Gas Storage Crisis in Germany: A Deep Dive into the State-Controlled Gas Reserves and the Market Implications
State gas reserves may run dry: Merz administration ponders government intervention - Report findings
Germany's gas storage facilities, primarily operated by private companies like Uniper and Sefe Storage, are facing a crisis as they remain nearly empty. This situation worsens as Uniper recently failed in an auction to allocate additional capacities in the Breitbrunn underground storage facility. Germany's largest gas storage facility in Rehden, Lower Saxony, is also surprisingly vacant. The federal government is now mulling state intervention in the form of a strategic gas reserve, sparking intense debates and discussions.
Currently, the gas storage facilities only fill up when traders expect winter gas prices to be higher than summer prices ("summer-winter spread"). With a low price difference, storing gas is not financially viable, leaving many storage facilities empty. Given the critical situation, the market area responsible entity, Trading Hub Europe (THE), may be forced to intervene.
The Proposed German Strategic Gas Reserve and the Role of State-Controlled Storage Facilities
Initial discussions revolved around the Rehden storage facility as a potential location for a German strategic gas reserve. However, this location is now considered less suitable. So-called cavern storage facilities are easier to fill and more economical, a well-informed source revealed. Short-term gas stored in German LNG terminals could also serve as a strategic reserve.
Some EU countries like Italy and Austria already have state-controlled gas reserves, covering about eleven percent of the total EU storage capacity on average[1][5]. The strategic oil reserve of the USA is the world's largest emergency oil stockpile and serves as a powerful foreign policy tool[1].
The feasibility study for a state-controlled gas storage system in Germany is underway, and the Federal Ministry of Economics, led by Minister Katherina Reiche (CDU), is evaluating its viability. However, the ministry stresses that a comprehensive study on the gas market is currently being conducted, with strategic storage being just one aspect[2].
Implications of State-Controlled Gas Storage on the Gas Market and Germany's Energy Transition
The increased government involvement and potential establishment of a state-controlled permanent reserve could stabilize gas supply security in Germany, especially given geopolitical pressures and energy transition challenges[3]. Flexible and lowered fill mandates may encourage more market-driven storage booking patterns, though the initial uncertainty and large unbooked capacities highlight risks of underutilization or inefficiencies[1][5].
The funding debates around gas storage may impact public acceptance and investments, given tensions between climate goals and gas security needs[2]. Lower gas prices in Europe have been identified as a motivator for storage refill, which could strengthen market functioning if aligned with state policies[4].
This snapshot reflects the status quo as of mid-2025, with ongoing debates and market dynamics shaping the future of Germany’s gas storage system[1][2][3][4][5]. The outcomes will have significant implications for gas market resilience, pricing, and alignment with Germany’s energy transition objectives.
Sources:1. Implications of Gas Storage in Germany2. German Government Reconsiders Gas Storage Policy amid Crisis3. German Gas Storage Market: Future Challenges and Opportunities4. Germany to Lower Gas Storage Fill Mandate amid Broader Reform Proposals5. German Gas Storage Market Developments in 2022
The Federal Ministry of Economics is evaluating the feasibility of a state-controlled gas storage system in Germany, with initial discussions focusing on utilizing economical cavern storage facilities. The proposed strategic gas reserve could potentially stabilize gas supply security amid geopolitical pressures and energy transition challenges, though there may be debates about funding and public acceptance.
The role of state-controlled gas storage facilities extends to the gas market and Germany's energy transition, as these reserves can serve as a buffer against price volatility and supply disruptions. Some EU countries, like Italy and Austria, already have state-controlled gas reserves, demonstrating a trend in government intervention to secure energy resources.
