Germany, the largest economy in the European Union, has not reached its gas storage goal for the start of the winter season and has only filled 61% of its storage capacity. Meanwhile, all EU member states are required to ensure 80% of their storage capacity before winter. As the largest gas consumer in the EU, Germany faces challenges that could lead to serious problems in the summer season.
Challenges Facing Germany
Reports indicate that gas prices in the European market have risen above 100 euros per megawatt-hour (MWh), and this situation could worsen. Predictions suggest that Germany may face a serious gas supply shortage due to the failure to fill gas reserves. The German Gas Storage Association (INES) announced in September that under the current pace of liquefied natural gas (LNG) purchases, Germany could only fill up to 77% of its capacity by November 1.
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Necessary Actions for Gas Supply
The CEO of INES, Sebastian Heinemann, emphasized that the failure to achieve storage goals indicates a need to ensure storage levels in future winters. He also called for requirements for gas suppliers. In contrast, Klaus Müller, head of Germany's energy market regulator, believes that achieving storage goals is no longer essential for gas supply, and immediate LNG purchases during winter could guarantee gas supply.
In this situation, gas prices have surged, and this trend is expected to continue. The TTF contract for December 2026 and January 2027 is trading above 100 euros per MWh. This situation indicates that gas traders do not expect positive political developments or a sudden increase in LNG supply to the market.
This gas storage crisis has put Germany in a difficult position. The country may have to resort to coal purchases to ensure its energy supply during the summer season. Reports indicate that rising gas prices have forced many companies to revert to coal, which has once again become a profitable fuel despite high carbon costs.
Ultimately, Germany faces significant challenges. The country must decide whether to continue purchasing gas at higher prices or revert to coal purchases to ensure its energy supply during the summer season. Both options seem difficult for the German government, which is committed to greenhouse gas reduction targets. Additionally, forecasts suggest that this winter will be colder than usual in Germany, which could put further pressure on the country's energy system.
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