Full gas storage and slightly falling wholesale prices: Has the gas situation eased at the (delayed) start of the heating period? Isn't everything going to be as bad as feared in the summer? One thing is certain: the German storage facilities are now well over 99 percent full. Theoretically, the amount of gas stored is sufficient for two winter months. Theoretically, because in addition to the gas withdrawals from the storage facilities, gas continues to flow into the German long-distance gas network, for example from Norway and soon probably also via the first liquefied natural gas terminals on the German coasts.
"In fact, the currently high storage levels throughout Europe, the relatively mild weather and reduced demand from industrial consumers are having an impact on the prices charged in the short and medium term," explains Lennart Richter from the industry association Zukunft Gas. Therefore, there is currently an oversupply of liquefied natural gas (LNG) in Europe. "Some ships can no longer be unloaded." However, Richter warns: "Overall, the situation can change quickly if the temperatures continue to drop."
According to Fabian Huneke from the consulting firm Energy Brainpool, retailers continue to expect a very expensive winter with wholesale prices of between 10 and 15 cents per kilowatt hour. "Ironically, in the very short term, since the storage facilities are full and consumption is not yet high, the market does not know what to do with the gas. At the same time, everyone knows that it will soon be cold and scarce."
For comparison: On Thursday afternoon, the price for natural gas to be delivered in December was 12.6 cents per kilowatt hour on the TTF trading platform. At the same time, February natural gas cost 13.4 cents per kilowatt hour. This is still many times higher than before: in 2019, before the start of the Corona crisis, the average annual import price at the German borders was 1.5 cents per kilowatt hour. 2021, when prices were already rising significantly in autumn, at 2.5 cents.
Wholesale gas prices are currently as low as they were last in June, and for short-term deliveries on the following day they are even significantly lower. However, the experts assume that this will hardly change anything in the prices for household customers. "Utility companies usually stock up on long- and medium-term supply contracts at predetermined prices," says Zukunft Gas Managing Director Timm Kehler. Only a certain proportion and short-term missing quantities are bought on the spot market at short notice.
"The current, short-term easing on the gas markets, which can very quickly turn into the opposite, has little impact on consumer prices," he says. Only when prices have been at a low level for months will this be reflected in household customers' gas bills.
According to energy economist Andreas Fischer from the Institute of German Economics, the additional gas volumes expected to flow to Germany this winter via the new LNG terminals will have a price-dampening effect. "Whether there will be an additional noticeable reduction in prices as a result of these imports will also depend on how demand develops in the winter months, which is heavily dependent on temperature developments," he says. And at the same time restricts: "Even if the first three planned floating LNG terminals are fully utilized, only about a quarter of the Russian deliveries to Germany from the past few years could probably be replaced." This means additional relief, but cannot compensate for the lack of deliveries from Russia.
According to the gas industry, a gas shortage can still be avoided: "Thanks to the government's determined crisis management, things are not looking bad at the moment," says Kehler. With a good storage filling, the fast construction of the LNG terminals and the savings achieved so far, one is in a good starting position. "In the end it will depend heavily on the cold of the winter and further discipline in reducing gas consumption."
