RWE Impacted as Germany Orders Gas Storage Increase

Germany’s economics minister has ordered state-owned energy company Sefe to procure and store 8 terawatt-hours of natural gas by December 15, responding to low gas storage levels and ongoing geopolitical risks. The directive, issued in conjunction with Chancellor Friedrich Merz, aims to bolster the resilience of Germany’s gas supply.

Currently, Germany’s gas storage facilities are filled to approximately 58%, raising concerns about winter supply. The move comes as the Strait of Hormus remains blocked due to the Iran-Krieg, contributing to high wholesale gas prices and limiting the economic incentive for storage. Sefe, formerly Gazprom Germania and nationalized following the war in Ukraine, will determine the timing of storage, procuring additional supplies as needed.

The directive follows previous discussions with Sefe regarding increased storage and reflects a broader effort to prepare for potential disruptions. The economics ministry is also planning to establish a strategic gas reserve, funded either through customer levies or the federal budget, beginning in 2027. This intervention underscores the government’s proactive approach to energy security amidst a volatile geopolitical landscape and tight gas market conditions.