Low storage levy could indicate German gas traders prepare for “worst-case scenario” – media

A second wholesale levy on natural gas on top of the existing gas consumption levy in Germany signals that the country’s gas trading platform Trading Hub Europe (THE) is preparing for a “worst-case scenario” regarding the country’s gas supply next winter, energy policy newsletter Tagesspiegel Background reported. The additional gas storage levy of 0.59 cents per megawatt hour (MWh) might be much less than the consumption levy, which was introduced to stabilise struggling gas importers, but it still carries the important political message that THE is preparing for a gas shortage in winter. It remains unclear whether utilities will pass on the cost to consumers. The low gas storage levy could be explained by the fact that the trading hub apparently “expects to sell gas at a much higher price than it purchased it for,” Sebastian Gulbis of consultancy Enervis told Tagesspiegel Background. Gulbis said THE was likely to expect high volumes of operating reserves being used in the grid to stabilise gas transport and lower final consumption.

Germany has sought to avoid a severe shortfall of gas in the coming winter since the beginning of Russia’s invasion of Ukraine last February, as it expected Russia, its largest natural gas supplier, to use the fossil fuel as a tool to exert pressure on European governments. Russia subsequently reduced its gas supplies to Germany and other EU countries significantly and even though Germany has recently attained its first gas storage schedule of 75 percent filling levels ahead of schedule, the head of the country’s grid agency BNetzA earlier this week warned the 95 storage level target for 1 November is unlikely to be met and that regional gas shortages will be difficult to avoid.