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The EU has high ambitions for its clean energy transition. Reducing yearly CO2emissions by 80% until 2050 requires large-scale implementation of renewable energy technologies and likely a large-scale electrification of non-energy sectors such as transportation. A major challenge imposed by renewable energy supply is the uncontrollable and intermittent nature of generation. Large flexibility volumes and capacities are needed to manage an energy system with high shares of renewables. Norway, with a large hydropower base and flexibility potential in its offshore natural gas transmission grid, can support the EU clean energy transition by providing much needed flexibility and controllability. This will require expansion of hydropower production and transmission capacity as well as altered management of gas export pipelines. To make these flexibility options available, market participants must be incentivized by new market designs and instruments that place higher value on flexibility and controllability.

We present a new model to support strategic planning by actors in the liquefied natural gas market. The model takes an integrated portfolio perspective and addresses uncertainty in future prices. Decision variables include investments and disinvestments in infrastructure and vessels, chartering of vessels, the timing of contracts, and spot market trades. The model accounts for various contract types and vessels, and it addresses losses. The underlying mathematical model is a multistage stochastic mixed-integer linear problem. Industry-motivated numerical cases are discussed as benchmarks for the potential increases in profits that can be obtained by using the model for decision support. These examples illustrate how a portfolio perspective leads to decisions different than those obtained using the traditional net present value approach. We show how explicitly considering uncertainty affects investment and contracting decisions, leading to higher profits and better utilization of capacity. In addition, model run times are competitive with current business practices of manual planning.

This paper presents results of simulating a more collusive behavior of a group of natural gas producing and exporting countries, sometimes called GASPEC. We use the World Gas Model, a dynamic, strategic representation of world gas production, trade, and consumption between 2005 and 2030. In particular, we simulate a closer cooperation of the GASPEC countries when exporting pipeline gas and liquefied natural gas; we also run a more drastic scenario where GASPEC countries deliberately hold back production. The results show that compared to our Base Case, a gas cartel would reduce total supplied quantities and induce price increases in gas importing countries up to 22%. There is evidence that the natural gas markets in Europe and North America would be affected more than other parts of the world. Lastly, the vulnerability of gas importers worldwide is further illustrated by the results of a sensitivity case in which price levels are up to 87% higher in Europe and North America.