Marta Margarit Borras – Secretary General, Spanish Gas Association (SEDIGAS)
The secretary general of the Spanish Gas Association (SEDIGAS) elaborates on Spain’s role in decarbonizing Europe’s economies, highlights the country’s sophisticated gas infrastructure and gives her opinion on the currently halted Midcat project.
You have been Secretary General of Sedigas since 2008. Could you please begin by introducing to our international readers your current mandate and the mission of the association?
“Algeria supplies 58 percent of the domestic natural gas demand of our country, Spain, whose regulations foresees a maximum quota of 60 percent demand coverage per supplier.”
The association was established in 1970—just one year after Spain received its first LNG shipment—and it groups all companies working along the gas value chain. It was created with the aim of promoting and fostering gas to become the key element of the Spanish energy matrix. The deregulation of our market began in 2002 and full deregulation was achieved in 2008. The process was a smooth transition despite its rapid deregulation in only six years. Therefore, today’s main mission is to establish natural gas as the key element of future energy use; a mission far from limited only to Spain! Across Europe, governmental bodies, trade organizations and associations have the common vision of decarbonizing the economy and natural gas is recognized as a source of energy able to achieve this goal on a pan-European level.
Natural Gas is a non-pollutant and clean source of energy and a perfect partner to renewable sources of energy. We adopt the same strategy as Eurogas, which is based on decarbonizing the economy, reinventing current energy systems, increasing energy efficiency and fostering internal marketing while benefitting all stakeholders involved. Large-scale use of natural gas could secure immediate CO2 emission reductions on an economic basis and we share this knowledge with many equivalent organizations across Europe. Together, we are all promoting the use of natural gas in line with these aims and values.
How would you characterize the importance of the gas sector to the Spanish economy and how would you assess Sedigas’ current relations with the Spanish regulatory authorities?
Our 170 member companies are comprised of MNCs as well as SMEs, almost all companies working across the natural gas value chain. As such, we represent a vital part of the domestic economy. If a larger MNC decides to invest in a specific area of Spain for instance, this specific area will benefit immensely due to all the investments that will be placed there. In terms of numbers, that means that our sector generates 0.5 percent of Spain’s GDP and employs approximately 150,000 staff domestically. The relevant authorities are aware of the significance of this sector and recognize us as the body representing the interests, needs and opinions of the entire sector. Thus, the authorities and relevant decision makers acknowledge and listen to us whenever we need to communicate.
What are the specificities and areas of excellence that Spanish companies, including your members, bring to gas projects abroad?
Spain’s natural gas sector is comparatively young as it only started here some 45 years ago. Nevertheless, we have significant experience in the business. From an energy point of view, Spain is a genuine island and we had to build up a self-sufficient network in a short period of time which we successfully did. The rapid establishment of the sector within Spain showcases how we embraced this new sector and developed fully fledged expertise competitive on an international level. Today, we have one of the best networks in all of Europe; six of the 20 European regasification plants are located in Spain.
Spain stands out within Europe as it is not relying on Russia to meet its gas needs, but countries like Algeria and Qatar. Today, which countries are Spain’s main sources of supply and how much of the imported gas is in the form of LNG?
Algeria supplies 58 percent of the domestic natural gas demand of our country, Spain, whose regulations foresees a maximum quota of 60 percent demand coverage per supplier. Other suppliers include countries such as Nigeria or Trinidad & Tobago, the natural gas of whom is usually delivered via methane shipments. In 2016 we received gas from ten different suppliers but this figure varies yearly depending on the contracts made. Nonetheless, typically half of the Spanish natural gas is delivered by pipeline and the other half is imported via LNG.
Despite spectacular growth in the last decades from two percent in 1985 to 19.9 percent in 2015 according to data from the Ministry of Industry, Energy and Tourism, the penetration rate of gas in Spanish homes stands at 30 percent against an EU average of 50 percent. What can be done to increase the share of gas in Spain’s energy matrix?
Natural gas as an energy source is comparatively new in Spain and we are competing against electricity. In Spain, both electricity and water are basic services, which means every new house to be built must install the appropriate facilities to receive these basics services. As natural gas is not categorized as a “basic service”, installing the needed connection would increase the costs of building that house. In the end, it is all about raising awareness and building relationships with construction companies. We work a lot with these companies and the local authorities hand-in-hand to promote the use of natural gas.
Five months in, what insight can you give us into the October 2016 launch of the MIBGAS “new gas market” PVB? What has been SEDIGAS’s contribution and what are your expectations?
Sedigas was involved in the regulation process of the The Organised Gas Market on the Iberian Peninsula until the royal decree was issued. MIBGAS S.A. is the company responsible for the management of the Spanish Gas Hub trading platform, which started to operate in late 2015. One year later, natural gas transactions and players have increased significantly and more than 45 suppliers have joined the hub, which is a good start. At the moment, we are awaiting its further development and we are confident that the project will be a success and will unfold its full benefits for the entire Spanish gas sector. In the future, we would like to see the Spanish territory become a new gas hub and MIBGAS will definitely help achieve this objective.
Within a rapidly changing global and regional energy security landscape, Spain stands poised to capitalize and establish itself as a key protagonist. What would you highlight as the country’s main strengths and assets in establishing itself as a guarantor of European energy security?
We position ourselves as a gateway for gas into Europe. To any country in this world, ensuring energy supply security is of utmost significance. To achieve this goal, countries need to diversify their sources of energy and the suppliers of energy. To this respect, it should be noted that the major gas suppliers to Europe are currently Norway and Russia -in the latter case, pipelines run through politically unstable countries such as Turkey or the Ukraine. Spain can be a genuine alternative as not only are we completely stable but we also source gas from over ten different countries and we have six regasification plants.
Right now, we need a connection by pipeline through France all the way to Germany to realise this ambition which would benefit not only Spain but all of Europe. Hence, the Midcat project was started in 2012. It is a projected gas pipeline that will eventually link the Spanish and the French natural gas systems through the regions of Catalonia and Midi Pyrénées. The laying of the first 87 kilometres stretch of the gas pipeline –from Martorell to Hostalric— was carried out already, but the project was then set in stand-by due to a lack of interest from the French government, and despite being granted “project of common interest” status by the European Union.
In addition, Spain has the required infrastructure to become a LNG hub and to play an important role in the international natural gas trade, thanks to its six operating regasificacion plants and almost 14.000km of transmission pipeline. Besides, the major international energy companies are already operating in Spain.
Conversely, where does Spain lag behind on the road to becoming a major figure in European energy security?
Right now, a lot of responsibility lies on France rather than Spain. We have the full support of the European Commission as everybody—except France—realizes and understands the benefits that the Midcat project will bring to the European community and its economies.
Do you have any message you would like to be heard around the world?
Spain’s gas sector is growing rapidly and will play a key role in decarbonizing the economies of Europe. Everybody is working towards this goal and we are there to help. Moreover, we work on achieving cleaner air in our cities as well.
Gas is the cleanest of fossil fuels and we work on achieving more cars, public transport, ships and even trains fuelled by natural gas. Engines fuelled by natural gas produce near 0 NOx emissions and PM particles, both responsible for the urban air pollution to a great extent. That is the reason why the Eco environmental badge was recently issued by the Spanish Department for Transport to natural gas vehicles, whose drivers are already allowed to travel under any circumstance, regardless of any environmental alert in any Spanish city. As for maritime transport, vessels anchored in ports have great impact on cities’ pollution and LNG liquefied natural gas ships are definitely the best alternative, particularly when it comes to improving the quality of the air we breathe.
Finally, natural gas heating, cooling, and ventilation equipment for houses, blocks and all sort of public facilities and private buildings should also be mentioned as part of the solution to the air quality problem.
There is little doubt that the potential and opportunities that gas has for Europe’s economies is tremendous, and Spain will be at the forefront of developments.
Do you think Spain’s commitment to renewables provides a favourable environment for the promotion of gas?
The reality is that renewable technology is not yet advanced enough to be in every household. Nonetheless, the newest regulation says that all new households in Spain must be connected to a double system which allows the inflow of renewable energy and another for backup. That a backup is mandatory just shows that renewables are not advanced enough; gas on the other hand is! We are already there; the technology is already sophisticated and matured enough to offer a solution to every household. Both on household and on the generation mix, gas is the natural partner to renewable energy, granting the energy supply whenever is needed.