Shippers’

Meeting
2019
Agenda
09:30 COMMERCIAL NEWS
Introduction by Pierre Cotin
 European regulation process overview
 Upstream offer
 ATRT7 propositions
 Downstream offer: wrap-up of all changes ahead
 2018: gas grid overview
 ENEA study: strengthening the competitiveness of the French
biomethane sector
12:00 LUNCH
01:45 TRF NEWS
 2018/2019 Winter feedbacks
 TRF continuous training
 Next summer 2019
 Evolutions and propositions
03:00 WORKSHOPS
04:15 AFTERNOON SNACK & NETWORKING

GRTgaz │ Shippers’ Meeting – March 14, 2019 2

European regulation
process overview

Shippers’ Meeting - March 14, 2019

European regulation:
the gas future is being built now
ENTSOG works GRTgaz is
strongly
 2019/2020 auction calendar
involved in
 Functionality Platform
Paris as well as
 Tariff Network Code in Brussels

ENTSOG/GIE task force about Guarantees of Origin

Clean Energy Package

Gas Package 2020: European Commission study status update

GRTgaz │ Shippers’ Meeting – March 14, 2019 4

 ENTSOG works
Functionality platform www.gasncfunc.eu

No Description Outcome Step date

• Approval of the issue solution
document
Communication protocol
I. • Board approval January 2019
encryption
• Publication of the solution after
the board approval
• Approval of the issue solution
II. Gas role model End December
document
• Preparation of the issue solution
Fallback solution for failed DA
III. document End December
auctions
• Publication of the solution

• ACER is preparing a note on this

topic – listing possible options of
the solution
IV. INT NC on IPs 3rd Beginning 2019
• Some arguments could be
considered as part of the issue
solution

• Suggestion: Joint ACER TF and

Inconsistencies in publication of
V. ENTSOG TAR KG meeting in March 2019
reserve price information
early March tbc
GRTgaz │ Shippers’ Meeting – March 14, 2019 5
ENTSOG works
Tariff Network Code:
ACER’s monitoring on tariff methodology

GRTgaz │ Shippers’ Meeting – March 14, 2019 6

ENTSOG/GIE Task Force
Issues under discussion
 The Guarantees of Origin should:
 support sector coupling for electricity, heat and cooling
 be exchangeable/interlinked
 clarify their conversion for electricity and gas

 The Guarantees of Origin shall be:

 tradable cross-border
 lifetime extended. This is not rational to limit it as gas can be stored.
 able to replace / be compatible with ETS allowance

 State members shall use their optional right to put in place

Guarantee of Origin for non-renewable low-carbon gas:
 minimized side-effects
 increase of traceability by providing as much information as possible

 Differentiation of Guarantees of Origin:

 “gaseous” gas should be exchangeable/equivalent to a GO of LNG
 mass product approach VS market segmentation approach
GRTgaz │ Shippers’ Meeting – March 14, 2019 7
ENTSOG/GIE Task Force
Next steps

Mid-March – Revised note taking into account Prime Movers

views and provisional recommendations

Early April – 2nd Prime Movers meeting

Late April / Early May – Open stakeholder workshop

Late May – Recommendations and propositions for the Forum of

Madrid

GIE and ENTSOG report back to the 32nd meeting of the Forum
of Madrid on June 5-6, 2019

GRTgaz │ Shippers’ Meeting – March 14, 2019 8

Clean Energy Package
State of play
An interinstitutional agreement has been reached
(December 18th, 2018) for these texts:
 ACER Regulation
 Electricity Directive recast
 partly transposition into national law by MS required by December
31, 2020, art. 70
 previous directive repealed on January 1st, 2021 (just after
transposition)
 Electricity Regulation recast
⇒ publication and coming into force estimated in 4 – 8 months

Texts already published in the EU Official Journal

(December 21st, 2018):
 Directive 2018/2001 on the promotion of the use of renewable
energy (“RED II”)
 Directive 2018/2002 (Energy Efficiency Directive)
 Regulation 2018/1999 (Energy Governance Regulation)
GRTgaz │ Shippers’ Meeting – March 14, 2019 9
The scope of the European
Commission 2020 Gas Package
3 main pillars of the package

GRTgaz │ Shippers’ Meeting – March 14, 2019 10

 The scope of the EC 2020 Gas Package
Ongoing and upcoming studies

1. ENTSOs’
The role of gas infra in 2050 CEER follow up Future 1. Costs of gas
(final) interlinkage Role of gas study (final) disruption (ongoing)
2. Sector coupling study between 2. Value of lost load
3. Combined gas and capacity electricity and MF 2018 follow up (final)
release programs gas scenarios tasks:
4. Distortive effects of non • Avoid unintended
harmonized tariffs interactions
5. Licensing and regulatory between the
requirements regulated and
6. Tailor made regulation contestable
7. Regulatory framework for activities – assess
LNG potential role of
8. Biogas and H2 injection into regulated entities
gas grids • Consider potential
9. Methane leakage prevention decommissioning of
strategies infrastructure
10. Reg. Support to Innovation &
SDES Study

GRTgaz │ Shippers’ Meeting – March 14, 2019 11

The scope of the EC 2020 Gas Package
Expected timeline

GRTgaz │ Shippers’ Meeting – March 14, 2019 12

Conclusion

Gas infrastructures: Guarantee of decarbonised energy system

sustainability

Positive externalities to be well-addressed by the future

regulatory framework

Sector coupling: energy systems hybridisation fosters

guarantee for final consumers to use a decarbonised energy

GRTgaz │ Shippers’ Meeting – March 14, 2019 13

Upstream offer:
Highlight in 2018
and news for 2019
Shippers’ Meeting - March 14, 2019
Agenda

Dunkirk

Oltingue

L gas

Redistribution of auction premiums

GRTgaz │ Shippers’ Meeting – March 14, 2019 15

 Dunkirk

GRTgaz │ Shippers’ Meeting – March 14, 2019 16

Dunkirk
New rules of sale as from June 2018

According to the deliberations of July 27th, 2017 and March 8th, 2018

Yearly and
15 independent
quarterly sold Short term
years from
one month capacities sold
October to
before auctions same as before
October
on PRISMA

Creation of
quarterly OSP
capacity

GRTgaz │ Shippers’ Meeting – March 14, 2019 17

Dunkirk
New rules of sale as from June 2018

GRTgaz │ Shippers’ Meeting – March 14, 2019 │ Accessibility Levels: Public: x 18

 Oltingue

GRTgaz │ Shippers’ Meeting – March 14, 2019 19

Oltingue
New entry capacities as from June, 1st 2018
According to the deliberation of July, 27th 2017:

 Creation of 100GWh/d firm capacity and 100GWh/d interruptible capacity

without developing the network core
 Firm capacity are sold after selling entry capacity at Virtualys and
Obergailbach.
 Firm is commercialized according to interruptible calendar
(except for within day: firm slot)
Network core
capacity
GWh/d Virtualys Obergailbach Oltingue
common to the
three points

Firm capacity 640 620 100 1260

GWh/d Backhaul

GWh/d Firm
GRTgaz │ Shippers’ Meeting – March 14, 2019 20
GWh/d Interruptible
Oltingue
Strengthening 30GWh/d interruptible exit capacities

GRTgaz has worked jointly with the Swiss operators to optimize operating
conditions at Oltingue in order to partially address the supply problems of
Switzerland and Italy since the reduction at Wallbach interconnection point.

From December, 1st 2018 to September, 30th 2019

GWh/d Firm
GRTgaz │ Shippers’ Meeting – March 14, 2019 21
GWh/d Interruptible
 L gas

GRTgaz │ Shippers’ Meeting – March 14, 2019 22

 L gas Risk of:
This provider is  Demerging of the H&L zone
Background commited to  Regressing in terms of supply
ensure competition
swap service  Complex management for GRTgaz
until 2023

2005 2009 2013 2018 2023 2029

Implementation
Merge of L gas and H
of the
gas balancing zone
contractual H
gas to L gas
conversion
service
L zone is gradually converted
to H gas between 2018 and 2029
Contract
conclued with a
provider
covering an H
gas to L gas
swap service

GRTgaz │ Shippers’ Meeting – March 14, 2019 23

L gas
New offer starting from April, 1st 2019

For the security of supply of the L zone until the end of the conversion in 2029.

According to the deliberation of December, 13th 2018:

 Shippers can still supply customers located on L zone but only with H gas.

 H gas to L gas swap service is the only supply of L gas for all
consumption on L zone

 L gas infrastructures remain opened to all shippers

 As from April, 1st 2019, GRTgaz will sell

7.5 GWh/d of day-head backhaul capacity
at Taisnières B

GWh/d Backhaul

GRTgaz │ Shippers’ Meeting – March 14, 2019 24

 L gas
New offer starting from April, 1st 2019

 Shippers who use L gas infrastructures will have to be balanced daily

in L zone.

 Penalties will apply in case of imbalance in L zone:

Balance sheet gap in scope B Threshold Price for Scope B

Positive (long) balance sheet gap
€1/MWh
below the threshold
5 GWh
Positive (long) balance sheet gap €30/MWh
above the threshold
Negative (short) balance sheet €3.35/MWh
gap below the threshold
1 GWh
Negative (short) balance sheet €30/MWh
gap above the threshold

GRTgaz │ Shippers’ Meeting – March 14, 2019 25

 Redistribution of auction
premiums

GRTgaz │ Shippers’ Meeting – March 14, 2019 26

Redistribution of auction premiums
End of the former mechanism

 Redistributed amount in €:

Auction premiums Distribution difference

Jul 17 – Oct 18 Jul 17 - Sep 18

 Rules of redistribution:
• Prorata of consumption* between October, 1st 2017 and September, 30th
2018.
• In the invoice of November 2018

*reduced by quantities excluded under capacity allocation phase at regulated price for gas-intensive site

GRTgaz │ Shippers’ Meeting – March 14, 2019 27

Redistribution of auction premiums
New rule as from November, 1st 2018

 Redistributed amount in €:

Auction premiums
Nov 18 – Sept 19

 Rules of redistribution:
• Prorata of consumption during the same period
• Once a year in the invoice of November 2019
• Unitary amount will be published on the GRTgaz’ website

GRTgaz │ Shippers’ Meeting – March 14, 2019 28

Upstream capacities
ATRT7 propositions

Shippers’ Meeting - March 14, 2019

 ATRT7 context,
risks and challenges

GRTgaz │ Shippers’ Meeting – March 14, 2019 30

 ATRT7 context
During ATRT7, strong decrease of long term capacity
subscriptions on the entry PIR
At the end of the ATRT7 period, new optimized subscriptions
are expected to cover the market needs
Expected
Long term capacities on France market needs
subscriptions
entry IP (PIR and PITTM) Range depends on:
• Consumption scenario
• Transit supply
• Biomethane production
• LNG supply
GWh/j 3 000 3 000

2 500 2 500

2 000 2 000

1 500 1 500

1 000 1 000

500 500

0 0
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

ATRT 7
GRTgaz │ Shippers’ Meeting – March 14, 2019 31
ATRT7 risks

The slow decrease of long term subscribed capacity level at the

North entry PIR should lead to:

An increase of spread between market places (in theory limited to

the tariff of the capacity between market places) and at the end
an increase of the PEG price.

A decrease of upstream capacity subscription incomes, thus a

potential increase of GRTgaz overall tariff.

GRTgaz │ Shippers’ Meeting – March 14, 2019 32

 ATRT7 stakes and contemplated offers
 ATRT7 stakes  Contemplated offers
 Limiting PEG price increase: Modifying
 Limiting spread increase Reshuffling short term
multipliers
 Attracting LNG, the single gas
pipe competitor
DKLNG firm
Pooling
519GWh/d

 Limiting incomes reduction: Changing additional

 Attracting new subscriptions subscription calculation
(LNG, short term at PIR…)
Increasing
Implicit
 Increasing transit incomes PIR Ober
allocations
backhaul

 Delivering more attractive and TRF PIR DK

simplification simplification
easier to operate offer

GRTgaz │ Shippers’ Meeting – March 14, 2019 33

 The 3 new offers for the
next CRE consultation
(March 2019)

GRTgaz │ Shippers’ Meeting – March 14, 2019 34

 Reshuffling (PIR)

 Principle
Transferring a capacity from one PIR (source point) to another
(target point), on a determined period

 Shippers benefit from reshuffling:

 taking advantage of lower spreads over the capacity costs
 valuing unbundled and unused capacities

 Following the 2 GRTgaz objectives (for target points):

Reducing the PEG price Without losing income opportunities

⇒ The offer only applies to ⇒ The offer only applies to points,
entry points maturities and periods over which there
is no subscription potential:
• Obergailbach and Virtualys
• Annual, quarterly and monthly
• Until 2023

GRTgaz │ Shippers’ Meeting – March 14, 2019 35

Reshuffling (PIR)

 Creating value for the Shipper

 Revalue unbundled capacity by transferring it to another point in
order to take advantage of a spread

 Creating value for the Consumer

 Increase liquidity and reduce the PEG price by encouraging
shippers to sale gas on the PEG as soon as the spread is effective
(but lower than the capacity price)

 Creating value for GRTgaz

 No loss of income if the offer is limited to points with a low re-
subscription potential
 Revenue: fee of 10% of the reshuffled capacity amount

GRTgaz │ Shippers’ Meeting – March 14, 2019 36

LNG advantages and specifities
 LNG is a key gas to gas competitors and leads to PEG price
reduction

 LNG offers some advantages for the network, to all market

stakeholders:
 Compressor energy saving
 Reduce congestion risks
 Ease storages filling in summer

 But LNG is hard to attract as:

 It is arbitrated between worldwide market places
 It is subjected to strong supply contingency (shipping
conditions, production, etc.)

 GRTgaz wishes to deliver a more flexible PITTM offer to

increase
 Offer value
 Subscription opportunities

GRTgaz │ Shippers’ Meeting – March 14, 2019 37

 Pooling (PITTM)
 Within-month transfer of unused capacity from a PITTM to
another one
 Allows shippers to take advantage of the 3 French coastlines
 Allows France to better compete versus other LNG markets
 PITTM offer is consistent with Elengy offer where pooling exists
(and also compatible with DKLNG)

 Service fee = 10% of PITTM tariff

 Risk of loss of subscription at full

tariff is low compare to potential
benefits
 Only applicable on within-
month
 PITTM offer is more flexible,
thus more valuable: potential
for additional subscriptions
 More LNG flowing in = less
congestions and less fuel gas
costs
GRTgaz │ Shippers’ Meeting – March 14, 2019 38
 Change of additional subscriptions
calculation
 As for today, shippers bear the risk of paying additional capacity
at PITTM beyond their control
 Notice of subscriptions versus uncertainty on actual ship arrivals
 Non optimal profile of subscription (“10+X” rule)
 Send-out profile at the hand of regulated terminal operators
 Calculating additional capacity on a day-by-day basis

 Thus uncertainty on actual send-out costs can dissuade potential

subscriptions

 Offers:
 An ex ante flat subscription
 An ex post additional capacity calculation, as the difference
between total send-out and total initial subscribed volume

GRTgaz │ Shippers’ Meeting – March 14, 2019 39

 CRE ATRT7 timeline

GRTgaz │ Shippers’ Meeting – March 14, 2019 40

 CRE ATRT7 agenda

2019
January February March April May June July August September October November December

Public
consultation
tariff Public
framework consultation
ATRT7 tariff ATRT7
deliberation
Public consultation
tariff structure for
gas infrastructures
(transport,
distribution,
storage)

 We need your support to convince the CRE about the interest of

our offer’s evolutions!

GRTgaz │ Shippers’ Meeting – March 14, 2019 41

Downstream offer:
Wrap-up of all
changes ahead
Shippers’ Meeting - March 14, 2019
 Summary
1/ Changes in 2019
- Daily capacity lead-times
- Communicating the subscribed downstream capacity to the
final customer

2/ Evolutions proposed in ATRT7 :

- Penalty calculation
- Winter monthly factors

Those changes and proposed evolutions are motivated by :

- the ambition to simplify our offer


- the need the increase subscriptions (or lessen subscription
tariff erosion) for a stabilizing effect on the tariff.

3/ Storage compensation : feedback and regulator’s announcement

4/ Unpaid interruptibility product

GRTgaz │ Shippers’ Meeting – March 14, 2019 43
 1/ Changes in 2019
Easing capacity subscription

tariff
- To give its clients more time to book, we shift the daily downstream
capacity lead-time from 3 pm D-1 to 8 pm D-1.
As of April 1st 2019 (first affected delivery day will be April 2nd)

tariff
- We are also studying the possibility to shift even more the deadline
for daily capacity subscription : a new booking window during the
delivery day is under study.
As soon as possible (end of 2019) ?

- To ease communication with your clients, we will ask all shippers

supplying final customers via e-mail, on a yearly basis, if they allow
us to disclose the subscribed capacity to their client. For
operational reasons, we won’t be able to manage answers that are
not the same for all clients of your portfolio, for the whole year (« all
or nothing »)
As soon as possible

GRTgaz │ Shippers’ Meeting – March 14, 2019 44

 2/ Evolutions proposed in ATRT7
Penalties and monthly factors

Penalties :

- We propose to end the yearly direct redistribution of the penalties for

exceeding capacity on the downstream network. These amounts would be
given back to the market through a decrease of the capacity tariff.

- We propose to harmonize the penalty calculation on all three terms of the

downstream capacity : no more distinct formula for the Main Network Exit
term.

tariff- We propose to remove

the second tranche for penalty calculation.

tariff Monthly factors : Example for Daily

- We propose to decrease the monthly capacity factors in January and

February from 8 to 4.

GRTgaz │ Shippers’ Meeting – March 14, 2019 45

3/ Storage Compensation
Current principles on the distribution network
Since April 1st 2018 :
-1 The CRE establishes a regulated revenue each year for
the storage operators Amounts in 2018 (MEUR)
-2 Storage operators sell their capacity through auctions
-3 The missing amount between regulated revenue and 3
auctions revenue is perceived through the means of the 1
Storage Compensation, via the transmission agreement 2
(currently only for clients connected to the Distribution
Networks)

Storage compensation is paid by shippers proportionally to the

Capacity
modulation of their customers, being is the difference between
their maximum capacity and their average consumption. Storage
Compensation
basis
An exemption is made for counter-modulated customers Average
(Summer consumption > Winter consumption), and customers Consumption consumption
they have declared they can be selectively cut without risks in
case of emergency (« délestables sans risques »)

GRTgaz │ Shippers’ Meeting – March 14, 2019 46

3/ Storage compensation
Feedback on the first year

GRTgaz collects the compensation term on a monthly basis.

Each shipper who has unexempted customers on the distribution
networks during a month M (circa 30 shippers) receives from GRTgaz
before the 20th of M+1 three different invoices related to the 3 storage
operators.

For the delivery period April-December 2018, this represents roughly

480 M€ excluding VAT

For GRTgaz it is a difficult process based on heterogeneous data

sources from the distribution operators :

- GRTgaz is not yet in a position to make corrective invoices in case

of retroactive data information far in the past
- GRTgaz calls distribution operators for more accuracy and
homogeneity in their data transmission, and encourages shippers
to also pay cautious attention to data from the distribution
operators, so that more reliability is achieved for all parties.

GRTgaz │ Shippers’ Meeting – March 14, 2019 47

 3/ Storage Compensation
Regulator’s announcement

During the last Downstream Offer concertation, the CRE has announced that
they consider to extend the storage compensation collection* to customers
connected to the transportation network, as of April 1st 2020.
In addition, in the event that DGEC has not published the decree on
interruptibility, the CRE has asked GRTgaz to work on a similar product.
* In case the extension of collection is confirmed, the amount for
2020 would then be split between distribution and transport
GRTgaz │ Shippers’ Meeting – March 14, 2019 customers 48
4/ Unpaid interruptibility product

Contract as close as possible to secondary interruptibility in the

works of the DGEC

Unpaid product

Contract directly signed with the final consumer

Open to any consumer offering a « capacity* » greater than

40 MWh/d

The « capacity » will not be used in the calculation of the

storage compensation

A similar proposal on the distribution network

GRTgaz │ Shippers’ Meeting – March 14, 2019 * Not in the meaning of the transmission agreement 49
2018: gas grid
overview

Shippers’ Meeting - March 14, 2019

5% decrease of natural gas consumption

Industry
except
CCGT+CT*

137 TWh
Public
+2%
supply

270 TWh
2018: 442 TWh
-2% 2017: 465 TWh
35 TWh
-35%
CCGT+ CT

Gross gas consumption in 2018

GRTgaz zone
*Combined cycle gas turbines + combustion turbines
Reduction of gas consumption due to milder temperatures and to a lower demand
for power generation;
Growth of the industrial consumption for the 5th consecutive year (+4,4% between
2014 and 2018)
Stability of the climate-adjusted low pressure distribution consumptions (277 TWh).
GRTgaz │ Shippers’ Meeting – March 14, 2019 51
Gas: a flexible resource for power
generation
Gas consumption of CCGT+CT

55 TWh
46 TWh
35 TWh
21 TWh
8 TWh

2014 2015 2016 2017 2018

Decrease of CCGTs consumption due to

better availability of nuclear, hydraulic and wind
power power generations, as well as to milder
temperatures in 2018.
Plants in operation on January 1st, 2018
Planned plants
Groups by site However, the utilization rate of gas-fired
power plants is important, due to their high
flexibility.

GRTgaz │ Shippers’ Meeting – March 14, 2019 52

News gas conversions in the industry
Near 2.5 TWh of gas consumption related to new substitutions from oil and coal
to gas carried out in 2018 for industrial customers. Substitutions carried out since
2012 have allowed to reduce the annual emission by 2.2 Mt of CO2 in 2018.

Some examples of conversions carried out in 2018

Glass sector: Saverglass in Feuquières (Oise)  switch from oil

heating equipments to natural gas equipments. The Feuquières
glass factory (established in 1897) is one of the three Saverglass
production sites based in France (out of 5 in the world) and it is
an expert in luxury bottle manufacturing and decorating.

Chemistry: NAPHTACHIMIE in Martigues (Bouches-du-Rhône)

 conversion of fuel boilers to natural gas-fired boilers.
Established in 1945, the NAPHTACHIMIE group is a subsidiary
equally owned by Total Raffinage Chimie and INEOS.

Sugar: Cristal Union in Villers-Faucon (Somme)  conversion of

the fuel refinery to natural gas. Cristal Union is an agro-industrial
cooperative group, among the first European producers of sugar
and alcohol. It is mainly located in France.

GRTgaz │ Shippers’ Meeting – March 14, 2019 53

Creation of the TRF (Trading Region
France) on November 1st, 2018

A more attractive market: an 8% increase

in the number of shippers in 2 months

A single price reference system:

Southern France industrial consumers
(almost 50 TWh) got a price reduction
of about 1.4 to 1.9€/MWh, representing
an gain of nearly €80 million yearly.

Strengthening of the security of supply:

+42% of gas transmission capacities
between the North and the South.

GRTgaz │ Shippers’ Meeting – March 14, 2019 54

 Growth of LNG entries
-6 TWh
-3%

+2 TWh -21 TWh

+25% ++ -12%
+ +20 TWh
+24 %

+6 TWh
+13 TWh
+ + +22 %
+45 %

447 TWh : slight decrease in gas

pipeline entries in the North of
France.

117 TWh : 7 year high for LNG

entries

+ 33 TWh toward Switzerland/Italy: 6

+ Interconnections
with LNG terminals
+ Interconnections
adjacent networks
with
-12 TWh
+ year record transit
+ 0 TWh 31 TWh toward Spain: decrease in
+0 % the annual transit (but strong
-27%
increase since TRF creation on Nov
2018 gas flows VS 2017 1st 2018: + 50%)
Source : smartGRTgaz of the TRF on 1/11/2018: + 50%)

GRTgaz │ Shippers’ Meeting – March 14, 2019 55

Efficient storage regulation

Stock level – whole France Rate of injection

(GWh/j)
140
Injection campaign
120
TWh of contractual stock

100 2018 554

80

60 +30%
40 average
moyenne
2013-2017 425
20

0
1 août
1 nov.
1 déc.

1 sept.
1 oct.
1 juin
1 mars

1 mai
1 avr.
1 janv.

1 févr.

1 juil.

2015/2016 2016/2017 2017/2018

Dynamic fill-in campaign due to the Dec. 2017 storage regulation reform.

GRTgaz │ Shippers’ Meeting – March 14, 2019 56

Biomethane: a real take-off…

Biomethane injection sites connected

to the gas grid

714 GWh injected in 2018 in

France (+75%). 76 sites in
operation, 64% are agricultural
projects.

1.2 TWh of installed capacity at

Dec. 31st 2018.

Nearly 14 TWh in the capacity

register (+ 6 TWh compared to
2017).

GRTgaz │ Shippers’ Meeting – March 14, 2019 57

…but contradictory signals for the future

Major breakthroughs in 2018 :

- Food Law enacted on Nov. 1st : recognition of « a right to inject » ; direct connection to
the transmission network possible, with polyethylene pipelines
- Anaerobic digestion ministerial workshop on Jan. 14th 2019 : 40% rebate in the
transmission network connection cost (up to € 400k).
Food Law decree promised for April 2019.
- Positive perception by local communities of renewable gas advantages : biomethane is
an efficient tool for decarbonation, agricultural policy, circular economy, land-use
planning policy.

But disappointing outcomes from the Multi Year National Energy Planning (« PPE ») :
- 2023 volume target reduced from 8 to 6 TWh, 2030 target reduced to 7% of gas
consumption
- Biomethane buy-back tariffs due to decrease by 30% in 2023 (67 €/MWh), by 40% in
2028 (60 €/MWh)
- Introduction of tenders for yearly 0.7 TWh

GRTgaz │ Shippers’ Meeting – March 14, 2019 58

 Annexes

GRTgaz │ Shippers’ Meeting – March 14, 2019 59

Industry: evolution of gas consumption
2018/2017

2018/2017 gas consumption discrepancy

2,50

2,00

1,50

1,00
TWh

0,50

0,00

-0,50

-1,00

GRTgaz │ Shippers’ Meeting – March 14, 2019 60

Industry: review of the last five years of
consumption

Industrial gas consumption except centralized

production of electricity
138 000

137 000

136 000

135 000

134 000

133 000

132 000

131 000

130 000

129 000

128 000
2014 2015 2016 2017 2018

GRTgaz │ Shippers’ Meeting – March 14, 2019 61

 Flows from France at the Spanish border

A strong increase in flows to Spain, partly due to the creation of the Trading
Region France on November 1, 2018.
Flows regularly beyond firm capacity, but without physical congestion except for 2
days in January 2019.

GRTgaz │ Shippers’ Meeting – March 14, 2019 62

 Flows from France at the Spanish border

Strong
increase of
the flows

A strong increase in flows to Spain, partly due to the creation of the Trading
Region France on November 1, 2018.
Flows regularly beyond firm capacity, but without physical congestion except for 2
days in January 2019.

GRTgaz │ Shippers’ Meeting – March 14, 2019 63

Strengthening the
competitiveness of the
French biomethane sector
Renewable gas and ENEA study

Shippers’ Meeting - March 14, 2019

 A collective study
A large group of players involved in this study

Board meeting 1 Board meeting 2 Board meeting 3 Board meeting 4 Board meeting 5 Board meeting 6 Board meeting 7
5/04 26/04 29/05 12/07 23/08 26/09 19/10

Debriefs about the technical levers

Detailed executive summary in order to

approve the framework and hypothesis
with the board meeting and the review
committee Publication of a
Debriefs about the project financing public
Delivered to Solagro and approved executive
summary in
Short meeting outline for large diffusion November 2018
via the SER and the ATEE and a public
Debriefs about positive externalities
report in
January 2019
Many feedbacks after the diffusion

GRTgaz │ Shippers’ Meeting – March 14, 2019 65

 Study of three types of unit
Autonomous agricultural Territorial agricultural Territorial industrial
(AA) (TA) (TI)
Injection 100 Nm3/h 200 Nm3/h 300 Nm3/h
capacity (9,180 MWh/year) (18,411 MWh/year) (27,640 MWh/year)

Inputs 21,860 tons 33,500 tons 45,000 tons

Mixed Manure: 59%; Slurry: 27%; CIVE: 54%; Slurry: 24%; Food CIVE: 47%; Food industry
inputs Straws: 5%; CIVE: 9% industry waste (except animal waste and bio-waste: 33%;
by-products) and bio-waste: Manure: 12%; Slurry: 8%
11%; Manure: 9%
 Unit with agricultural  Unit with CIVE as main  Unit focused on the reuse
Main
effluents as main feature; feature plus slurry, manure, of bio-waste and food
characteristics independent on bearings food industry waste and bio- industry waste, with a high
 Pool of a few farmers waste proportion of CIVE and a
 Injection in the gas  Pool of many farmers limited supply of manure
distribution network  Injection in the gas and slurry
distribution network  Injection in the gas
transmission network
Comments about the sample cases selection
Selection of cases: as each unit of biomethane is specific, these sample cases may not reflect the full diversity of the
situations encountered.
CIVE : intermediate crop for energy purposes are considered as one of the main bearings for the development of
medium term methanisation (ADEME).
GRTgaz │ Shippers’ Meeting – March 14, 2019 66
 Supporting the sector is more than ever
a necessity

AA TA TI

LCOE 122€/MWh 105€/MWh 94€/MWh

Without
TRI Project 4.9% 3.8% 2.9%
subsidy
DSCR 1.26 1.17 1.17

LCOE 107€/MWh 94€/MWh 85€/MWh

With subsidy
(20% on the TRI Project 8.9% 7.7% 6.6%
CAPEX)
DSCR 1.35 1.30 1.27
Financial criteria usually expected by banks
TRI Project: between 6 and 8% minimum
DSCR: between 1.3 and 1.4 minimum

The levelised cost of energy (LCOE) they have been valued over 15 years with a weighted average cost of capital (WACC) of 5 %.

GRTgaz │ Shippers’ Meeting – March 14, 2019 67

 10 main themes to strengthen the
competitiveness of the biomethane
sector in France

Maximize Limit Maximize Strengthen Develop

methanogenic power inputs costs production of standardization operators’ formation and
of inputs renewable gas and pooling optimize maintenance

Limit costs of Benefit from the scale Add value Optimize Limit
connection and effects related to the to the units over an costs and structure impact of exogenous
injection skids size of the units extended life span of the financing factors leading to a
potential costs increase

GRTgaz │ Shippers’ Meeting – March 14, 2019 68

 Expected competitiveness profits in
short and medium term

121.9€

105.3€
96.7€ 94.0€
87.0€
- 25.2€ 82.4€
75.2€ 75.7€
- 18.3€
- 14.3€ 65.7€
- 11.8€ - 18.3€
- 10.1€

Current Short term Medium term Current Short term Medium term Current Short term Medium term
(2020-2025) (2025-2030) (2020-2025) (2025-2030) (2020-2025) (2025-2030)

Autonomous agricultural Territorial agricultural Territorial industrial

For the three cases, a 20% decrease of the costs can be reached by 2020-
2025

GRTgaz │ Shippers’ Meeting – March 14, 2019 69

 Biomethane is still more expensive than
natural gas…

A discrepancy of 30 to 50€/MWh with the natural gas price in 2030

Comparison of the costs of natural gas and

biomethane by 2030
AA biomethane
82€/MWh

AT biomethane
75€/MWh

IT biomethane
66€/MWh

Natural gas
33€/MWh

Source: IEA Outlook for Natural Gas

GRTgaz │ Shippers’ Meeting – March 14, 2019 70

 … but a lot of positive externalities
remains to be quantified
Greenhouse gas emissions avoided*
Pollution of groundwater avoided
State Job creation
Non-monetary additional advantages
- -30% of natural gas importation (autonomy and trade balance)
- TE dynamics within the territories and the agricultural world
- Job creation in rural areas

Energy Production of a non-variable energy that can be stored (adaptation costs of the network
consumers reduced)
Adding value to gas networks (limiting the distribution and transport costs increase)

Waste producers
Reducing bio-waste treatment costs
(food industry
waste, community)

Decreasing the use of nitrogenous mineral fertilizers

Non-monetary additional advantages
Farmers - Reducing the use of mineral inputs (phosphorus, potassium, etc.)
- CIVE positive impact on the main crop
- Biodiversity protection (pollinators)
- Diversification of the source of income

*monetization in a conservative case with a carbon tutelary value of 100€/tCO2e

GRTgaz │ Shippers’ Meeting – March 14, 2019 71

Conclusion
Biomethane production costs are expected to decrease in the coming
years
But the goals defined by the PPE (French energy multiannual
programming) seem difficult to reach
Implementation of calls for tenders from 2019
Goals of feed-in tariff decrease
- 67€/MWh in 2023
- 60€/MWh in 2028

The positive externalities of methanisation must be economically

valued

How to give an economic value to the

services freely provided by the nature?

GRTgaz defends:
The implementation of calls for tenders for sufficient-sized projects with a
notice
The revision of biomethane feed-in tariffs, but at an appropriate pace and
in consultation with the biomethane sector

GRTgaz │ Shippers’ Meeting – March 14, 2019 72

TRF feedbacks and
evolutions

Shippers’ Meeting - March 14, 2019

 Content
2018/2019 Winter feedbacks
 TRF commissioning
 New PEG figures
 Winter supply and limit situations

TRF continuous training

Next summer 2019

 The maintenance schedule for 2019
 New superpoints, managed with Teréga (1/4/2019)

Evolutions and propositions for summer 2020

 Concertation in May/June 2019
 New publication timing

GRTgaz │ Shippers’ Meeting – March 14, 2019 74

 2018/2019 Winter feedbacks
 TRF commissioning
 New PEG figures
 Winter supply and limit situations

GRTgaz │ Shippers’ Meeting – March 14, 2019 75

TRF commissioning
The different stakeholders of the project were ready:
 Infrastructures
 SI
 Operational teams (Shippers and TSO)

The 1/11 switchover worked well for a high majority of shippers.

 Nominations / Programmations
 Balancing / Nominations to the PEG
 Vigilance outlook

And a record of LNG send-out in the first days

of November!

Thank you all for this collective success!

GRTgaz │ Shippers’ Meeting – March 14, 2019

New PEG figures
The price and liquidity figures show that the PEG is attractive
and competitive

average end-of-day spread between PEG and TTF.

0,1 € PEG price very correlated and close to TTF price.
/MWh But increase in January and beginning of February (0,4 €/MWh).
PEGN-TTF :
0,00€/MWh*
TRS-TTF :
1,68€/MWh*
*: from January 2017 to October 2018

2 648 traded each day on the PEG, close to the volumes previously traded
GWh on the PEG North and TRS combined
PEGN (2260
GWh) + TRS
(550 GWh) =
2 810 GWh*
*: from Novmber 2017 to February 2018

active actors at the PEG on January 2019.

109 In addition, 15 new transmission contracts were signed with GRTgaz,
105* bringing the number of shippers to 154
*: active actors on average from January 2017 to October 2018

GRTgaz │ Shippers’ Meeting – March 14, 2019

Winter supply

More LNG this winter than the other years (507 GWh/d
compared to 227 for the 3 last winters…)

A continuous and high withdrawal of storages, especially

when LNG send-out was low
Supply flows downstream of limits
1400
A very high level of 1200

outputs at Pirineos 1000

800
during all winter 600
(around 180 GWh/d, 400
200
even during the 0
Elengy strike) -200
-400
01/11/2018 01/12/2018 01/01/2019 01/02/2019

Net storage withdrawal (Atlantique, Sud-Est and Lussagnet)

LNG send-out (Montoir and Fos)
Pirineos exit

GRTgaz │ Shippers’ Meeting – March 14, 2019 78

Limit situations
Vigilance Outlook : Green Alert Level during almost all the winter…

No tension on
any limit….

Excepted on
03/12/2018 on
the S1 limit.

GRTgaz │ Shippers’ Meeting – March 14, 2019 79

Winter supply and limit situations
Focus on 3/12/2018
Initial supply situation :
 High output in Pirineos
 Low consumption
 Low withdrawal of North storages
 Injection in Lussagnet storages

The market were long during the

day
Rebalance in the afternoon, with
an increase of injection in
Lussagnet (168 GWh/d)
Red Alert on S1 Limit
Interruption of interruptible
capacity in Pirineos
Back to the green

GRTgaz │ Shippers’ Meeting – March 14, 2019 80

Monitoring of storage levels
TRF mechanisms rely on storage flexibility.

Storage levels downstream TRF limits are monitored in order to

anticipate possible gas shortage:
 described in the Winter
Outlook
 weekly study with an
outlook on 2 and 4 weeks
 use of demand forecast on
the next 21 days
 various winter scenarios
 use of LNG forecast on the
next 15 days
 actual level in storages
Weekly publication on grtgaz.com : Green for this winter

GRTgaz │ Shippers’ Meeting – March 14, 2019 81

Flow commitment
If a potential gas shortage is detected, TSOs launch a call for
tenders for a flow commitment service.
Flow commitment is sending gas into the grid from selected points
according to TSOs’ need.

Low storage Call for Flow

level tenders commitment

Find the contractual framework of the flow commitment on

grtgaz.com in the TRF section

And do not hesitate to look at the Find Out More sheet about
flow commitment
GRTgaz │ Shippers’ Meeting – March 14, 2019 82
 TRF continuous training

GRTgaz │ Shippers’ Meeting – March 14, 2019 83

 The mechanisms are already operational…
… with the vigilance outlook online since
November 1st…

… one limit reached and managed by

… two tests of the Locational Spread to interrupting interruptible capacities…
validate our IT systems…

Shipper … and many webinars to exchange with you

about these topics.

GRTgaz │ Shippers’ Meeting – March 14, 2019 84

 …but have not yet been used, so we invite
you to:
A full-scale test to allow you to experience
a congestion management situation before
a potential triggering event

A training quiz, operationally oriented, for large April 10, 2019

part about the Locational Spread (in your mailbox
next week)

GRTgaz │ Shippers’ Meeting – March 14, 2019 85

« Full-scale test »

April 10th in working hours

For all signatories of the Locational Spread contract

(via the usual operational contacts)

No physical impact:
•NS1 upstream, so no interruption of interruptible capacities
•Cancellation of PEGAS trades, so no physical renomination expected
•No RMUT triggered

GRTgaz │ Shippers’ Meeting – March 14, 2019 86

 Next Summer 2019
 The maintenance schedule for 2019
 New superpoints, managed with Teréga
(1/4/2019)

GRTgaz │ Shippers’ Meeting – March 14, 2019 87

Summer capacity restriction indicators
GRTgaz goal: reduce over 50% the summer capacity restrictions
between 2016 and 2020
Capacity restriction rate
2016
published in the February schedule 2019
Reference
(summer)
Core Network (ex N>S) 10,3% 6,9%
Entry Points 10,0% 3,9%
Exit Points 7,6% 3,8%
Global capacity weighted indicator 9,4% 4,2%
-55%
Main works and maintenance improvements leading to this result:
 Improvements in expertizing of defects with less cutting scheduling
 Temporary repair
 Less new investment projects
 Maintenance works coordination
GRTgaz │ Shippers’ Meeting – March 14, 2019 88
Maintenance schedule for 2019
What’s new?

The CPRTt:
 The probably available capacity

New superpoints:
 For the works impacting before the N>S link
 Some of them are co-managed with Teréga
(new)
Only 2 superpoints will be active on
GRTgaz side next summer

The publication planning

 To be consolidated in collaboration with the storage auctions

GRTgaz │ Shippers’ Meeting – March 14, 2019

 GRTgaz and Teréga co-manage 3 superpoints

NS2 downstream and NS3 downstream:

These superpoints are divided in 2 sub-superpoints
(SSP) with the same restriction rate.
These 2 SSP « communicate » with the 2 following
tools:
 COE transfer (per shipper) from one TSO to the
another (nominated by the shipper)
 UIOLI mutualization between GRTgaz and
Teréga (transparent for the shippers)

NS4 downstream:
 There is no restricted point for GRTgaz.
 Fos « bonus » is automatically transferred from GRTgaz to Teréga, by the shipper (transparent
for the shipper)

GRTgaz │ Shippers’ Meeting – March 14, 2019 90

Optimization of storage injection
thanks to Superpoints’ flexibility
Atlantic storage an be filled with this maintenance programme
And LNG flows relieve the constraints on Atlantic, allowing more UIOLI

Reasonable
assumptions
relieves all or almost
all constraints

Very prudent assumptions

with no LNG. GRTgaz
maintenance delays 100%
filling by one month

GRTgaz │ Shippers’ Meeting – March 14, 2019 91

LNG send-out outlook
The PEG - JKM spread might give a trend of LNG volume that
would flow to France (indicative only, prices can evolve quickly,
other factors are involved)
-0,55
Qatar -0,72
Nigeria
US (Gulf -1,51
of Mexico)
Egypt -2,00
-2,15
Algeria
-2,57
Norway
April May June July August September
Cargoes from this source are expected to go to Asia rather than France
Cargoes from this source are expected to go to France rather than Asia but margin is slim
Cargoes from this source are expected to go to France rather than Asia
Spread PEG-JKM (€/MWh)

Market prices as of 05/03 settlements. Charter rate at 46 kusd/day

Market prices anticipate a healthy supply of LNG in Europe at least

until August
GRTgaz │ Shippers’ Meeting – March 14, 2019 92
 Maintenance schedule for 2019:
To help you:

2 Webinars

Link to watch the rurun and

download the simulator

Shipper Data PITTM Montoir PITS Atlantique PITTM FOS PITS Sud-Est
ID IT0002 PSC000CA IT0001/03 PS000SA
COS (Exit) 50
COE(Exit)
COS (Entry) 20
COE (Entry)

A superpoint simulator Transfert GRTgaz -> Transfert Teréga ->

Teréga GRTgaz

COSsp(Exit) 50 max -35

transfer
COEsp(Exit) 25 -15
SSPNS3D nomination
COE with bonus transfer
20 -15
and transfert confirmation

Nomination -40 10
GRTgaz │ Shippers’ Meeting – March 14, 2019 Confirmation -20 10
 Evolutions and propositions
for summer 2020

GRTgaz │ Shippers’ Meeting – March 14, 2019 94

 Evolutions and propositions for summer 2020

A Concertation meeting will be scheduled in June 2019

 Feedback on 2019 summer planning
 Proposition: new publication timing, better coordinated with
the storage auctions

 Feedback on the first months of works and maintenance

 Proposition: challenge the use of Locational Spread to
reduce the capacities restrictions:
 Increase the threshold of « low impact works » (> 30GWh/d)
 Increase the climatic risk (over 10%)

A scoop :
Merger of PITS North East and PITS North West into
one single PITS North for the 1/4/2020

GRTgaz │ Shippers’ Meeting – March 14, 2019 95

 New publication planning

 A first publication in October, before the first storage auctions and

later than the previous years (August), in order to have a more
consolidated publication and avoid big changes.

 An update in December, in case of significant changes

 An final publication in February, on T@

Storages
October December Storages auctions in End of D-1
auctions in
Y-1 D-60 WD-5
Y-1 January & February Feb. Y (3pm)
November

E-mail If needed, Restrictions

publication of the update sent First Updates
provisional by E-mail Publication
program on
Trans@ctions

GRTgaz │ Shippers’ Meeting – March 14, 2019 96