Wednesday, December 8

Talking about energy security, data versus catastrophism

The economic recovery around the world is having a common denominator: extremely high volatility.

In this context, known to all, energy is once again in the center of all eyes. On the one hand, because we live in a situation of high energy prices that has a serious impact on industries and households, in short, on people’s lives. And on the other, and this is the most surprising part, this situation of volatility in the energy markets has led to talk of something that in the 21st century we considered unquestionable in developed societies and that is also vital for everyone: guarantee of energy supply.

Is there a real risk of a major blackout in our country? Could Spain run out of gas this winter? We have all read or heard questions and categorical statements on this matter lately.

As an engineer, I prefer rational and data-driven analysis. This is what I intend in this post: to review figures and objective facts that allow conclusions to be drawn.

In the field of gas, Spain’s infrastructure network has made Spain a European benchmark for decades due to the diversification of its supply. We have 6 operational regasification plants, which in 2020 received liquefied natural gas (LNG) from 13 different sources. Last year, LNG represented the 63% of Spain’s gas supply.

In addition, we have six international gas connections: two with Portugal, two with France, and two with Algeria through the Medgaz and Maghreb gas pipelines. It is the latter that, as is known, finalized on October 31 the contract by which Algeria supplied natural gas to Spain via Morocco. Algeria has guaranteed that it will continue to supply the gas that Spain needs through Mezgaz and, if necessary, increasing LNG deliveries through LNG tankers. Another fact to take into account: a ship from Algeria takes less than a day to reach the Spanish plants. Algeria for more than 30 years has been a reliable supplier for Spain.

More data:

• Spain has started the month of November with natural gas stored for the equivalent of 40 days of consumption.

• November has also started with a 65% more liquefied natural gas in the regasification plants of the Spanish Gas System and a capacity contracted in its tanks for this month of 95% -the maximum possible at the beginning of the month- compared to 57% that was contracted in November 2020.

• For December, with an auction still pending, the contracted capacity is already 77.41%, when last year it was 58.71%.

• If we look at the total of the winter season, from November to March, there are already awarded 136 slots for ship unloading in Spanish LNG plants. By comparison, 86 ships unloaded last winter.

• Regarding the underground storages, are already around 82% of its capacity.

Exceptional measures have contributed to these figures, in coordination with the Ministry of Ecological Transition and Demographic Challenge, at Enagás we have adopted prudence and prevention. Specifically, we have carried out two extraordinary auctions of slots for the unloading of LNG tankers, with the aim of making available to the companies that bring natural gas to Spain the maximum capacity in the country’s LNG plants. This will allow 45 more ships than those initially planned for a year to be able to unload at Spanish plants. A fact that helps to contextualize these magnitudes: in the world there are a total of 500 methane tankers available.

In short, and thanks to the anticipation measures adopted, the Spanish Gas System currently has some levels of contracted natural gas capacity higher than those of previous winters on the same date.

Therefore, and without attempting to underestimate the energy problems and of all kinds that currently affect the world economy, the data analysis points to a call for calm in the face of alarmist or even somewhat apocalyptic visions.

The pandemic has turned everything upside down and has also revealed that all our securities can be questioned, but this cannot lead to catastrophism as permanent and even paralyzing thought.

Sure there may be another pandemic, and a major cyberattack, and we’ve seen international trade collapse from a ship getting stuck in the Suez Canal, but widespread and baseless scaremongering is not justifiable unless we are screenwriters. . We deserve rigorous, data-driven analysis and not get carried away by sensationalism.

On the subject that has led me to write this post: with the situation today, and with the slot and capacity reservations already made by the trading companies, there are no objective indications of a lack of gas supply in the coming months.

Regarding electricity, the operator of the Spanish electricity market, Red Eléctrica, with whom we at Enagás are in permanent coordination, reported on Sunday, October 31 that the generation capacity of the Spanish mainland electricity system exceeds 107 GW of installed power. This is more than double that of any peak in demand that has occurred so far in Spain: the historical maximum, registered in December 2007, reached an instantaneous power of 45 GW, and the maximum of this year 2021, in January, exceeded slightly 42 GW. So is a big blackout possible? Based on these data, REE’s conclusion was clear: “There is no objective indication that suggests an event of such characteristics in our country.”

Spain is today better prepared energetically to face the winter than in the last three years, both in gas capacity reserves and in installed electrical power. Government, operators and marketers are doing our job and taking all the necessary measures to contribute to the security of supply in Spain. That’s the reality and everything else, based on the data we have today, is guesswork.