FNB Gas Winter Review 2021/2022 – Historic caesura in natural gas supply

Storage levels at historically low levels, trading prices higher than ever, partial reversal of transport flows: Transmission operators look back on an extraordinary winter. “Reports on reservoir levels are now almost as present in the media as weather forecasts. This shows, how central the gas infrastructure is for the entire energy supply and thus for Germany’s economic strength,” said FNB Gas Managing Director Inga Posch at the presentation of the Winter Review 2021/2022. “Against the backdrop of the ongoing Russian war in Ukraine, it also means that we now need to pick up the pace considerably in the transition to hydrogen.”

As early as the beginning of December 2021, i.e. even before Russia’s attack on Ukraine, the transmission system operators (TSOs) had identified unusually low storage levels as a potential risk for the necessary procurement of balancing energy. Together with the market area manager Trading Hub Europe (THE), they immediately took precautionary measures to secure the minimum services for a cold spell at the end of the winter. They successfully secured supplies, particularly in southern Germany, by issuing special tenders known as Long Term Options (LTOs).

Russia’s attack on Ukraine causes reversal of transport flows

Russia’s attack on Ukraine has further exacerbated the situation on natural gas markets in an unprecedented way. Prices have remained at a very high level, and the lack of shipments from the east has been offset by imports from the west, among other things. This resulted in a previously continuous east-west transport in the German transmission system being at least partially reversed into a west-east transport.

“We all wish for a quick end to the war. Nonetheless, the loss of Russian gas supplies – whether due to an EU embargo or a Russian supply freeze – has become a possible scenario that must be taken seriously,” said Dr. Thomas Gößmann, Chairman of the Board of FNB Gas. “We are preparing for this at both the national and European level with analyses and regular situation meetings.”

Rapid switch to Hydrogen without alternative

“One of the measures to deal with the crisis is imperative for transmission system operators to look at alternatives to natural gas. Because of geopolitical changes, the call for hydrogen is becoming even louder than it already is. If we want to break free from our dependence on Russian gas, and we must, there is no alternative to a rapid conversion of our network to hydrogen from the perspective of Germany as an industrial location. But this can only be done quickly and cheaply if policymakers now create an integrated planning and regulatory framework for natural gas and hydrogen and thus investment security,” Gößmann concluded.