The REPowerEU initiative, which aims to reduce dependence on Russia through alternatives such as LNG, represents a paradigm shift for Austria's gas supply. This is happening because of a political reorientation and is primarily not due to a market reaction. With the current focus on LNG, the issue of national security of supply is also coming to the fore for Austria due to its geographical location as a landlocked country. On the one hand, the contractually secured purchase of sufficient LNG volumes plays a role here; on the other hand, it must be possible to physically transport these volumes to Austria via the European gas grid, either for consumption or for the purpose of storage, if Russian natural gas is completely eliminated. As Austria's transmission system operator, it is our task to identify transport options and develop corresponding projects that enable imports from alternative sources and thus contribute to maintaining security of supply. In our view, the following projects are the most promising in order to diversify supply routes to Austria in the sense of REPowerEU.
"WAG Loop" - in many respects a promising project
Medium-term - possibility to diversify sources and strengthen security of supply
Diversification of sources: The West Austria Gas Pipeline "WAG" runs from the Slovak-Austrian bor-der through Lower Austria and Upper Austria to the Austrian-German border. It currently consists of a continuous pipeline and another pipeline, which is mostly parallelised ("looped") but not continuously. Both lines are operated in both directions. The realisation of the "WAG Loop" project would mean the completion of the non-continuous WAG pipeline (approx. 100 km), which could enable a considerable additional supply of LNG landed in Northwest Europe and/or North Sea gas via Germany to Austria. Due to the existing LNG terminals in Northwest Europe, the planned construction of LNG terminals in Germany in 2023 and the access to North Sea gas, there is great potential for an alternative gas supply from this direction in the medium term. Increasing the capacity of the WAG by means of the "WAG Loop" would also have the potential to meet the recently increased demand for capacity from Germany to Austria. The coordinated, cross-border network development planning will further investigate the corresponding potentials, also on the German side.
Strengthening security of supply: Also with regard to the intended connection of the Haidach gas storage facility to the Austrian gas grid, the realisation of the project is a prerequisite to enable additional capacities for the secured filling and withdrawal in and from this storage facility as well as the onward transport to the Austrian market area.
Long-term - preparation of the European Hydrogen Backbone (EHB)
At the same time, the realisation of the "WAG Loop" will pave the way for bringing significant quanti-ties of (green) hydrogen to Austria in the future and additionally distributing it to consumers in southern Germany. With the construction of a parallel pipeline system, both energy sources, natural gas and hydrogen, would then be transportable in the grid at the same time. This represents a decisive advantage for the ramp-up of a future hydrogen market. With the "WAG Loop", hydrogen can then be brought to Austria either from North Africa via Italy or via Romania or Ukraine and transported to neighbouring consumer countries. This will create the prerequisites for the hydrogen supply corridors outlined in the "EHB" study, especially for the "North Africa & Southern Europe" and "East and South-East Europe" corridors. This would also make it possible to supply industry in the Linz area and the Schwechat refinery with renewable energy.
Further possibilities for diversifying the routes
The project "Entry Murfeld" makes it possible to supply Austria alternatively with LNG from Croatia (terminal in Krk) via Slovenia. In addition to a substantial expansion of the LNG terminal in Krk, this would also require infrastructure adjustments in the neighbouring countries to enable cross-border transport in the south-north direction. This project will also be designed to be hydrogen-compatible, so that it can also make an important contribution to the decarbonisation of the energy system and the creation of a European hydrogen network.
Other projects for the possible diversification of supply routes are "CZATI" and "Entry Mosonmagyaróvár". CZATI creates the first (bidirectional) direct connection between Austria and the Czech Republic at transmission level. An alternative source could be LNG from Poland, for example. With Entry Mosonmagyaróvár", Austria could strengthen the connection capacities from Hungary to Austria. For example, this could allow Black Sea gas to reach Austria. For CZATI and Entry Mosonmagyaróvár, the next step will be to hold auctions for new capacity on 4 July 2022. Market participants will have the opportunity to submit their long-term binding capacity demand. If there were sufficient binding bookings and a positive economic viability test, the respective project would be realised. However, this is not to be assumed for the following reasons.
Investments in security of supply instead of market demand
Due to the current competitive pressure and the lack of prospects (phasing out natural gas in the long term), the market does not solve security of supply issues. In order to enable the desired diversification quickly, it is important to replace the lack of market demand when financing the necessary projects. Therefore, Austrian gas infrastructure projects, such as the "WAG Loop", should be taken into account in the European framework, e.g. REPowerEU, or in the preparation of the next Union list of projects of common interest (PCI), in order to qualify for potential European funding opportunities. Nationally, too, the targeted support of infrastructure projects, e.g. in the form of subsidies or recov-ery guarantees for the capital invested, is not only welcome, but even necessary in our view.
Even with decreasing demand for natural gas and the pursuit of further REPowerEU measures, such as doubling EU biogas production to 35 bcm per year by 2030 or increasing energy efficiency measures, a diversification of sources will be absolutely necessary for the next two decades if the intention is to continue to renounce Russian gas. Investment and rapid action will therefore be necessary in this area.