The news from the German energy market does not sound reassuring. After another cold winter week with snow and ice, the filling level of natural gas storage facilities in this country has fallen further. According to data from the gas industry, it is currently only around a third. At the end of January, natural gas stocks had never been this low since records began 15 years ago – not even during the energy crisis caused by the Ukraine war in 2022. And in some regions of Germany the levels are still significantly lower. The storage facility in Wolfersberg, Bavaria, near Munich, was almost empty in the middle of the week with a filling level of just five percent. In German wholesale, the price of natural gas rose by around a third in January.
So how critical is the situation? Can natural gas become scarce again in Germany? And how should politicians react? After all, every second household in this country still has a gas heater in the basement. Industry is also dependent on a secure gas supply to operate factories. The energy industry sees a need for action regardless of the current situation: “The geopolitical situation is challenging. We quickly need a comprehensive political debate about what level of security of supply we are aiming for,” says Kerstin Andreae, General Manager of the energy industry association BDEW. According to information from the F.A.S. Consideration is being given to creating a national natural gas reserve, similar to what has existed for oil since the oil price shocks half a century ago. The state would then procure and store its own natural gas reserves, which can be released in emergency situations to secure energy supplies. Such a strategic gas reserve already exists in Austria. Experts recommend a national natural gas reserve. There is no decision yet as to whether the federal government will actually build up an emergency natural gas reserve. When asked this week, the ministry simply said that the results of an expert report were currently being evaluated. In the October analysis, the experts recommended the creation of a strategic natural gas reserve in the event of a crisis as a possible option. Such a state emergency stockpile would cost money – and could therefore further drive up energy costs in Germany, which are already high compared to other countries. On the other hand, in a gas shortage situation, this could possibly prevent production downtimes in industry, which could cause enormous economic damage. One thing is certain, however: creating a state natural gas reserve would take time and would not change the supply situation this winter. There are different assessments of how precarious the supply situation currently is. The Federal Network Agency signals that everything is under control. “The gas supply in Germany is stable,” said the Bonn authority. The risk of bottlenecks is currently assessed as “low”. The Federal Ministry of Economics makes a similar statement. The network agency and the government point out that, as a lesson from the energy crisis, Germany has built port terminals for the import of liquefied natural gas (LNG) in recent years and thus has an additional import route for natural gas in addition to pipelines. “The supply is on the edge.” The statement from the state energy company Uniper, which is one of the major players in the German natural gas business, sounds significantly less relaxed. “The security of supply with natural gas is currently still guaranteed, but it cannot be assumed to be guaranteed at all times,” says a Uniper spokeswoman. Sebastian Heinermann, managing director of the gas industry’s Energy Storage Initiative (INES), is clearest. “The supply is sewn on edge, and that’s actually not enough,” says Heinermann of the F.A.S. “It would be good if nothing unforeseen happened this winter. The system no longer has much of a buffer.” So far, we have benefited not least from the fact that November and December were not unusually cold, otherwise the storage facilities might already be completely empty. What if Trump no longer supplies LNG? But firstly, it can still be cold in February and March. And secondly, the geopolitical risks have increased dramatically in recent years. What if, for example, a Russian attack causes pipelines in the North Sea that transport Norwegian natural gas to Germany to fail? And what if the unpredictable US President Donald Trump imposes an embargo on deliveries of American liquefied natural gas to Europe tomorrow? LNG terminal in WilhelmhavendpaThe consequences for natural gas supplies would be serious: Norway is currently the largest German supplier, with a share of around a third. And the German LNG import terminals are almost completely dependent on US deliveries: in 2025, 95 percent of direct liquefied gas imports to Germany came from the United States. Storage facilities were poorly filled before winter, which is why storage facilities continue to be important, warns INES managing director Heinermann. On cold winter days, more than half of Germany’s gas consumption is covered by these reserves. LNG terminals, on the other hand, “only play a subordinate role” in securing German gas supplies, he says. The total capacity of the German terminals allows a maximum of 0.78 terawatt hours of natural gas to be imported per day. In December, however, German daily demand averaged 4.2 terawatt hours, more than five times as high. The storage operators are critical of the fact that the German gas storage facilities were only three-quarters full at the beginning of the heating season. This is “the central risk factor for security of supply,” according to a recently published situation report. Legal fill level requirements are counterproductive. But why weren’t the storage facilities full in the fall? The answer that experts give initially sounds paradoxical: Because since the energy crisis there have been legally prescribed minimum levels that must be reached in autumn at the beginning of the heating season. If it becomes apparent in the spring and summer that these will be missed, the state intervenes and fills up the storage facilities through its own gas purchases, which has cost a lot of tax money in recent years. The problem: The market participants know that if there is any doubt, the state will definitely have to buy gas before the fall in order to achieve the fill level requirements – whatever the cost. This tends to drive prices up in spring and summer. The result is a twisted pricing structure. Actually, the gas price should be higher in winter than in summer because consumption is higher in the cold season. In fact, in recent years since the minimum filling level requirements were introduced, it has often been the other way around. On the futures market, it was suddenly cheaper to buy natural gas for delivery in the winter than for the summer. “Politicians could have acted earlier.” The old business model, which had filled the storage facilities fairly reliably before the energy crisis without the state intervening, no longer worked properly. It used to be worthwhile to buy natural gas at the lower summer price, store it and sell it a few months later at the higher winter price. But buying gas at a high price in the summer and selling it cheaper in the winter is a losing proposition. There are therefore fewer market incentives for private natural gas traders to ensure full storage capacity. “The positive effects on security of supply intended by the fill level specifications were at least partially counteracted by the reduced market incentives,” concluded the energy experts from the analysis company Frontier Economics in their report for the Ministry of Economic Affairs in October. At this point, the federal government had already tried to defuse the problem. In the spring, it lowered the minimum fill level requirements for German natural gas storage facilities: previously they had to be at least 90 percent full by November 1st, now an average of 70 percent is sufficient. However, a complete abolition is currently not possible under EU law. The reduction in the filling level requirements led, as the government wanted, to the storage facilities being filled to a greater extent by private companies. But there is a catch, market participants report: The new Economics Minister Katherina Reiche’s lowering of the filling level requirements only came in May and quite abruptly. After that, the storage level rose faster, as hoped. But for technical reasons, some storage facilities could not have been filled quickly enough before autumn. “Politicians could have acted earlier,” is what the energy industry is now saying in retrospect.More on the topicIn the report by Frontier Economics for the Ministry of Economic Affairs, the development of a strategic gas reserve is also examined – and assessed positively. The authors point out that the range of possible crisis scenarios on the natural gas market is greater today than before. In addition to extreme cold weather conditions and technical malfunctions, possible “acts of sabotage and targeted attacks” must now also be taken into account. This is also seen in the energy industry. A strategic reserve could be “a useful instrument” to remain able to act in the event of a crisis, says association boss Kerstin Andreae.
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