GTS presents draft Investment Plan 2020

Production from the Groningen field has been significantly reduced from some 53 bcm in 2013 to 9.3 bcm in the upcoming gas year. This is mainly the result of maximum utilisation of existing nitrogen installations and the construction of new ones. Furthermore, on-schedule completion of Zuidbroek II in April 2022 will eliminate the need for the production of gas from the Groningen field in an average gas year. In order to facilitate the phase-out of gas production from the Groningen field, additional gas will need to be imported from abroad. In order to supply these additional volumes from Germany, transmission capacity in Germany will need to be expanded. Existing gas storage facilities will also remain necessary in order to ensure a well-functioning gas market and guarantee security of supply. These are the main conclusions of GTS’ draft Investment Plan 2020. 

The network operator’s Investment Plan 2020presents all of the planned expansion and replacement investments needed to keep GTS’ national gas grid in good condition and anticipate developments in the gas market, such as the phase-out of gas production in Groningen. The transmission network can furthermore help accelerate the energy transition.   

Over the next ten years, GTS’ annual level of investment will drop from €300m in 2020 to around €100m from 2024. Investments, such as the construction of a nitrogen installation and the conversion of industrial large-scale consumers, are required at the beginning of the present decade to compensate for decreasing production in Groningen.  

Bart Jan Hoevers, GTS’ CEO: ‘The planned expansion and replacement investments will enable us to continue to transport the natural gas supply wherever it is needed in our grid, while also maintaining the TTF’s liquidity. The sound operation of the TTF and the gas market facilitate reliable gas pricing, thereby creating an affordable energy supply for the Netherlands. Our network furthermore empowers us to make an essential contribution to the reliability and affordability of the energy transition, as natural gas will continue to play a crucial role in the energy mix this decade and the use of hydrogen and green gas will gradually increase.’ 

The phase-out of gas production in Groningen will require additional gas imports, since the domestic demand will not reduce significantly over the coming years. The international supply of gas is sufficient, but there is a real risk of the required volumes not being able to reach the Dutch system. Measures of the physical gas flow on the various import points from Germany have shown that the maximum available capacity is already being approached on the German side, and sometimes even exceeded. GTS has therefore submitted a request for additional transmission capacity to the German network operators. The measures this requires need to be included in the German network development plan.  

As well as helping to maintain security of supply, the gas storage facilities in the Netherlands play a role in TTF liquidity. The existing low-calorific gas storage facilities are becoming increasingly important in compensating for the rapid decrease in production from Groningen. According to the Investment Plan, over 55% of the current capacity, including Norg, will still be needed up to 2030, while high-calorific gas storage facilities are also required to create flexibility in the system.