Berlin (AFP) – The German government on Wednesday approved a draft bill to create a strategic gas reserve intended to secure the country’s “energy resilience” in case of an emergency. Set to be financed through a surcharge on consumers, the reserve is due to hold 24 terawatt-hours (TWh) of gas, around 10 percent of the country’s storage capacity. From 2027, it is intended to replace the mandatory gas storage targets introduced after Russia’s full-scale invasion of Ukraine.
“The past years have shown us how quickly an apparently secure energy supply can start to falter,” said Energy Minister Katherina Reiche. “The strategic gas reserve does not insure us against high prices, but against crisis situations.” Since the loss of Russian gas due to Russia’s war with Ukraine, Europe’s biggest economy has scrambled to find new energy supplies. Costs have soared again this year due to the US war on Iran, with European gas prices hitting their highest levels since 2022 in October.
Data from storage tracking platform AGSI shows that Germany’s gas facilities are only 59 percent full, well under the EU average of nearly 75 percent and lagging behind the legally mandated target of 70 percent by November 1. But Reiche insisted that “the supply is secured for this winter according to current assessments,” pointing to diversified sources of supplies such as liquefied natural gas (LNG) imports. “The strategic gas reserve decided today looks beyond this winter,” she added.
The reserve is to be placed under the control of the German federal regulator for the sector, which may decide on its use in the event of “sabotage, failure of critical infrastructure, or other exceptional events”. The Economy Ministry said the measure — which still requires parliamentary approval — would provide a buffer against supply shocks, helping to avert or delay curbs on industrial consumption while protecting gas deliveries to priority users.
The reserve volume of 24 TWh corresponds to a scenario in which Germany’s principal import infrastructure for gas is unavailable for 30 days. It would also cover 20 days of interruption of all Norwegian pipeline gas imports, or 40 days of shutdown of German LNG terminals. The scheme is forecast to cost between 247 and 405 million euros ($274m and $449m) per year over a 10-year period. The ministry estimates the impact at 0.03 to 0.05 euro cents per kilowatt hour, corresponding to an increase of between 0.3 percent and 0.5 percent in household bills.
© 2024 AFP
