Storage Flexibility Regulation: Habeck's Last Move Could Lower Gas Prices
New Measurement from Habeck May Decrease Natural Gas Costs
In a parting gesture, Economics Minister Habeck has proposed loosening restrictions on gas storage filling, potentially benefiting both industry and consumers. This new regulation, dubbed a "ministerial regulation," comes amid rising concerns about gas prices.
The gas storage surcharge, a component of the gas price, has been on the rise. As of January 2023, it increased from 2.50 to 2.99 euros per megawatt hour, resulting in additional costs of around 12 euros for a household consuming 20,000 kilowatt hours annually.
Trading Hub Europe, the organization responsible for managing the gas market, justified the surcharge increase by taking steps to enhance supply security, such as filling various gas storage facilities. However, the new coalition government has expressed intentions to abolish this surcharge, though a timeline has yet to be announced.
Industry Voices Support
Kerstin Andreae, CEO of the Federal Association of Energy and Water Industry, lauded the regulation as a market-friendly and cost-effective move. By reducing the obligatory filling levels, the surplus demand during summer would be eliminated, making gas storage more commercially attractive.
Under the new regulation, cavern storage facilities will be required to achieve an 80 percent filling level by November 1 of each year, while maintaining a high level of supply security. Pore storage facilities' requirements will be reduced to 45 percent.
Energy Landscape: A Shifting Tide
Germany's energy landscape is undergoing significant changes. The 2025 coalition agreement includes plans to incentivize 20 GW of gas-fired power capacity by 2030. Habeck has explicitly opposed reviving the Nord Stream gas pipeline, reinforcing the country's commitment to reducing dependence on Russian gas. Accelerated grid expansions and energy storage projects are on the agenda, but these priorities primarily focus on electricity rather than gas.
Overall, the new storage filling regulations seem to be part of a broader attempt to make the gas market more flexible and cost-effective. However, the full impact on gas prices remains uncertain, as they are also influenced by other factors like the scaling of hydrogen-ready gas plants, cross-border energy union plans, and ongoing efforts to phase out Russian imports.
- Minister Habeck's proposed ministerial regulation, designed to loosen restrictions on gas storage filling, could potentially benefit both industries and consumers, as per the new regulation, various storage facilities will be required to achieve specific filling levels, such as 80% for cavern storage and 45% for pore storage.
- As part of a market-friendly and cost-effective approach, the Federal Association of Energy and Water Industry's CEO, Kerstin Andreae, has welcomed the new regulation, noting that by reducing the obligatory filling levels, it would eliminate surplus demand during summer, making gas storage more commercially attractive.
- In an effort to make the gas market more flexible and cost-effective, the proposed regulation appears to be a part of a broader strategy by the new coalition government, a strategy that also includes incentivizing 20 GW of gas-fired power capacity by 2030 and accelerating grid expansions and energy storage projects, primarily focused on electricity.
- The impact on gas prices from the new storage filling regulations remains uncertain, as gas prices are influenced by a variety of factors, including the scaling of hydrogen-ready gas plants, cross-border energy union plans, ongoing efforts to phase out Russian imports, and the 2025 coalition agreement's intentions to encourage the reduction of dependence on Russian gas.