Low gas reserves in comparison to past years reported
In an unexpected turn of events, Germany's gas storage facilities are currently significantly lower than previous years, with the fill level standing at around 34% as of April 2025. This is well below the usual 50% target for winter readiness, as reported by the European Gas Storage Association (GIE).
The reduced fill level can be attributed to a combination of market conditions and regulatory flexibility. Delayed or reduced gas inflows, possibly due to market uncertainties, supply disruptions, or pricing dynamics, have impacted the amount of gas purchased and stored. Additionally, recent agreements within the EU allow member states more flexibility in meeting storage targets between October 1 and December 1, which may lead to strategic timing of fills rather than aiming for earlier full storage.
The urgency to capitalise on storage opportunities exists due to the low inventories, reflecting adjustments in infrastructure and LNG imports aimed at compensating for traditional pipeline supplies. This situation has raised concerns about gas supply security, particularly as we approach the winter season.
If storage is not replenished sufficiently before peak demand, there is an increased risk of supply shortages or price volatility during winter. To mitigate this risk, there may be a higher dependency on alternative supplies such as LNG imports, and more aggressive market or policy measures to ensure supply security.
The flexibility introduced by EU rules may help avoid immediate crises, but it underscores the need for careful monitoring and management to prevent shortages. Low storage may also pressure Germany's energy markets and consumers, potentially leading to increased energy costs or rationing if supply-demand imbalances worsen.
A regulation requires that most storage facilities must be 80% full by November 1, and 45% by February 1. However, even a nationwide average fill level of 70% across all storage facilities by November 1 would not guarantee sufficient supply security in winter.
The Federal Network Agency is closely monitoring the fill levels of gas storage facilities, and Initiative Energien Speichern (Ines), the association of German gas storage operators, cites "a certain restraint in the market" as the reason for the lower fill levels. The industry association suggests that even a reduced fill level target might not be met.
The Rehden storage facility, which accounts for about one-fifth of the total storage capacity in the country, currently has a fill level of just 2.21%. This facility, which belongs to the German administration following Russia's attack on Ukraine, is expected to face challenges in reaching the storage target of 45% due to the need for injections to start from mid-August.
Despite these challenges, it's crucial to view the fill levels of individual storage facilities not in isolation, but as part of a comprehensive approach. On Friday, around 13% of the total imported quantity came through German LNG terminals, suggesting efforts to diversify the country's gas supply sources.
In summary, the lower than usual gas storage levels in Germany, combined with regulatory flexibility, have raised concerns about gas supply security. Proactive measures are required to mitigate risks in the upcoming demand season, ensuring a secure and stable energy supply for the country.
Community policy discussions within the EU may need to address the energy crisis arising from low gas storage levels, as the industry and finance sectors could be significantly impacted by potential supply shortages or price volatility. The employment policy of gas storage facility operators might also require adjustments, considering the urgency to capitalize on storage opportunities and the strategic timing of fills.
