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Natural Gas Supply: No Need for Another Baltic Sea Pipeline

Author

Listed:
  • Anne Neumann
  • Leonard Göke
  • Franziska Holz
  • Claudia Kemfert
  • Christian von Hirschhausen

Abstract

The construction of a second Baltic Sea natural gas pipeline from Russia to Germany (Nord Stream 2) is very controversial for political, energy economic, and ecological reasons. The project owner and some European energy companies argue that it is a profitable, private-sector investment project that is necessary to secure natural gas supplies for Germany and Europe. However, DIW Berlin analyses show that the planned pipeline project Nord Stream 2 is not necessary to secure natural gas supplies for Germany and Europe. The energy consumption forecasts on which the project is based, especially the EU Reference Scenario, significantly overestimate natural gas demand in Germany and Europe. On the supply side, there will be no supply gap if Nord Stream 2 is not built. Different profitability studies suggest that high losses up to the billions can be expected from the project. It is also unclear to what extent Nord Stream 2 would lead to higher prices for natural gas customers in Germany.

Suggested Citation

  • Anne Neumann & Leonard Göke & Franziska Holz & Claudia Kemfert & Christian von Hirschhausen, 2018. "Natural Gas Supply: No Need for Another Baltic Sea Pipeline," DIW Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 8(27), pages 241-248.
    • Handle: RePEc:diw:diwdwr:dwr8-27-1
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.593663.de/dwr-18-27-1.pdf
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    Citations

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    Cited by:

    1. Christian von Hirschhausen & Claudia Kemfert & Fabian Praeger, 2020. "Fossil Natural Gas Exit – A New Narrative for the European Energy Transformation towards Decarbonization," Discussion Papers of DIW Berlin 1892, DIW Berlin, German Institute for Economic Research.

    More about this item

    Keywords

    natural gas; pipeline; Nord Stream 2; Russia; Germany; Europe;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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