Germany faces winter gas crunch as storage hits 15-year low

Germany's underground gas storage facilities are only 53% full as of September 1, the lowest level for this time of year in 15 years of record-keeping, according to the country's gas storage industry association INES. The group warns this could lead to supply shortages during the upcoming winter season.

INES says that even under the most optimistic scenario, storage can reach only 77% capacity by the November 1 target date. While this level would be sufficient for a normal winter, leaving reserves at 38% by April 1, it would prove inadequate during extremely cold weather.

Sebastian Heinemann, Managing Director of INES, cautioned that in a severe cold spell, individual days in January could see supply shortfalls of up to 25%. He noted that reaching even the 77% level would require daily injections of 1 terawatt hour (TWh) of gas, a rate not achieved once in the past three weeks. At the current filling pace, storage would only reach 63%.

The slow build-up of reserves is attributed to unfavorable market conditions. Storage economics typically depend on gas prices being lower in summer than winter, but this price spread has narrowed significantly and even turned negative when fees and levies are included, removing the incentive for traders to inject gas.

Although traders have booked capacity equivalent to 83% of available storage volumes, the sluggish summer filling rate has limited what is technically achievable. To accelerate injections, INES has proposed abolishing certain charges and offering subsidized government loans to ensure adequate reserves are built before winter arrives.