Key facts
- Germany filled its gas storage to about 61%, missing the EU's 80% target for the start of winter.
- Germany holds more than a fifth of the EU's total gas storage capacity and is the bloc's biggest consumer.
- INES had warned in September that storage would reach only 77% by November 1 at current LNG purchase rates.
- INES called for a supplier storage obligation to be enshrined in law without delay.
- The European gas benchmark topped 100 euros per MWh last week and has stayed there since.
- TTF contracts for December 2026, January 2027 and February 2027 are all trading above 100 euros per MWh.
Germany has failed to meet the European Union's target of filling 80% of its natural gas storage capacity ahead of winter, reaching only about 61%, as the European gas benchmark held above 100 euros per MWh after topping that level last week. The shortfall matters because Germany holds the EU's largest storage capacity, more than a fifth of the bloc's total, and is the EU's biggest consumer of natural gas.
The country's gas storage association, INES, had warned in September that at the prevailing rate of LNG purchases Germany would fill its caverns to 77% at best by November 1. That prediction proved too optimistic. In a statement on Sunday, the industry body said the failure to meet storage targets showed that storage levels for coming winters must be guaranteed more rigorously, acknowledging that the war in the Middle East had made refilling storage "uneconomical", according to Reuters.
INES is calling for state intervention. "It is therefore right and important that the Federal Ministry for Economic Affairs is open to the introduction of an obligation on suppliers," said managing director Sebastian Heinermann. "We must now discuss specific options for the design of a storage obligation at the earliest opportunity, so that it can be enshrined in law without delay."
Not everyone agrees the situation is dire. Klaus Mueller, head of Germany's energy market regulator, said: "It is no longer essential for a secure gas supply that the storage targets be met," according to Reuters. Mueller argued that prompt LNG purchases during the winter would secure enough gas for the EU's largest consumer, while acknowledging that prices have risen significantly.
Gas buyers in Germany and other EU member states had spent recent months waiting for a peace deal between Iran and the United States and lower prices that would make refilling storage economical again. Instead they face the threat of a new escalation after the U.S. midterm elections and an extension of QatarEnergy's force majeure on LNG exports, making purchases even less economical than a month ago.
Benchmark prices suggest traders expect no quick relief. The TTF contract for both December 2026 and January 2027 is trading above 100 euros per MWh, as is the February 2027 contract, indicating no anticipated peace breakthroughs or sudden influx of new LNG supply.
The price pressure is pushing Germany back toward coal. Reuters reported in September that higher gas prices were forcing utilities to shift back to coal, making the fuel profitable again despite the added cost of carbon offsets, which are highest for coal plants. Analysts at the time predicted EU coal power generation would jump by about 25% over the six months to March 2027 as gas generation suffers from high prices.
Germany now faces a dilemma: mandate gas purchases at exorbitant and rising prices, or boost coal purchases to secure power generation during peak heating season. Neither is appetising for the emission-focused government, but physical constraints force one or both, since winter brings little sunlight and low winds. Forecasters expect colder than usual temperatures for Germany in the coming days, which could aggravate the problem because only a limited number of coal plants remain in service and their capacity to respond to higher demand is finite. "Even if the price of gas reaches €100/MWh, the power sector could not react that much more," one ICIS analyst told Reuters in September. With gas now at 100 euros, the buying appears unavoidable whatever the price.