European energy prices are falling and falling. At 74 euros per megawatt hour (day ahead), the price of electricity is almost back to pre-crisis levels. And the price of gas has also reached its lowest level since September 25 at 2021 euros (TTF). Last year, it had climbed to record levels and at times exceeded 330 euros after the federal government forced operators to store gas. In addition, there were infrastructure bottlenecks in northwestern Europe, which meant that even more gas could not be transported to Germany from Great Britain, France and the Netherlands, among others. In the meantime, the otherwise stable supply suddenly seemed to be endangered with a view to the coming winter.

Hanna Decker

Editor in the economy.

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In the meantime, the situation has eased considerably. Not only have prices fallen, but gas storage facilities are also well filled at 73 percent. There are several reasons for this. Last winter was one of the mildest since the beginning of winter records, and the Germans heated correspondingly little.

Gas continues to flow from Russia to Europe

But industry has also demanded less gas: on the one hand due to efficiency measures, but on the other hand also because chemical companies, for example, have reduced their production. In the electricity sector, coal-fired power plants had stepped in in the meantime instead of gas-fired power plants. A study by the Hertie School in Berlin had shown that gas consumption had fallen by 23 percent in the second half of the year – significantly more than most experts would have expected at the beginning of the energy crisis.

The Bavarian Business Association (vbw) also assumes that the starting position for the coming winter is good. It has commissioned the consulting firm Prognos to prepare a monitoring study on the German gas balance, which is available exclusively to the F.A.Z. The study makes it clear that gas imports remain at a stable level – also thanks to the LNG terminals on the German coast, which have recently been created at a rapid pace.

The first floating LNG terminal was put into operation near Wilhelmshaven in November, followed by the terminals in Lubmin and Brunsbüttel. Further terminals in Stade, Lubmin and Wilhelmshaven are expected to follow in January. LNG from the world market also comes to Germany via import ports in the Netherlands, Belgium and France. In addition, imports via pipeline from Norway increased last year. Gas continues to flow from Russia to Europe via Ukraine, as well as through Turkey.

From vbw's point of view, savings efforts remain important despite the current high filling levels. "The gas balance shows that we would survive a cold winter 23/24 without behavioural savings, but then the target values of the gas storage facilities would not be met," says vbw Managing Director Bertram Brossardt.

More dependent on the global gas market

A study by the Institute of Energy Economics (EWI) at the University of Cologne shows that European gas prices could return to historical price levels in the medium term, in the event of a sharp global decline in demand, even as early as 2026. In 2030, prices will return to the historical level of the 2010s of less than 20 euros in all scenarios examined. Unlike in the past, gas prices in Europe and Asia could be at comparable levels in the future. In the gas exporting country USA, on the other hand, gas will be permanently cheaper according to the analysis. Norway and the USA will be the most important supplier countries for Europe.

With a view to the coming winter, however, EWI researcher David Schlund cannot yet give the all-clear. He points out that Europe will be more dependent on the global gas market in the future than it was before the crisis, for example on LNG demand in China. Other important factors on the European gas market are how the feed-in of renewables is developing, the extent to which French nuclear power plants are available and how demand from industry and households is developing. On the supply side, it is essential that the currently planned regasification capacities in Europe and, in particular, the liquefaction capacities in exporting countries such as the USA, Qatar, Australia and Canada are actually realized. "We are not yet completely out of the scenario of a gas shortage," says Schlund.