Gas: Germany’s stocks will not be filled this winter, shortages expected in certain regions

Gas: Germany’s stocks will not be filled this winter, shortages expected in certain regions

It was a race against time that seemed to be in full swing: Last weekend, with a 75 percent fill in national reserves (up from 10 points down in early July), Germany reached its first underground gas storage target two weeks ahead of schedule. The goal: to tap the precious fuel there in cold times in order to avoid using Russian petrol as far as possible this winter. However, despite this initial success, the ultimate goal of reaching 95% by November 1 now seems out of reach.

“In all our scenarios, we will fail because of this [l’]achieve,” said the head of the German energy regulator, Klaus Müller, on Thursday. “We won’t be able to do this because some deposits started from a very low level,” he added. In his opinion, the interim target of 85% by October is “not impossible, but very ambitious”.

In fact, Berlin can no longer rely on its main source of supply: last month, Russia unilaterally reduced flows flowing through the Nord Stream 1 gas pipeline to just 20% of their capacity. However, the more Vladimir Putin decides to close the valves, the fewer gas reserves Germany can accumulate before winter to be able to do without its Russian neighbor in a few months. A vicious circle that reinforces the prospect of a bottleneck across the Rhine, while a 95 per cent fill in stocks would allow it to last for around two and a half months in the event of a total blackout of Russian supplies, the regulator said.

Europe: Risk of gas rationing this winter is growing

20% less demand

Under these conditions, Germany is trying to reduce its consumption by at least 15 to 20%, despite cascading consequences for industry. “If we don’t make it [cet] The goal is for us to run out of gas,” Klaus Müller warned in the Financial Times last Sunday. So far, however, demand for the famous fossil fuel has fallen by only about 5% to 8% year-on-year, despite Russia’s nearly 80% drop in supplies. To speed up the pace, the federal government announced an energy security plan in late July that includes mandatory gas-saving measures for companies.

“We have to save a lot of gas for at least another year. To put it bluntly: There will be at least two stressful winters,” added Klaus Müller on Thursday.

In addition, Berlin is banking heavily on its neighbors to avoid supply disruptions: next week, a text passed by the European Union on July 26 will come into force, stipulating that every country should do “everything possible” to reduce August 2022 by March 2023 its gas consumption by at least 15% compared to the average of the last five years in order to deliver its gas to the countries with the greatest difficulties. In the name of European solidarity, the French government is also preparing to ship part of its stocks to Germany, a major first.

Inevitable rationing?

But that’s not all: in addition to the reactivation of its coal-fired power plants and the possible expansion of its last nuclear reactors, Berlin has already urgently started the construction of two floating LNG terminals for the regasification of liquefied natural gas (LNG) transported by ship from around the world and is calling for the construction a gas pipeline that would connect it to Spain via France to allow easy supply to the Iberian Peninsula.

But despite all these efforts, the game seems far from over. According to research and advisory group Wood Mackenzie, if Russia were to completely halt supplies via the Nord Stream 1 gas pipeline, “Europe would run out of gas next winter” and rationing would even be “inevitable”, regardless of its supply diversification initiatives and restocking. In Germany, despite the negative effects on the economy, bottlenecks are to be expected in certain regions, Klaus Müller warned.

Europe: Risk of gas rationing this winter is growing