Concerns that Germany, against the backdrop of rising natural gas prices, could face a shortage of “blue fuel” in winter are unfounded. This follows from a statement by the country’s Ministry of Economic Affairs released on Thursday, August 20. "Based on the information available at the moment, a gas shortage in the coming winter is not expected," the document says, as quoted by the dpa agency.
Low levels of gas storage in Germany
The statement says the German government takes seriously the fact that the level of gas in storage this year is significantly lower than in previous years. "At the same time, the reliability of energy supply is indicated not only by the fill level of gas storage facilities," the German Ministry of Economic Affairs points out. "Gas is supplied, among other things, via pipelines from Norway, LNG import terminals for liquefied natural gas (LNG), and from neighboring European countries," they remind there.
However, as the ministry notes, a low fill level limits the ability to cope with unusual situations that arise first and foremost when several difficulties occur at the same time: "For example, when a prolonged cold snap coincides with malfunctions in infrastructure for importing gas or with disruptions on the international LNG market."
To meet average winter gas demand, Germany—taking into account its import capacity—according to calculations by the country’s Ministry of Economic Affairs—will be able to do so if its storage sites are filled to 60–70%. As of today, the fill level of gas storage facilities in Germany stands at 50%.
War in Iran and rising gas prices
Because of the war between the United States and Israel against Iran, which has been ongoing since February 28 this year, and the resulting blockade of the Strait of Hormuz, gas prices surged during the summer. As a result, the companies trading in gas are not in a rush to buy large volumes of blue fuel for the winter. "A tense market situation with high prices is not yet a crisis caused by insufficient supply," the German Ministry of Economic Affairs assures.
From the perspective of the ministry led by Friedrich Merz’s Christian Democratic Union (CDU) colleague, Katherina Reiche, responsibility for ensuring reliable energy supply lies to a large extent with private companies. "Ensuring the country has gas during the winter is essentially the task of gas trading companies," the ministry says, adding that state intervention would bring additional risks.
Possible risks from state intervention
"The government’s purchase of gas could create additional demand, which would drive up prices and push private companies that build up gas reserves out of the market. Moreover, there is a risk that market participants will in future rely on the fact that the government will always step in to save the situation in the event of a low storage fill level," the document says.
Despite this, the authors say the German government is preparing measures it could quickly and purposefully resort to if the situation worsens. The statement from the German Ministry of Economic Affairs indicates that it is closely monitoring the fill level of gas storage facilities, the volume of gas imports, the availability of LNG, the situation surrounding infrastructure, demand, and conditions in neighboring European countries.
The German Federal Association of Energy and Water Supply Companies (BDEW) also believes the country should not be afraid of a gas shortage in the coming winter. "Selling and supply companies are fulfilling their contractual obligations," emphasized the association’s head, Kerstin Andreae.
On its part, the head of the Federal Association of Consumer Organisations (vzbv), Ramona Pop, warned that prices for consumers are expected to rise amid low levels of gas storage fill. "We are closely monitoring the fill level of gas storage facilities and see that problems could arise in winter. Wholesale gas prices are rising significantly since the beginning of the war in the Middle East," Pop said in an interview with the Rheinische Post published on August 19.