Energie : papiers de recherche moissonnés (22/08/2018)

Let’s not exaggerate – Southern Gas Corridor prospects to 2030 / Simon Pirani. Oxford Institute for Energy Studies, July 2018, 30 p. (OIES Paper: NG 135) https://www.oxfordenergy.org/publications/lets-not-exaggerate-southern-gas-corridor-prospects-2030/

A new round of political activity to promote the Southern Gas Corridor from the Caspian to Europe has begun. In February, European energy ministers and supplier nation officials met in Baku. In June, first gas entered the Trans Anatolian Pipeline (TANAP) across Turkey, and the first substantial source of supply for the Southern Corridor, the Shah Deniz II project in Azerbaijan, started producing. Shah Deniz II will ramp up to peak output of 16 bcm/year by 2021-22. Europe will then receive around 10 bcm, no more than 2 per cent of its overall demand, via the Southern Corridor, compared to the 10-20 per cent that had been envisaged in Brussels. While political leaders continue to paint the corridor’s prospects in very bright colours, the market dynamics – in the Caspian region itself, in the Caucasus and Turkey, and in Europe – are less promising. Commercial conditions for the Southern Corridor’s success have deteriorated as political support for it has grown. This paper argues that, up to 2030, the corridor will most likely remain an insubstantial contributor to Europe’s gas balance. At best, there may be sufficient gas for a second string of TANAP, but only at the end of the 2020s. The paper considers the potential sources of supply for the Southern Corridor (Azerbaijan, Turkmenistan, and others including Iran, Kurdistan, and the East Mediterranean); demand and transport issues; and the conditions under which Southern Corridor gas will compete with other supply in the European market.

The Development of Natural Gas Demand in the Russian Electricity and Heat Sectors / Evgenia Vanadzina. Oxford Institute for Energy Studies, Aug. 2018, 55 p. https://www.oxfordenergy.org/publications/development-natural-gas-demand-russian-electricity-heat-sectors/

Natural gas supplies to Russia’s domestic market are about twice the size of supplies to its export markets. Most of the gas supplied to the domestic market is used for electricity and heat production, which account for about 50 per cent of domestic natural gas consumption – more than 200bcm annually. Natural gas demand in this sector is highly influenced by the economic situation in the country, fuel pricing policy, and energy policy and regulation. While the economic situation shapes electricity demand  (as most of this demand comes from industrial consumers), natural gas demand for electricity production is subject to inter-fuel competition between coal and natural gas, and inter-technology competition between nuclear and gas power plants. The latter is affected by capacity support mechanisms. The objective of the paper is to define the most important factors shaping natural gas demand in Russia’s electricity and heat sectors, to analyse the extent of their impact, and to reach  conclusions on  long-term natural gas demand for electricity and heat production up to 2035, taking different power demand and supply scenarios into consideration.

What to make of Saudi Arabia’s Recent Shift in its Output Policy? / Bassam Fattouh and Andreas Economou. Oxford Institute for Energy Studies, Aug. 2018, 8 p. (Oxford energy comment) https://www.oxfordenergy.org/publications/make-saudi-arabias-recent-shift-output-policy/

After a sharp rise in April/May this year, which saw Brent trading at above $80/barrel for several days, the upward pressure on the oil price eased in July with the Brent structure flipping into contango. This may have come as a surprise to many analysts who were expecting oil prices to continue on their upward trajectory. Because, after all, with OECD stocks falling below the five-year average, spare capacity at very thin levels, oil demand still growing robustly, production in Venezuela continuing its decline, supply losses from Iran projected to exceed 1 million b/d, and general deterioration of the geopolitical backdrop, surely the Brent price should have broken the $80/barrel ceiling? Instead, the oil price has held in the $70-$75/barrel range for most of July and into August 2018. While fears of trade wars and growing concerns about the health of emerging markets have impacted sentiment, it is the recent shift in OPEC, and particularly its dominant player Saudi Arabia’s, output policy which has had the biggest impact on physical balances, prices and the term structure to date. This reflects in part changing market fundamentals and a more uncertain environment, but also changes in the weight attached to the various objectives pursued by the Kingdom. This comment examines the causes of the most recent shift in Saudi oil policy, its adjustment in output in July, and the implications of recent behaviour on its signaling power.

Applying Blockchain Technology to Electric Power Systems / David Livingston, Varun Sivaram, Madison Freeman, and Maximilian Fiege. Council on Foreign Relations Greenberg Center for Geoeconomic Studies and Energy Security and Climate Change Program, 26 July 2018, 37 p. https://www.cfr.org/report/applying-blockchain-technology-electric-power-systems

Policymakers should endeavor to understand blockchain technology, support the development of blockchain standards in the electricity sector, and allow innovation to flourish by setting up regulatory sandboxes that permit demonstration projects…

Danièle Revel

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