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Gas system infrastructure

The gas system infrastructure in the Czech Republic is highly developed and operated with a high level of reliability and safety. Companies operating partial segments thereof (transmission, distribution, production and storage of gas) in the liberalized setting of the energy sector try to monitor market trends and meet socio-political requirements for the security of gas supply. The variability of market motives and political goals, in contrast to the inertia of construction and commissioning of new infrastructure elements, is connected with considerable risks for the infrastructure operators. Only constructive and strategically-accepted legislative acts may bring stability into the gas sector, which is much needed in order to define the development of gas companies. 

The requirements for infrastructure stipulated in Regulation no. 1938/2017 are met, thus directly shaping further development of the system. However, the obligation to assess the market demand for incremental capacity on cross-border profiles in short-term intervals in accordance with Regulation (EU) 459/2017 makes the situation very dynamic as regards the possible ways of the transmission system development. The market interest in gas transmission from the German Gaspool trading area into the Austrian Baumgarten hub provides an opportunity in the form of increased transit of gas via the territory of the Czech Republic. The ten-year development plan published by NET4GAS takes this into account. Capacities of border transfer stations are shown in the following table.

Existing and future capacities of border transfer stations (bcm/y)

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The transmission system is, given the implementation of the Capacity4Gas project, well-sized. By its capacity, it is prepared to secure increased demand for gas transmission to Lanžhot station, consumption of final customers and demand for storage capacity utilization. The intrastate transmission system has sufficient capacity with regard to the level of final consumption and requirements for injection of gas into underground gas storage stations in almost all regions of the Czech Republic. The only bottleneck is the line DN 700 between the Mutěnice and Libhošť nodes. The capacity of the DN 700 gas pipeline is no longer satisfactory in times of high consumption and requires broader cooperation with the UGS operator innogy GS. Operationally unfavourable situations are addressed by the dispatch services of the transmission operator, DS distributors and the UGS operators according to the consumption in the region. In this context, stakeholders are trying to find a way out of increasing output capacity to the SMP zone.

Regulations (EU) no. 459/2017 and 1938/2017 do not mention any requirements for the capacity of gas storage facilities. Nonetheless, in the figurative sense, provisions contained in Regulation (EU) 2017/1938 concerning measures to safeguard the security of gas supply may be applied to the development of storage capacities. Traders may meet the standards at the regional level, or even at the level of the entire European Union. From the trader’s point of view, what is crucial is the price for the storage service provided. Market requirements for flexibility of gas supply provoked a reaction from UGS operators to improve the dynamic properties of storage facilities in the Czech Republic. It cannot be ruled out that traders’ price pressure on services provided by operators of storage facilities will result in shut-down of unprofitable storage facilities. This may also involve storage facilities situated on the territory of the Czech Republic.

Medium term horizon

On 6th of March 2017, an auction called Capacity4Gas was organized; where all the incremental facility on CZ–DE and CZ–SK profiles for the years 2020 up to 2039 was sold successfully. The expected increase in transit through the Czech Republic in the medium run is estimated at 30 to 40 bcm a year, which is de facto an increase by 100% compared to previous years. This will significantly strengthen the position of the Czech TSO in the Central European gas market. Therefore, the projects concerning gas pipeline between BTS Deutschneudorf and Přimda and net adjustment at BTS Lanžhot and Hora Svaté Kateřiny, as well as partial adjustments related therewith (mainline valves, stations), will most likely go ahead. The exit capacity from the transmission system to regional distribution systems is sufficient if the consumption remains at the current level. North Moravia, which is supplied through the DN 700 domestic transmission system line, the capacity of which is insufficient for the customers as well as for the market. One possible solution to the situation is the increase in output capacity for the region. At present, therefore, an optimal variant, in which way and by how much output capacity to increase, is sought.

The trend of increasing withdrawal capacity and optimization of operational flexibility of gas storage facilities will continue. In the following years, the withdrawal capacity of the storage facility in Dolní Dunajovice and the storage facility in Tvrdonice should be increased. After long-standing delays, the connection of the storage facility in Dolní Bojanovice to the Czech transmission system after 2019 is still in the pipeline and likely to happen. Given the market situation, commissioning of new storage capacities cannot be expected.  In the medium term, following the implementation of transnational gas pipelines, the market situation will remain highly volatile.

Long term horizon

Implementation of further transmission system projects, which have corridor pipelines assigned in local development plans, is uncertain. Due to the geopolitical aspects of the source part of the gas sector, development of larger pipeline projects will depend mainly on political decisions which are hard to predict. In view of the requirements for de-carbonization of the energy sector, lower utilization of high-emission fossil fuels and RES development, a higher level of gas consumption can be expected in order to secure ancillary services in the electricity sector. In the long term, in view of the potential increase in gas consumption and according to the calculations and analyses carried out, it would be advisable to put new capacities for gas storage into operation. This strategically important sector will most likely continue to be shaped by market motives rather than political ones. In the Czech Republic, there are several locations designated for gas storage which should be suitable for that purpose. From the current perspective, their utilization is rather unlikely. In the long term, increased extraction of conventional natural gas is not expected in the Czech Republic, but a larger part of the source base will comprise unconventional alternative resources, such as biomethane, synthetic methane or hydrogen. They will be injected primarily into high-pressure distribution systems the construction of which is now considered to be almost complete. Development will thus occur mainly at the technological level.