Gas shortages in Germany this winter 'increasingly unlikely': regulator

It is increasingly unlikely that Germany will face a physical shortage of natural gas this winter, the country's energy regulator said Jan. 12, as consumption remains significantly down on previous years.

German gas consumption in the first week of 2023 averaged 2.45 TWh/d, down 38% compared with the average for the week in 2018-2021, the Bundesnetzagentur said in its weekly market update.

Temperatures were 5.1 degrees Celsius higher than in previous years during the week, the regulator said.

The reduced consumption and mild weather also enabled Germany to maintain its gas storage levels, with sites filled to 91% of capacity as of Jan. 10.

"The Bundesnetzagentur assesses the situation as less tense than at the beginning of winter," it said.

"A gas shortage this winter is becoming increasingly unlikely. However, a worsening of the situation cannot be ruled out. Economical gas consumption remains important."

Germany has continued to advocate for a gas consumption reduction of at least 20% to make it safely through the winter, even in the event of a cold snap.

It missed the target in weeks 48 and 49 of last year with demand falling by only 13% and 5%, respectively, before week 50 saw consumption rise compared with the four-year average for the first time since late April on cold weather.

But even adjusted for temperature, consumption in the last week of 2022 and the first week of 2023 was 25% below the average for the last four years and was therefore "back in the stable range", the regulator said.

Household demand

In week 1, consumption by households and small commercial businesses remained well below previous years due to a lack of heating demand.

Consumption averaged just 1.2 TWh/d in this sector, down by 42% on the 2018-2021 average and 6% lower week on week, the data showed.

Industrial and power sector demand amounted to 1.245 TWh/d in Week 1, down by 34% on the 2018-21 average, but up 27% week on week as industrial activity resumed after year-end holidays.

Industrial demand had been particularly hard hit by high gas prices for much of 2022.

Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at an all-time high of Eur319.98/MWh ($346/MWh) on Aug. 26.

Prices have weakened since on the back of healthy storage and demand curtailments but remain relatively high with Platts assessing the TTF month-ahead price on Jan. 11 at Eur65.83/MWh.

The German regulator flagged that wholesale gas prices had fallen recently but stressed that they are still at a comparatively high level.

"Companies and private consumers must continue to adjust to significantly higher price levels," it said.