A rough examination of the value of gas storage

This paper studies the impast of a fire in 2006 which removed the possibility of access to the Rough gas storage facilities covering 80% of total UK storage, at a time when major withdrawals from storage would likely have taken place. Implicitly, it shows the value of such storage facilities, in a country with relatively little storage, where we might therefore see a considerable impact. We find that the major effect on activity was through an increased sensivity of supply to prices and an increased variance in this sensitivity, not through plysical shortages of gas

Efficient Mechanisms for Access to Storage with Imperfect Competition in Gas Markets

Scarce storage capacity and distortions in access to gas storage are considered causes of market foreclosure in liberalized gas markets. We consider rules currently adopted in Europe for storage rationing and propose efficient rationing mechanism based on the value of storage, when other flexibility inputs are available. Firstly we analyse productive efficiency issues neglecting vertical restraints and strategic behaviour in the final market. Then we assume imperfect compettion in the downstream market for gas supplies, given the avaialbility of storage capacity upstream. We consider effciency issues in a two stage model comparing regulated storage tariffs – coupled with a centralizedrationing mechanism – with storage auctions. Finally we consider as an optimal mechanism the allocation of storage arising from welfare maximization by a social planner. We find that it is usually optimal to maximize the amount of storage capacity allocated to new entrants in the gas markets. Storage auctions deviates from the optimal mechanism, but still improve efficiency, with respect to current mechanisms, to the extent that they allocate storage according to its value. Furthermore storage allocation appear to be an extremeley powerful mechanism to improve competition and efficiency in gas markets.Liberalization, Auctions, Essential Facilities

Gas Storage Valuation: Price Modelling v. Optimization Methods

The existence of a financial gas market motivates the analysis of gas storage as a separate asset, using the market value context for utilization and valuation. In the recent literature, gas storage is typically analysed within a framework with a simple one-factor price dynamics that is solved to optimality. We follow a different approach, where the market is represented by a forward curve with daily granularity, the price uncertainty is represented by six factors, and where we impose a simple and intuitive storage strategy that follows from repeated maximization of the intrinsic value. Based on UK natural gas market price data, we obtain the gas storage value using our approach, and compare with results from one-factor models as well as with perfect foresight. We find that our approach captures much more of the true flexibility value than the one-factor models. Our results indicate that the appropriate framework for analyzing complex assets like gas storage is a rich representation of the price dynamics combined with a simple and intuitive decision rule.Energy; uncertainty; flexibility; exercise strategy

The obligation of strategic gas storage introduced in Poland as an example of a public service obligation relating to supply security: a question of compliance with European law

This paper presents the system for the strategic storage of gas imposed by the Act on Fuel Reserves and evaluates its compliance with the relevant provisions of EU law, in particular the so-called 2nd and 3rd Internal Energy Market Packages. Unlike the case of legislation on strategic oil stocks, EU legislation on gas does not impose on Member States any obligation to maintain strategic reserves of gas. Furthermore, Member States are obliged to implement common rules establishing an internal market in natural gas including Third Party Access (TPA) to storage facilities. However, Member States are allowed to impose on undertakings operating in the gas sector, in the general economic interest, public service obligations which may relate to supply security, and EU law recognizes the contribution of gas storage to the security of supply. Thus, the objective of this article is to evaluate whether the Act on Fuel Reserves as well as the amendments to it proposed by the Polish Ministry of the Economy are in line with the relevant provisions of EU law. The analysis includes the position of the Court of Justice presented in several judgements as regards the concept of public service obligations.public services obligations, security of supply of natural gas, obligation of strategic gas storage, TPA to storage facilities

Theory of Storage: An Empirical Assessment of the European Natural Gas Market

We analyze the relation between European natural gas storage facilities and price patterns at major trading points, considering the theory of storage to derive a testable hypothesis imposed by the non-arbitrage condition. To model the efficiency of the natural gas market, we apply two indirect tests absent the scarcity of European inventory data. We find that operators of storage facilities realize seasonal arbitrage profits, and that market performance overall is substantially distinct from the competitive benchmark.Storage, energy commodity, natural gas, convenience yield

Method for retarding dye fading during archival storage of developed color photographic film

Dye fading during archival storage of developed color photographic film is retarded by placing the film in a sealed, opaque vault, introducing a dry, pressurized inert gas into the vault while the latter is vented, and sealing the vault after the air within the vault has been purged and replaced by the inert gas. Preferably, the gas is nitrogen; and the vault is stored at a temperature below room temperature to preserve the color photographic emulsions on the film contained within the vault. For short-term storage, sodium thiocyanate pads charged with water are placed within the vault. For long term storage, the interior of the vault is kept at a low relative humidity

Opportunities for large-scale energy storage in geological formations in mainland Portugal

This article presents the methodology and results of the first screening conducted in Portugal to identify geological formations suitable for large-scale storage of energy from renewable sources. The screening focused on the identification of adequate porous media rocks, salt formations and igneous host rocks that could act as reservoirs for gas (hydrogen or methane) storage, Compressed Air Energy Storage, Underground Pumped Hydro and Underground Thermal Energy Storage. Public access geological information was collected, compiled in a database and spatially referenced in a GIS environment. The GIS and database were cross-checked with criteria for selecting geological reservoirs and with existing or anticipated spatial, environmental and social constraints. In a third step the feasibility of deploying each large-scale energy storage technology in each prospective reservoir was assessed and classified according to confidence, ranging from unlikely to proven, and to proximity to areas with wind or solar energy potential, accessibility to power transmission lines and natural gas networks. The outcome is a first screening of priority sites to be studied at the local scale in future projects. Early target for detailed studies are the existing salt caverns and an abandoned salt mine in the Lusitanian Basin. Natural gas storage in salt formations is being carried in the region for decades, proving the adequacy of the salt formations and demonstrating the social acceptance. Porous media aquifers in the same Lusitanian basin may also hold an interesting potential, although there is considerable uncertainty due to the scarcity of geological data about deep aquifers. The Sines industrial cluster, in SW Portugal, is another interesting target area, due to the existence of a host rock with proven containment capacity. The technologies with the best potential for application in the Portuguese geologic context seem to be CAES and Underground Gas Storage linked to Power-to-gas projects

A Rough Examination of the value of gas storage

This paper studies the impast of a fire in 2006 which removed the possibility of access to the Rough gas storage facilities covering 80% of total UK storage, at a time when major withdrawals from storage would likely have taken place. Implicitly, it shows the value of such storage facilities, in a country with relatively little storage, where we might therefore see a considerable impact. We find that the major effect on activity was through an increased sensivity of supply to prices and an increased variance in this sensitivity, not through plysical shortages of gas.

Some numerical methods for solving stochastic impulse control in natural gas storage facilities

The valuation of gas storage facilities is characterized as a stochastic impulse control problem with finite horizon resulting in Hamilton-Jacobi-Bellman (HJB) equations for the value function. In this context the two catagories of solving schemes for optimal switching are discussed in a stochastic control framework. We reviewed some numerical methods which include approaches related to partial differential equations (PDEs), Markov chain approximation, nonparametric regression, quantization method and some practitioners’ methods. This paper considers optimal switching problem arising in valuation of gas storage contracts for leasing the storage facilities, and investigates the recent developments as well as their advantages and disadvantages of each scheme based on dynamic programming principle (DPP

Sealed battery gas manifold construction Patent

Sealed electric storage battery with gas manifold interconnecting each cel