The year 2016 – Review and outlook

I hope that you all had a good start to the new year. Traditionally, the first edition of the year starts with a look back on past the year and a look forward to the events in the next twelve months. One event will already have occurred by the time you have this edition on your desk. On December 21, the BNetzA Ruling Chamber (BK 7) sent its Konni 2.0 Ruling to the market area operators. However, it will not publish it before the operators have had the opportunity to blacken business secrets. The conversion system and its amended regulation was one of the most important topics in 2016. This year, the market participants have to cope with the implementation of Konni Gas 2.0 and the impact on their gas position. What still irritates me personally is that I cannot see any logic in the observable virtual conversion behaviour. And none of the people I discussed it with provided a sound explanation (“we don’t understand it either”). This creates unease.

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Topic of the Month: The year 2016 - Review and outlook

What happened in 2016?

Exactly a year ago ener|gate Gasmarkt reported here under the headline “Energiewende and decarbonisation” about the metamorphosis from the “Stromwende” (power market transition) to an Energiewende. With a bit of self-praise, it is fair to say that this was almost a bit premature but perceptive. The accompanying discussions became much more intense in 2016. The Conference of Nations in December 2015 in Paris was the main turning point. Agreement to do the utmost to limit global warming to two degrees – or even better 1.5 – since the beginning of industrialisation has intensified political thinking in Germany on the proper strategies for a carbon- free energy, heating and transportation sector (the remaining carbon budget is needed for agriculture and some industrial processes). The Climate Protection Plan 2050 is the intermediate outcome of this thinking. The discussions have demonstrated the potential fundamental change of economics and society that could be a consequence of a carbon free world. The most favourable example of ener|gate Gasmarkt’s is the following proposal from the first circulating draft of the plan, dated April 2016: “Until 2050, meat consumption should be halved”. Of course this idea did not make it to the final version. But more seriously: Electro mobility means cars without carburetor and without valves. That could be the end for most of an industry that supplies parts for the automotive industry today. The German heartland of the automotive industry, Baden-Wuerttemberg, may become the successor of the currently poor Mecklenburg- West Pomerania by 2050.

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Topic of the Month: The year 2016 - Review and outlook

What will be?

On January 1 the amended paragraph 19a of the German energy law will be in place. It prescribes a single nationwide contribution for the market region conversion from L-gas to H-gas. And it stipulates some other new regulations for the conversion process (ener|gate Gasmarkt 09/16). The BNetzA Ruling Konni Gas 2.0 should be published in January at the latest. Everything except an “ex ante” fee with a cap at 0.45 euros/MWh would be a surprise although some market participants are betting on an ex post fee. The Network Development Plan 2016 is also not yet published and overdue. From January 24 to 26 the usual get-together of mainly managing directors and executive board members will take place at the Handelsblatt- Jahrestagung Energiewirtschaft in Berlin. Presumably Sigmar Gabriel will give his last speech as minister of economics and energy at this industry event. At least he is a very entertaining speaker. Industry members that are more interested in gas topics should rather attend the European Gas Conference that will take place almost at the same time (January 23 to 25) in Vienna. Among others, the general director of Gazprom Export, Elena Burmistrova, will give a presentation.

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