Moody’s highlights uncertainty in Europe’s gas grids

By Andreas Walstad 15 June 2017
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Gas pipelines in Germany. A report by Moody’s has said renewables could make gas grids obsolete. (E.On) Gas pipelines in Germany. A report by Moody’s has said renewables could make gas grids obsolete. (E.On)

The decarbonisation of Europe’s energy sector could make gas grids obsolete in the long term, a scenario that raises questions about future investment and remuneration levels, ratings agency Moody’s said in a report released this week.

"Decarbonisation calls into question the long-term use of fossil fuels, including natural gas, and hence the future of existing gas transmission and distribution networks," the report said. "With few exceptions, gas networks are mature, with modest investment needs, but decarbonisation poses questions around their long-term use. Considerations of remaining useful asset life may influence regulatory remuneration cycles as well as investment decisions, and network operators with very long-dated debt are exposed to asset stranding risk," it added.

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