Key facts
- Germany is considering expanding market incentives to boost gas storage levels ahead of winter.
- German gas storage sites are 56% full as of mid-September, a historically low level.
- The government plans to increase the volume of gas in the autumn tender for Long Term Options.
- Germany aims to avoid direct state gas purchases and has agreed with Uniper and SEFE to increase storage injections.
- The country's gas storage association, INES, warned of potential gas shortages this winter due to low storage levels.
Germany is contemplating an increase in market incentives to encourage traders to bolster its critically low natural gas storage levels before winter. The country's gas storage sites are currently only 56% full, a level described as historically low and the lowest in at least 15 years, according to Gas Infrastructure Europe data. This situation raises concerns about potential gas shortages if the winter proves colder than anticipated, as warned by the German gas storage association, INES.
The government is exploring an expansion of its existing market tool, the autumn tender for Long Term Options (LTOs), to increase the volume of gas injected into storage. This approach aims to make refilling economically viable for market participants, a key condition highlighted by INES Managing Director Sebastian Heinermann. Germany prefers to avoid direct state gas purchases, a strategy employed in 2022, and has instead secured agreements with state-held energy firms Uniper and SEFE to increase their storage injections. INES has cautioned that refilling has fallen significantly short of the required pace this year, and the window for sufficient replenishment is narrowing.