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NATGAS: a model of the European natural gas market

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  • Gijsbert Zwart
  • Machiel Mulder

Abstract

The NATural GAS model is an integrated model of the European wholesale gas market providing long-run projections of supply, transport, storage and consumption patterns in the model region, aggregated in 5-year periods, distinguishing two seasons (winter and summer). Model results include levels of investment in the various branches, output and consumption, depletion of reserves and price levels. The NATGAS model computes long-term effects of policy measures on future gas production and gas prices in Europe. NATGAS is an equilibrium model describing behaviour of gas producers, investors in infrastructure (pipeline, LNG capacity, as well as storage), traders and consumers. NATGAS covers the main European demand regions, including the United Kingdom, Germany, the Netherlands and Italy. Moreover, it covers the main origins of supply on the European market, such as Russia, Norway, Algeria, the Netherlands, the United Kingdom and LNG.In this memorandum, we first discuss the theoretical background as well as the model specifications. Afterwards, we describe the data we used, present some results and assess validity by computing sensitivities and comparing with current developments.

Suggested Citation

  • Gijsbert Zwart & Machiel Mulder, 2006. "NATGAS: a model of the European natural gas market," CPB Memorandum 144, CPB Netherlands Bureau for Economic Policy Analysis.
    • Handle: RePEc:cpb:memodm:144
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    7. Machiel Mulder & Gijsbert Zwart, 2006. "Government involvement in liberalised gas markets; a welfare-economic analysis of Dutch gas-depletion policy," CPB Document 110.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Gijsbert T.J. Zwart, 2009. "European Natural Gas Markets: Resource Constraints and Market Power," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 151-166.
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    14. Lise, Wietze & Hobbs, Benjamin F. & van Oostvoorn, Frits, 2008. "Natural gas corridors between the EU and its main suppliers: Simulation results with the dynamic GASTALE model," Energy Policy, Elsevier, vol. 36(6), pages 1890-1906, June.
    15. Veronika Grimm & Lars Schewe & Martin Schmidt & Gregor Zöttl, 2019. "A multilevel model of the European entry-exit gas market," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 89(2), pages 223-255, April.
    16. Stevie Lochran, 2021. "GNOME: A Dynamic Dispatch and Investment Optimisation Model of the European Natural Gas Network and Its Suppliers," SN Operations Research Forum, Springer, vol. 2(4), pages 1-44, December.
    17. del Valle, Aurora & Dueñas, Pablo & Wogrin, Sonja & Reneses, Javier, 2017. "A fundamental analysis on the implementation and development of virtual natural gas hubs," Energy Economics, Elsevier, vol. 67(C), pages 520-532.
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    19. Egging-Bratseth, Ruud & Baltensperger, Tobias & Tomasgard, Asgeir, 2020. "Solving oligopolistic equilibrium problems with convex optimization," European Journal of Operational Research, Elsevier, vol. 284(1), pages 44-52.
    20. Gijsbert Zwart & S. Ikonnikova, 2010. "Reinforcing buyer power: Trade quotas and supply diversification in the EU natural gas market," CPB Discussion Paper 147, CPB Netherlands Bureau for Economic Policy Analysis.
    21. Peixiang Jiang & Chao Ding & Zhiliang Dong & Sen Liu & Yichi Zhang, 2022. "Research on the Trade Characteristics of Conventional Energy Network Countries: Based on the Trade Characteristics of Leading Countries," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    22. Lise, Wietze & Hobbs, Benjamin F., 2008. "Future evolution of the liberalised European gas market: Simulation results with a dynamic model," Energy, Elsevier, vol. 33(7), pages 989-1004.
    23. Riepin, Iegor & Schmidt, Matthew & Baringo, Luis & Müsgens, Felix, 2022. "Adaptive robust optimization for European strategic gas infrastructure planning," Applied Energy, Elsevier, vol. 324(C).

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    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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