Keeping the gas ‘on tap’: what’s our role in the security of supply?

For decades, most of the natural gas we use in the Netherlands came from the Groningen field. Today that’s different. Because gas production is being phased out in Groningen, in the Netherlands we now mainly use natural gas imported from abroad. This makes security of supply a more complicated issue, especially in light of the political desire to end the import of Russian gas over the coming years. In light of this, how do we ensure the security of supply, that the gas keeps flowing? And what is Gasunie’s role in this? We give the floor to Britta van Boven, Commerce & Regulation Manager at Gasunie.

‘Let me first explain what Gasunie is actually responsible for. Or to be more specific, GTS – Gasunie Transport Services – one of Gasunie’s subsidiaries. GTS is the national transmission system operator for the high-pressure transport of natural gas. This is a statutory duty that we perform independently, while under the supervision of the Netherlands Authority for Consumers and Markets. Gasunie does not extract natural gas itself, and it’s not allowed to trade in gas either: that’s the reserve of the commercial companies.’

‘Security of supply – in other words that gas is always “on tap” – is the responsibility of the Minister of Economic Affairs and Climate Policy. The Minister has passed on some of this responsibility to us, including transport security. What this means is that GTS must ensure that our transport network has sufficient capacity to handle all the natural gas supplied. In other words, we make sure the highways are wide enough, but we don’t own the cars that drive on them. We are also obliged to reserve a certain volume of natural gas for homes for when there’s a cold snap.’

‘We also have an advisory role with regard to gas extraction in Groningen. At least once a year we advise the Minister on how much production from the Groningen field will be needed to ensure security of supply. We always first look at all other options for meeting demand and only then at the Groningen field. From that calculation it then follows how much Groningen gas will likely be needed to make up the difference. The State Secretary for the Extractive Industries ultimately decides how much gas may actually be produced. In addition to our advice, the Minister also receives advice on safety and feasibility.’

‘Every two years we also make an investment plan where we use various scenarios to look further ahead at the market and the infrastructure needed to serve the market. How much natural gas is the Netherlands likely to use? What other sources are available? What steps do we need to take to arrange that? We often provide advice – on request and proactively on our own initiative – in other areas too. We simply have a good overall view of supply and demand and the technical expertise required to provide such advice. Moreover, since we are not a commercial party we are positioned above the market.’

‘Over the years we have gained a lot of expertise that we use to provide increasingly better advice. That said, the situation has changed in recent years. The Netherlands has suddenly switched from being an exporting country to an importing country. In this situation, you have to take into account many more factors to ensure security of supply. The low replenishment level in the gas storage facilities, the envisioned reduction in demand due to sustainability which does not materialise, a war… all these have a direct effect and that makes it more difficult to predict the future.’

‘Whether we are an export country or import country, the idea has always been that the gas would continue to flow. With the Russian war in Ukraine, that changed overnight. The whole situation certainly makes ensuring security of supply more tense. However, that does not mean that gas will suddenly no longer be available. At the moment, there is nothing special going on in our grid. For next winter, however, the situation is uncertain. If this becomes a real crisis, the Gas Protection and Recovery Plan will come into effect, meaning the Minister will decide who will be shut down, starting with the sixty largest industrial consumers in the Netherlands. Private consumers (homes) and other protected customers like hospitals would be the very last to run out of gas.’

‘The chance of that happening is fortunately very slim. Meanwhile, Europe is busy preparing for the coming winter. For example, there is a proposal from the European Commission that would force all Member States to start implementing mandatory replenishment levels for gas storage. We are absolutely all for this. The problem is not with storage capacity: in the Netherlands, we can even store more gas than we need domestically. But you need to actually do so. Gasunie has no influence on this: replenishment is completely up to the market parties. However, our advice is clear: as far as we are concerned, the Dutch gas storage facilities should be replenished to 100 percent capacity. Only in this way can the Netherlands be optimally prepared to face a natural gas shortage and security of supply be assured.’