Implications of diversification strategies in the European natural gas market for the German energy system

Abstract

The energy system is facing changes across Europe, motivated by CO2 emission reduction targets and driven by the expansion of renewable energy sources (RES). Germany is carrying out efforts to reshape its future energy system to be mainly based on RES. Nonetheless, flexible generation capacities like natural gas (NG) power plants will still be needed in the coming decades. Recent developments in the NG market have been characterised by uncertainties on the supply side as plans have been put forth for new pipelines to facilitate Russian or Caspian NG towards Europe as well as increasing volumes of liquefied natural gas entering the market. This paper aims to show the interdependence between infrastructure developments and primary NG demand in the German energy system. The authors analyse impacts for the German ‘Energiewende’ on a time horizon from 2010 to 2050. Coupling a European NG model with a German energy system model, we develop six scenarios regarding climate policy in Germany and European diversification strategies in infrastructure expansion. The results show, that NG prices influence sectoral changes especially in the residential sector. Further strategies to reduce CO2 emissions in the entire energy system should also consider NG as part of the solution.