Germany currently in 'comfortable' position on gas supply security: regulator

Germany is currently in a "comfortable" position regarding its gas supply security, but demand reduction efforts are still needed to ensure there are no gas shortages this winter, the regulator Bundesnetzagentur said Oct. 20.

The regulator presented four scenarios for the upcoming winter, which differ depending on the level of imports and winter weather-related demand projections in Germany and its neighbors.

The scenarios, it said, had been recalculated since August given the improved market situation since then, in particular given the high level of gas storage stocks following government-mandated filling targets.

"The government's efforts to strengthen precautions during the energy crisis have paid off," the Bundesnetzagentur said.

"In particular through the state regulation on storage, the storage facilities were filled more quickly than expected," it said.

In addition, Germany has increased imports from its neighbors, including first flows from France and higher imports from the Netherlands and Belgium, it said.

Germany also plans to have three floating storage and regasification units operational by the turn of the year at Wilhelmshaven, Brunsbuttel and Lubmin.

"We are currently in a comfortable situation and have filled the storage sites more quickly than expected," it said.

"We're not there yet, but we've come a long way. We need continued gas savings to get us through the whole winter and to have a good starting point into the next," it said.

European wholesale gas prices have fallen sharply in recent weeks on healthy storage levels and lower demand.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price Oct. 19 at Eur115/MWh, down from the record high of Eur319.98/MWh in late August.

Storage levels

Germany reached its target of filling its storage sites to 95% of capacity by Nov. 1 early on Oct. 12 and sites continue to fill.

The 95% target was met, the regulator said, even without flows via Nord Stream since the end of August.

"Imports from the Netherlands, Belgium and in the last few weeks also from France are up. Germany benefits from the LNG import infrastructure in the Benelux countries," it said.

At the same time, exports out of Germany -- toward Austria, the Czech Republic and France -- have fallen sharply and are likely to be at a low level "for the time being."

"If you look at the current situation, Germany has only a slightly smaller amount of gas available than in previous years," the regulator said.

"The difference between the current imports and the current exports means 97 GWh/h are available domestically. Since gas is saved at the same time, gas consumption has also dropped."

Coming months

The regulator acknowledged, however, that it was likely that imports would fall and exports rise in the coming months due to heating-related gas demand across Europe.

It said this would lead to the delta of imports and exports becoming smaller and gas available to Germany reduced, based on which the regulator developed the four scenarios. All four scenarios assume a gas demand cut of 20%.

The regulator said that irrespective of the scenario, Germany is expected to start withdrawing gas from storage at the end of October as was the case in the past.

But, it said: "Since the current temperatures are mild and expected to stay mild for the rest of October, the extent of the withdrawals could be very small or even delayed."

The four scenarios point to how much gas would remain in storage depending on how cold -- and long -- the winter proves to be.

"If we continue to meet our savings target of at least 20%, three LNG terminals begin at the latest at the beginning of the year and the expected winter-related decline in imports and the increase of exports is moderate, then we make it through the winter without a gas shortage," it said.

"However, if there is a sharper drop in imports or a bigger increase in exports -- due for example to a severe winter in neighboring European countries -- there is a threat of gas shortage in Germany."