Borbála Takácsné Tóth & Peter Kotek

REKK

National Energy and Climate Plans in

the Danube Region

Online workshop

May 6, 2021 10:00 - 12:00 a.m.

NECPS OF DANUBE REGION COUNTRIES -

NATURAL GAS MARKETS

DR countries gas markets are very diverse

Fuel mix of the total primary energy supply in the Danube Region and in the EU28 (2018)

Source: Eurostat

Altogether a 170 bcm/yr gas market

BG; 3.1

HR; 2.7

HU; 9.9RO; 11.9

RS; 2.6

BA; 0.2

CZ; 8.2

DE; 88.0AT; 8.8

SI; 0.9

SK; 4.9

MD; 1.0UA; 30.7

0%

5%

10%

15%

20%

25%

30%

35%

40%

0% 20% 40% 60% 80% 100% 120%

Shar

e o

f ga

s in

en

ergy

mix

Import dependency

High import dependence

Addiction to

gas

Share of gas in the energy mix and gas import dependence by country, 2018

HU, MD,

DE, SK

Source: Eurostat

Sectoral distribution also varies

29% 32%20% 24% 25% 23%

31%17% 16%

25%42%

30% 33% 30% 26%

9%

11%

6%

13%

8% 15%

6% 11%

7%

37%

34%

30%27%

17%

17%

23% 64%22% 44% 8%

29%

11% 21% 24%

8%

6%

23%7%

44%45%

29%48%

34%

18%

39%30%

42%

18%

36%38% 41%

5% 7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

AT BG CZ DE HR HU RO SI SK BA MD ME RS UA EU28 DR

Electricity & heat Energy sector Non-energy use

Industry Transport Households & services

Other

Source: Eurostat

Structure of gas consumption by sectors in the Danube Region (2018)

Energy sector natural gas consumption &

decarbonization

44% 49% 42%

15% 14%

33% 35%

14%

84%

65%77%

29% 23%

42%

23%

7%6%

14%

30% 23%

24%

10%

91%

8%

18%18%

14%

62%10%

7%22% 53%

11%

19%

17%

14%

15%7%

35%

11%

21%

15%

37% 34%

16%

49%

22%

44%59%

46%32%

24%

0%

20%

40%

60%

80%

100%

AT BG CZ DE HR HU RO SI SK BA MD ME RS UA EU28 DR

Solid fossil fuels Manufactured gases

Natural gas Oil and petroleum products

Renewables and biofuels Non-renewable waste

Nuclear heat

Electricity production and district heating

AT BG CZ DE HR HU RO SI SK BA MD ME RS UA

Coal phase out

District heating

switch to gas

District heating

switch to RES-H

Fuel mix of the electricity and heat generation

in the Danube Region and in the EU28 (2018)

Room for coal to gas switch

Measures related to fuel switch in the energy

sector

• Coal phase out dates are rarely set

• Gas based CHPs replace existing solid or liquid fossil

fuel based units

• RES based units replace retiring gas based CHPs

Source: Eurostat Source: NECPs, Strategies

Industry: few concrete measures

8% 13% 6% 6% 9% 9%18%

10% 11%20%

5% 9%

12%

13% 11%

5%

36% 33%30%

34%32% 32%

35%34%

24% 10%

28% 26%

17%

32%31%

15% 6% 25%

16%

15%

8%8% 14% 16%

45%

15% 10%5%

16%9%

7%5%

11%6%

7% 9% 5%

32% 31%31% 35%

27%33%

29%42%

30%43%

27%

47% 31%

27%

34% 33%

8% 8% 6% 8%19%

9%22%

6% 9%

0%

20%

40%

60%

80%

100%

AT BG CZ DE HR HU RO SI SK BA MD ME RS UA EU28 DR

Solid fossil fuels Manufactured gasesNatural gas Oil and petroleum productsRenewables and biofuels Non-renewable wasteNuclear heat ElectricityHeat

▪ Some countries refer to goals without any

specific measures, especially those with huge

potential to decrease energy intensity (e.g.

Ukraine, Moldova).

▪ Industrial gas consumption is less impacted by

measures and volume shifts to date, as the full

decarbonisation plans need further

technological development. (pace of industrial

process innovation, availability of low-cost zero

carbon electricity and hydrogen, price evolution

of carbon capture, storage)

Final energy consumption of the Industry

sector in the DR and in the EU28, %, 2018

Source: Eurostat

Households: gas in gas out

8% 6% 6%

18% 5%

29% 39%

21%

50%34%

9%

48%

21% 11%

45%34% 34%

12%

16%

5%

13%

10% 13%25%

29%

21%

11%

35%

18%32%

32% 54%

46%

42%23%

9% 14% 15%

29%48%

26%27% 34% 22% 19%

38% 31%

29% 15%53%

43%23%

32% 26%

16% 13% 15%6% 8% 10% 8% 15%

6% 10%

14% 18%7% 10%

0%

20%

40%

60%

80%

100%

AT BG CZ DE HR HU RO SI SK BA MD ME RS UA EU28 DR

Solid fossil fuels Natural gas

Oil and petroleum products Renewables and biofuels

Non-renewable waste Electricity

Heat

Household measures AT BG CZ DE HR HU RO SI SK BA MD ME RS UA

Energy efficiency

targeting gas use

Phasing out oil/old (coal)

burning furnaces

Support for switch to

(efficient) gas heating

Existing gas change to

RES

Support RES in

household

Source: Eurostat

Fuel mix of the househols and service sectors

in the DR and in the EU28 (2018)

Room for biomass to gas switch

• Gas is difficult to phase out once it is

established – lock in: limiting connection to

gas, decomissioning of underutilized DSO

grids

• Still plans to build DSO gas grids in non-EU

countries

• General support for RES

Measures related toHH and services

Impact of measures on gas consumption

results in ~ 3% drop by 2030

Change in gas consumption in the Danube Region 2020-2030 (bcm/yr)

Source: NECPs and, national strategy documents. The changes refer to the difference

between 2020 WEM and 2030 WAM projections

To serve the stagnating demand a lot of

plansNORD STREAM 1-22023

TAP2020

TURKSTREAM 1-22022

KRK LNG2021

BALKAN STREAM2022

AT-SI-HR

HU-SK

BRUA 1

PL-SK

LNG DE

RO-MD

BA-HRBG-RS

InfrastructureAT

BG

CZ

DE

HR

HU

RO

SISK

BA

MD

MERS

UA

Storage

LNG

distribution system

development

distribution system

decommissioning

transmission system

upgrade to H2

Disclaimer: This map serves for illustration purposes. Not all

projects mentioned in the NECPs and strategies are included.

Bold lines indicate the large transmission projects of outside

suppliers. Arrows indicate that existing pipeline has capacity

extension or reverse flow. Cross border projects within region

are depicted only when both countries explicitly mention the

importance of the project in the NECP. Source: NECPs and

national strategy documents.

Measures related gas infrastructure

75% of capacity extension is planned in

countries with decreasing consumptionEntry 2019 Entry ENTSOG

FID

NECP Growth

according to

NECP

NECP

GWh/d GWh/d GWh/d % Million EUR

AT 2126 0 167 8% 100

BG 1405 1222 626 45% 1941

CZ 1807 2238 2593 143% 805

DE1 7413 4287 4442 60% 6900

HR 132 272 1587 1202% 1382

HU 811 151 1900 234% 277

RO 1174 42 672 57% 2343

SI 149 0 165 111% 0

SK 3490 1505 1851 53% 529

BA 18 0 154 857% 101

ME2 94 42 42 45% 0

MD3 0 0 17 0

RS4 142 415 759 535% 164

UA 9335 29 376 4% 190

TOTAL 28094 10203 15348 14732

11

FINDINGS

▪ No clear vision of how to

decarbonize any of the

sectors with significant

shares of natural gas

▪ No clear vision on the

future of gas – BUT no

doubt that it will play a

significant role in the next

decades

▪ Production of declining

domestic resources is

rapidly maximized

RECOMMENDATIONS

▪ Do not provide subsidies to fossil fuels and those in

operation should be phased out

▪ Do not invest in future stranded assets! Introducing

natural gas to new markets should not be supported. Gas

can be a bridging fuel where the infrastructure already

exists, but in not yet gasified markets renewable solutions

should be the way forward.

▪ Provide decarbonized alternative heating at affordable

prices for low-income consumers

▪ Energy efficiency and building renovation plans must be

supported through training and education of skilled

workers and by setting up reliable and independent

advisory service transparently

Findings and policy recommendations

11

Thank you for your attention!

Disclaimer: Opinions expressed in this presentation are those of the authors. They do not

necessarily represent REKK’s or the Danube Region Strategy’s views.

For questions feel free to contact: Borbála Takácsné Tóth and Peter Kotek

Borbala.toth@rekk.hu and peter.kotek@rekk.hu

www.rekk.hu

Points for discussion

▪ Contradiction: Pipeline investment in markets with decreasing gas consumption

▪ Energy sector has coal to gas switch potential – will it happen, what are the barriers?

▪ Household sector: is it worth to invest in gas for a household consumer from an economic

perspective? From a decarbonization perspective? Is there a difference between newly gasified and

mature countries? What can be done to avoid lock ins?