At the end of the heating season, natural gas storage facilities in Germany and Europe are quite full, but this does not mean that there will be no problems next winter, according to estimates. Commerzbank. This is because austerity efforts have slackened. With cooler temperatures, prices could therefore still increase significantly next winter, especially if they are liquefied. natural gas (LNG) becoming scarce in the global market due to increased demand from China and if more natural gas is also needed for power generation,”
With regard to the supply of natural gas, the filling level of the German gas storages, for example, is always 30 percentage points above the target. This means that levels are significantly higher than they were at the same time in the previous two years. They have also been slightly above average since 2010. However, today’s level is not particularly unusual. In contrast, since 2010 there have been many years when natural gas storage facilities have been so full in the spring.
Net imports still high in Germany
The main reason for the positive development this winter is the high level of (net) imports. The volume of imported natural gas was significantly higher, despite the fact that the LNG terminals were not fully utilized. The contribution from the newly built LNG terminals was significantly lower than the German bank had assumed. Since this month, the third terminal in Brunsbüttel (after the terminals in Wilhelmshaven and Lubmin) is also operating normally. While the terminal in Wilhelmshaven is probably heavily used, there is still a lot to do for the other two terminals, especially the Lubmin terminal.
It is worrying that, in view of the approaching winter, natural gas consumption has recently fallen significantly less compared to the previous year than in the first weeks of winter. Households consumed more natural gas than a year ago, even though temperatures were actually a bit warmer. So when compared to the effect of temperature, that’s actually quite a significant increase, while industry-adjusted consumption has also increased slightly. A longer-term view also shows that savings efforts have probably slowed markedly since the start of the year. Corrected for the effect of temperature, consumption between the beginning of October and the end of December was 16% lower than a year earlier, whereas since the beginning of the year it has been lower by only 2% .
Nuclear energy could be replaced by renewable energies at present
In this recent increase in natural gas consumption the shutdown of the last three nuclear power plants played no role. Instead, the loss of this energy source has so far been mostly compensated by more electricity from renewable sources. However, this is unlikely to be possible in the long term, as renewables are not suitable for base load operation. Instead, it is likely that more and more electricity will have to be generated from coal and, in some cases, natural gas.
Reduced conservation efforts and possible increased use of natural gas for production electric power they could cause problems next winter. On the positive side, there are still capacity reserves at the German and European LNG terminals and further terminals will be commissioned towards the end of this year. However, it is not yet clear whether corresponding quantities of LNG will actually be available on the global market, partly because China’s rather weak recent demand is expected to pick up. It is possible that natural gas will become scarce again and prices will increase significantly. The most important factor of uncertainty, however, is the weather, with winter 2022/23 being rather mild. If the coming winter turns out to be similar to that of 2010/11, it could be “tight” without additional savings, according to a calculation scenario by the Association of Natural Gas Storage Operators INES.
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Commerzbank natural gas