think that in the coming years it will remain at its current level. In regard to the Russian position, it will improve due to the reduction of supply from Holland and the growth of inner gas consumption in Europe.
The majority of Russians are sure that nowadays the USA hampers the construction of “Nord Stream-2” solely for the reason that they plan to enter the European energy market with their own LNG. But, if additional volumes of less costly gas from Russia will be delivered, then to carry this plan out will be rather difficult. Do you share this idea and do you think the construction of “Nord Stream-2” will be completed?
I hope that in the course of time common sense will prevail. It’s a commercial project profitable both for Russia and European countries. That is why I hope that all political hurdles to prevent its implementation will not succeed. “ Nord Stream-2” must be constructed.
What are the prospects for gas demand in Germany in the long term? When will the renewables take on it?
The share of renewable sources of energy keeps growing in the German market. At present about 30% of power in our country is exactly the renewable energy. I believe that in the near future RES in combination with natural gas will be able to meet the requirements of German consumers in power.
Definitely this challenge may not be solved merely by means of windmills and solar arrays due to the immaturity of storage techniques and incapacity of RES to generate power during periods of peak demand. For this very reason our understanding is that the future of our energy balance is in intermixture of “green energy” and natural gas. As a matter of fact, gas may be used to offset any energy shortfall in case we will run short of power generated from RES. Advantages of gas are indisputable, this is a reliable resource. And we should use it to achieve the stated climate targets.