24 January, 2019

Growing collaboration on the European energy market

A new pipeline, facilitating the supply of Norwegian gas through Denmark to Poland and other countries in the region, marks a further step forward in the increasing integration of the European energy market.

Energinet in Denmark has entered into an agreement with its Polish counterpart, Gaz-System, to invest in the Baltic Pipe project. Baltic Pipe runs from the North Sea, from Norway via Denmark to Poland and is expected to be operational by 2022.

“Baltic Pipe as a prime example of how the European gas market is becoming increasingly integrated and how cross-border collaboration is gaining in importance. There’s a clear ambition on the part of the EU to integrate the electricity and gas markets in an effort to improve security of supply in Europe and to offer alternatives to oil and coal. The gas can also be used to complement and stabilise the electricity supply system, with a growing proportion of intermittent renewable energy such as solar power and wind power,” said Johan Zettergren, Swedegas chief executive.

“Baltic Pipe is contributing to the fulfilment of European climate objectives through reduced emissions. The new infrastructure will also become a key part of an integrated European energy market,” said Thomas Egebo, President and CEO of Energinet.

This move will, for example, increase the potential for Poland to make the switch from coal to natural gas, contributing to reduced carbon emissions and significantly lower emissions of sulphur, nitrogen, particles and heavy metals. Energinet also estimates that Baltic Pipe will help reduce gas distribution costs.

A further advantage for gas customers presented by Baltic Pipe is that the link between Denmark and Norway could be established as early as January 2022. This is highly fortuitous as it would take place when what is traditionally a major supply source for Denmark and Sweden – the Tyra platform in the North Sea – is scheduled for an overhaul and will be out of commission.

In Sweden, Swedegas is collaborating with Energinet on yet another project – Joint Balancing Zone – with the aim of creating a joint balancing zone for gas in Sweden and Denmark and to increase security of supply and competition on the gas market. Denmark produces a great deal of biogas, which would be simpler to trade using the system. The proportion of biogas currently traded through Swedegas systems stands at over 20 per cent and is growing steadily.

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