Gas storage association warns of German supply risks

The gas storage association Initiative Energien Speichern (Ines) has issued a warning regarding significant risks to Germany's gas supply for the upcoming winter. Sebastian Heinermann, managing director of Ines, cited low storage levels and the closure of the Strait of Hormuz as primary concerns.

As of mid-August, German gas storage facilities are only approximately 49 percent full, significantly below the typical 90 percent level expected before the cold season. Heinermann noted that even if levels reach 78 percent before winter, reserves might only last until early February in the event of a cold winter. In an extreme scenario, the Federal Network Agency (Bundesnetzagentur) might have to intervene to allocate scarce quantities to ensure household supply.

A critical issue identified is the lack of economic incentives for storage. Due to the closure of the Strait of Hormuz, gas prices have risen sharply, yet current winter delivery prices remain slightly lower than current purchase prices. This price structure incentivizes selling gas now rather than storing it for winter. Heinermann is calling for urgent reforms to make storage more economically attractive and to prioritize supply security to protect Germany's industrial sector.