Germany is unlikely to face gas shortage next winter – economic research institute

Germany is unlikely to face gas shortages next winter, the Institute for Economic Research (DIW) has said in a report. Following a halt of Russian gas deliveries into Germany in September 2022, “no supply emergency has occurred because other sources of supply could be activated quickly and demand has fallen relatively sharply,” the institute said. While gas saving efforts in the industry remain important, natural gas supply can be maintained in 2023 through imports from Norway, Belgium and the Netherlands, as well as Germany’s new floating liquefied natural gas (LNG) import terminals, according to the report. “Energy supply in Germany is secure even without natural gas from Russia,” the authors write, adding that “scenarios in February 2023 suggest that supply shortages are not expected in the coming winter either.”

According to the institute, in the most likely scenario a supply of around 87 billion cubic metres could meet demand as long as gas consumption remains twelve percent below the 2018 to 2021 average. Last year, Germany used 14 percent less gas. If 95 percent of Germany’s LNG import capacities are utilised, supply could be maintained at about the same level as in previous years, totalling around 94 billion cubic metres, DIW said. However, “Germany would have to secure sufficient LNG supplies on the world market, which is a challenge for German importers on this scale.” Willingness to pay higher prices could help overcome this challenge, according to the report authors.

Energy saving measures, supply diversification and mild winter weather helped maintain high gas storage levels, DIW said, but they advised against the construction of further LNG infrastructure. “The planned construction of onshore liquefied natural gas (LNG) terminals is neither necessary in terms of the energy industry nor sensible in terms of climate policy,” DIW argues. Germany had counted on gas as a bridge technology until enough renewable capacity was installed on its path towards decarbonising its economy, but following Russia’s war of aggression in Ukraine it had to rethink its energy policy plans. International Energy Agency (IEA) head Fatih Birol has repeatedly warned that securing gas for the winter of 2023/24 will be harder than the winter just gone.