Low German gas levels threaten EU supply security as strategic reserve not ready – analysts

The unusually low gas storage levels in Germany pose a supply security risk for Europe this coming winter, as the country’s planned national strategic reserve won’t be ready, analysts have warned. “The expected shortfall in storage levels this winter will hamper Germany’s ability to contribute to Europe’s supply security,” Ira Joseph, a gas market expert at Columbia University’s Center on Global Energy Policy (CGEP), told newsletter Tagesspiegel Background.

Germany has the largest storage capacities for natural gas in the European Union, but facilities are not even 44 percent full – the lowest level at the start of July since 2021, when Russian gas company Gazprom still operated large storage capacities in the country and let them run low on the eve of Russia’s attack on Ukraine. The German economy ministry revealed plans for a state-owned strategic reserve for emergencies last week, but initial filling isn’t due to begin before next summer. The government cabinet is aiming for a decision on the plans in mid-August, and parliament could consider the proposal in late September at the earliest, reported public broadcaster ARD.

Germany’s neighbours are already unsettled by the situation. “In some European countries, there is concern about the low feed-in rate in Germany”, Joseph said, adding that Germany is a “weak link” in a scenario where exceptionally low temperatures push up demand. He said that climate change increased the uncertainty, as it could also bring about extreme cold spells in winter. 

Germany’s gas storage association INES warned last week that current market prices offer no incentive to top up reserves, which are depleted after a cold winter and because of the high prices due to the war in Iran, despite the official target of having them at least 80 percent full before the next winter. The lobby group said this could impact neighbours like Austria, the Czech Republic and Switzerland, who imported significant amounts of gas from Germany in recent years. 

In a tight supply situation during a very cold winter, compounded by supply disruptions, low storage levels would “reduce the flexibility of the European gas market as a whole”, INES told Tagesspiegel Background. “This could also jeopardise security of supply in other member states, particularly in closely interconnected markets.”

Germany is contractually obliged under bilateral and trilateral solidarity agreements to provide gas assistance to Austria, Switzerland, Italy and Denmark if they are in need, according to the publication. These deals are based on the EU’s Security of Supply regulation, which requires member states to provide mutual assistance in the event of shortages.The economy ministry did not provide a reply to the question whether the reserve would also serve to fulfil Germany’s international solidarity obligations.

Germany’s economy ministry has repeatedly dismissed concerns over low storage levels, arguing that supply security is assured, also thanks to imports via pipeline from Norway and several LNG import terminals in Germany. But experts have warned imports currently feed directly into use instead of supplies.

Germany’s planned national storage of 24 terawatt-hours spread across several sites is meant to cover total demand from households and businesses for 18 days during an average winter, according to documents seen by Tagesspiegel Background. But during an extreme winter, supplies would only last for 10 days.