Rising gas use in Germany puts country on course for winter shortage

Regulator reveals nation fell far short of gas savings target last week

Cold weather in Germany led to consumers using more gas. AP
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People in Germany have been warned their gas usage must be reduced if the country is to avoid a national shortage in the depths of the coldest winter weeks.

Households and businesses used more gas during last week's cold snap than in the previous year's corresponding period, the head of the nation's energy regulator said on Thursday.

Gas and power are central to a number of crises hitting Europe, with inflation forced upwards and rising prices for gas linked to the war in Ukraine and Russia’s role as a key supplier.

National regulator Bundesnetzagentur said Germany had fallen far short of its gas savings target of 20 per cent last week.

“Additional consumption was expected with the cold temperatures,” Bundesnetzagentur chief Klaus Mueller wrote on Twitter, referring to temperatures below 0ºC. "This should and must not continue in the next few weeks."

Consumption was up 28 per cent year-on-year for the week for households and businesses, while larger industry recorded a 3 per cent fall, Mr Mueller said.

This compared to a 3 per cent year-on-year decline for households and businesses and a 7 per cent decline for industry the previous week.

Temperatures last week were 7.9°C colder than the previous four-year average, the agency said, with a cold snap that led to sub-zero temperatures across much of the country.

This week's average temperature was 5.9°C, back in the stable range, the regulator said, adding that gas consumption was therefore expected to ease.

Chancellor Olaf Scholz last month said the country was ready for winter after finding alternatives to Russian energy.

A new gas terminal has been built in record time, condemned coal and nuclear plants were restored to the grid and storage tanks were filled to capacity to prepare for the chill.

A warm October helped the population make major cutbacks in gas consumption.

EU nations have capped natural gas prices, but some experts say it will likely have a limited impact on reducing what businesses and households pay.

The European benchmark price for gas is about €95 (about $100) per megawatt hour. In August, it briefly reached €345.

The European price cap will be triggered if two conditions are met: If the benchmark price rises above €180 per megawatt hour over three consecutive days, and if it exceeds a reference price for liquefied natural gas prices by at least €35.

“Any potential problems with supplies, cold weather snaps and insufficient demand reduction could all contribute towards these two conditions being met at the same time,” said Katja Yafimava, from Oxford Energy.

“This has nothing to do with lowering energy prices overall, which will indeed remain high with this price gap."

The impact on consumers will be negligible, oil and gas analyst Thierry Bros said.

“There will be no impact for individuals and very little for manufacturers,” he said. "There is not necessarily a direct link between the wholesale price and the price you pay for electricity or gas."

Updated: December 22, 2022, 3:35 PM
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