Germany has made Great Efforts to Secure its Winter Gas Supplies, and it has Finished ahead of Schedule.


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To ensure that households have enough fuel to keep their homes warm during the winter, European governments are rushing to fill underground storage facilities with gas supplies.

With only 20% of the agreed-upon volumes currently flowing through the Nord Stream 1 pipeline to Germany, Russia has drastically reduced its natural gas supplies to Europe.

Gas storage is not enough. Andreas Schroeder, head of energy analytics at ICIS, a commodity information service, stated that demand reductions are also necessary.

As Europe’s largest economy works to get ready for the upcoming winter, Germany’s natural gas storage facilities achieved a fill level of more than 75% this month, two weeks ahead of plan.

Germany’s gas storage facilities are currently slightly more than 77% full, according to the most recent data provided by industry association Gas Infrastructure Europe.

The initial goal of the administration of Chancellor Olaf Scholz was for gas storage levels to reach 75% by September 1st. The following federally required benchmarks are 85% by October 1 and 95% by November 1.

In order to have enough fuel to keep houses warm during the upcoming months, European governments are rushing to fill underground storage facilities with natural gas supplies.

In recent weeks, Russia substantially cut back on its natural gas exports to Europe; at the moment, only 20% of the agreed-upon volume of gas is flowing through the Nord Stream 1 pipeline to Germany.

Moscow assigns blame to poor and inefficient machinery. Germany, on the other hand, believes that the supply cut is a political ploy meant to increase energy prices and create unrest throughout Europe as a result of the Kremlin’s offensive against Ukraine.

At a press conference on Monday, Economy Minister Robert Habeck said, “Germany developed a business model that was largely based on dependence on cheap Russian gas and thus also a dependence on a president who disregards international law and to whom liberal democracy and its values are declared enemies. This model is no longer viable because it has failed.

The gas market operator in Germany, Trading Hub Europe, announced that gas prices would increase for all homes countrywide by over 500 euros ($507.3) a year at the time of his remarks.

Although there have been requests for Germany’s government to offer additional public relief, the new charge is intended to assist utilities in covering the expense of replacing Russian supply.

All actions have a cost, and this is undeniable, stated Habeck. “All actions have repercussions, and some are also burdens, but they make us less extortionable and enable us to choose our energy supply independently of Russia.

Uncertainty kills

With petrol prices on the rise, Europe is rushing to conserve enough fuel to survive through the winter. Rising energy costs are increasing household expenses, causing inflation to reach its highest point in decades, and reducing people’s purchasing power.

More over half of Germany’s gas purchases up until recently came from Russia. And the government is currently working to secure winter gas supply amid worries that Moscow may soon fully shut off the taps.

According to Marcel Fratzscher, president of the German Institute for Economic Research (DIW), “I think the chances are fairly excellent that Germany will reach to 90% storage capacity by the beginning of winter, but that still is not sufficient to actually avoid a gas crisis.”

Even if Germany survives the winter, a crisis might arise in the spring of the next year, so there is uncertainty, and businesses are worried, according to Fratzscher.

The economy is poisoned by uncertainty. We are witnessing a significant slowdown in the German economy as a result of businesses investing less and people spending less, he continued.

Gas storage is insufficient

Germany has been able to quickly fill its gas stocks in recent weeks, according to analysts, who spoke with CNBC. Among them are the robust supply coming from Norway and other European nations, the decline in demand despite rising energy prices, the transfer by enterprises from gas to alternative fuels, and the government’s provision of credit lines totaling more than 15 billion euros to restock storage facilities.

ICIS, a commodity information agency, head of energy analytics Andreas Schroeder told CNBC over the phone: “If you invest a lot of money then it is quite straightforward to fill the storage.

The German government is free to consider this a success if they so want. We’ll see, said Schroeder. However, Germany continues to perform worse than other nations like France or Italy. They increased the amount of storage they had without paying the substantial subsidies.

Germany’s “strategic disadvantage” relative to other significant European economies, according to Schroeder, can be attributed in part to the fact that Gazprom-controlled facilities previously possessed a portion of Germany’s gas storage.

This was the case, for instance, with Germany’s sizable Rehden storage facility, a location essential to the nation’s energy security.

Schroeder stated that “in other countries, [such as] France and Italy, you didn’t have this problem at the beginning,” and he is still doubtful that Germany would be able to meet the “very ambitious” 95% storage level objective by November.

“Gas storage is insufficient. Demand reductions are also necessary, according to Schroeder.

Last month, the European Union decided to cut back on its consumption of natural gas to counteract the possibility of more Russian supply restrictions. With voluntary actions, the proposed law is intended to reduce gas demand by 15% from August through March.

However, if insufficient savings are made, the 27-nation bloc would be forced to make mandatory cuts.


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