By Vera Eckert
ESSEN, Germany (Reuters) -Subsidised gas auctions in Germany to boost flagging underground storage caverns are still out of reach despite speculative hopes riding on a meeting with stakeholders organised by Germany’s gas market manager at a trade fair.
The lack of progress leaves Europe’s largest economy with a looming question over its energy supply for the coming winter, as the country aims to conserve state funds ahead of a general election.
“A tender is currently not being planned,” read the text on the slides from Trading Hub Europe (THE), mentioning incentives for new storage injections in the summer had been discussed, but THE’s state supervisors must specify and decide on them.
THE’s actions are of significant interest to the wholesale gas market, given that European next-month gas prices are near two-year highs on a combination of cold weather and global competition for supply.
A reversal in seasonal price trends has made summer refilling less enticing, leading to heightened expectations that state-mandated THE will need to incentivise gas purchases to meet a 90% filling target by November, as stipulated by national and European laws.
Germany has the highest gas storage capacity in Europe, but its sites are currently only 48% full, a significant decrease from the 72% recorded at the same time last year, according to data from Gas Infrastructure Europe (GIE).
THE’s managing director, Torsten Frank, confirmed that the type of action or its timing remains open.
“It is being discussed whether it would be better to abolish the filling requirements,” he said in an interview, commenting on a model where market forces would guide the process.
“That would need an important weighing up of advantages and disadvantages for supply security,” Frank said. “Ultimately, it is a political decision.”
(Reporting by Vera Eckert, Editing by Louise Heavens)
