The federal government wants to create a gas reserve as a crisis prevention instrument. Which scenarios should gas customers be protected from – and how much it will cost them.
The federal government is planning to build up a gas reserve. Photo: Peter Kneffel/dpa
Berlin. A national gas reserve is intended to hedge supply risks in the future. It is planned as “crisis preparedness” - for extreme cases or sabotage. The reserve is to be financed through a levy. It is expected that the cabinet will introduce a bill from Economics Minister Katherina Reiche (CDU) this Wednesday. What it's about:
What is the goal of the gas reserve?
“The gas reserve serves to secure the gas supply if there would otherwise be a threat or imminent gas shortage,” says the draft law. The reserve is intended to hold “additional” quantities of gas. The gas reserve should only be used as a crisis prevention instrument in specific, exceptional cases. The reserve should be able to be used by the Federal Network Agency in the event of an emergency level in order to avoid supply bottlenecks.
Minister Reiche had mentioned crisis situations in which energy flows to Germany were disrupted. According to the draft law, the use of the gas reserve is intended to prevent the supply of industrial customers from being switched off or temperature specifications from having to be imposed for public and private buildings. The reserve is to be built up towards winter in 2027, gradually over several years.
What is the size of the reserve?
The gas reserve is said to have a volume of 24 billion kilowatt hours - that would correspond to around ten percent of Germany's storage capacity. For this target volume, the failure of the most important import infrastructure for a period of 30 days was taken into account. This amount of gas should also cover other scenarios, as the draft states:
20 days loss of all Norwegian pipeline imports,
40 days of failure of the liquefied natural gas (LNG) terminals in Germany,
Ten days of full supply to households and businesses in the event of a failure of all imports due to the demand of an extremely cold winter and
18 days of full supply to households and businesses in the event of a failure of all imports given the demand of a normal winter.
How high will the levy be?
The gas reserve is to be financed through a levy for gas customers - but this is quite controversial in the CDU/CSU and SPD government factions. The first “allocation period” is scheduled to begin on October 1, 2027. The draft bill estimates the consequences: For a typical household in a multi-family house with an annual consumption of around 13,000 kilowatt hours or a typical household in a single-family house with an annual consumption of 20,000 kilowatt hours, this means annual costs of between 3.77 euros and 7.20 euros. As a result, gas procurement costs increased by 0.3 to 0.4 percent.
The total costs are estimated at 247 to 308 million euros per year. Around 40 percent of them would be borne by household and commercial customers and around 60 percent by industrial customers.
Criticism of the levy came from the Association of Municipal Companies (VKU). Chief Executive Ingbert Liebing demanded that the costs of the gas reserve should be financed from the federal budget. A levy would put an additional burden on consumers and gas suppliers.
What happens to the specifications for gas storage?
The requirements for filling levels will not be extended - they will expire on March 31, 2027. This year the targets were missed. An average filling level of 70 percent should actually be achieved by November 1st. This was clearly missed. The storage facilities are currently around 59 percent full. A spokeswoman for the Federal Ministry of Economics emphasized that the gas supply was secured for the winter. It is not just the storage levels that are crucial for security of supply, but also the actual withdrawal, ongoing gas imports and other precautionary measures. Gas comes particularly via pipelines from Norway, via LNG terminals and via European neighbors.
The gas reserve should not be a replacement for the market mechanism when filling the gas storage facilities. “Market players” should not be able to rely on the gas reserve to secure their delivery obligations, as the draft law states. “From our point of view, it is important that the gas reserve is only used as an ultimate means in physical bottleneck situations,” said Liebing.
What could change the storage filling?
Wholesalers normally buy natural gas cheaply in the summer. They store it and resell it in the winter for a profit to also cover the costs of storage. But the Iran conflict is causing high wholesale prices. As a result, storage is only economically attractive to a limited extent, as gas has to be purchased more expensively in the summer than it can be sold for the winter according to current expectations, as the Federal Association of the Energy and Water Industry explained.
The storage filling for the coming winters must be secured more bindingly, said Sebastian Heinermann, managing director of the industry association Initiative Energien Speicher: “It is therefore right and important that the Federal Ministry of Economics is open to the introduction of a supplier obligation.” This would be an obligation to use storage.
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