Germany’s Top Utility Still Sees Risks Of Gas Shortages

Gas supply disruptions continue to be a risk for Germany, the chief executive of the country’s biggest utility, RWE, told German publication WirtschaftsWoche in an interview published on Thursday.

“We don't have any buffer in the gas system,” RWE’s chief executive officer Markus Krebber told WirtschaftsWoche, adding that Europe’s biggest economy must accelerate the construction of gas import infrastructure to avoid future shortages.

“If there is very cold winter or supply disruptions it can lead to very critical situations - and as a result to shortages and significantly higher prices,” according to RWE’s top executive. 

After last year’s energy crisis and the halt of Russian gas pipeline supply via Nord Stream, Germany turned to floating storage and regasification units (FSRUs) to import LNG until fixed terminals come online. The LNG import facilities at Wilhelmshaven, Brunsbuettel, and Lubmin are already operational and receive LNG cargoes.

Krebber’s warning that Germany and Europe are not out of the woods yet echoes similar views from the German industry.

The country continues to call on consumers to save gas and expects natural gas prices to remain high until at least 2027. 

INES, the group of German gas storage operators, said in its August gas update that Germany would continue to be at risk of natural gas shortages until the 2026/2027 winter season unless it takes measures to add LNG terminals, additional gas storage capacity, or pipelines.

Earlier this week, Germany’s government said it was bringing back online several coal-fired units for this winter in an attempt to save natural gas and avoid power supply shortfalls.

Coal acted as reserve supply in Germany last winter and will obviously play a role in keeping the lights on this winter, too, especially after Germany completed the nuclear power phase-out in the spring of this year. 

Germany ditched nuclear energy after taking its last three nuclear power plants offline in April, ending more than six decades of commercial nuclear energy use.  

By Tsvetana Paraskova for Oilprice.com

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