Benefits of the Baltic Pipe Project
The Baltic Pipe Project is expected to bring significant socioeconomic benefits to Poland, Denmark and other countries in the Baltic and Central & Eastern European regions. The project is fully in line with the corner stones of the EU Energy Policy for a secure, affordable and sustainable energy supply in Europe through the increased market integration, diversification of supply sources and high competitiveness.
Diversification of supply sources is essential for improving the security of the energy supply. The Baltic Pipe Project will contribute to a significant improvement in the diversification of supply sources in Poland, Denmark and the Baltic and the Central Eastern European regions. The entry of new participants to the Polish energy market will strengthen competition among the suppliers. The investment will contribute to improved security of supplies in Poland. The Danish gas markets will benefit from two new supply sources via direct access to both Norwegian gas and the global market for liquefied natural gas (LNG) through the Polish LNG terminal.
Improving the EU gas infrastructure
The Baltic Pipe Project contributes to the foundation of energy alliance of EU Member States in case of gas disruptions, and reduces the risk of supply shortages. The ‘gas crises’ experienced over the last decade have proven, that the natural gas markets in Central and Eastern Europe are highly fragmented, alienated and dependent on a single supplier.
A new supply corridor
Since the Baltic Pipe Project would provide an additional major gas supply route from the North, it will contribute to a fundamental change to the current architecture of gas flows in Central and Eastern Europe, historically devised to be one-way from the East to the West. This would provide the region with much needed diversification of not only gas supply sources, but also supply routes. Such diversification means more security of supply for natural gas end-users – both commercial enterprises and private households.
The Baltic Pipe Project will provide grounds for increased trade and stronger competition in the gas market.
Facilitating competitiveness and creating price convergence between regional gas markets is a key element in developing well-functioning and flexible gas markets. Most Central Eastern European gas markets are actually dependent on a single supplier without or with limited access to alternative supply sources. Consequently, there is no competition between suppliers on these markets, which makes natural gas less competitive as an alternative to other fossil fuels, e.g. coal.
Increased trade based on a stronger European network
The Baltic Pipe Project combined with other planned gas interconnections in the region could provide new trading opportunities for the countries within Central and Eastern Europe and the Baltic region as an additional supply source.
According to the Energy Policy for Europe, a fully competitive internal energy market can be achieved by building a pan-European integrated energy network, which would allow free movement of this commodity. Without sufficient cross-border capacities between countries and access to the diversified supply portfolio, it is impossible to create a single and flexible internal energy market.
Natural gas consumers may also benefit from the new gas supply source owing to reduced prices of that fuel.
With the addition of new supply sources in all countries involved, regional gas price differences are likely to be reduced for the benefit of end-users of natural gas. Moreover, the Baltic Pipe Project will allow gas transmission tariffs to be maintained at a low level. In Denmark, this will be an important factor in controlling and significantly lowering the future gas transmission cost in Denmark.
The Baltic Pipe Project can potentially promote the increased use of gas as a fuel for end-users and power generation, substituting the use of other fossil fuels, like coal, in Poland, Central and Eastern Europe and the Baltic region. Thus the project can reduce the CO2 emission.
Overall the Baltic Pipe Project can also support the integration of renewable energy sources such as biogas into the gas transmission system, if such demand arises.