Position paper on the combination model for security of gas supply

In a recent report by the German Press Agency (dpa), the President of the Federal Network Agency, Klaus Müller, advocated the establishment of a strategic gas reserve as an important building block for security of supply. It is precisely this idea that our position paper takes up and supplements it with a market-based component.

Our combination model for natural gas supply combines two instruments:

• A central entity, such as Trading Hub Europe GmbH (THE), holds a certain amount of gas as a security reserve, which is only used in the event of a crisis. This allows network operators to ensure network stability without distorting the market.

• Supplier obligation to store gas: Gas traders and suppliers are obliged to store a certain proportion of consumption for their customers. Beyond this mandatory quantity, the market for individual portfolio optimization by traders remains in place.

With this model, the responsibility for security of supply is largely left to the market players, while at the same time the infrastructure operators can guarantee the stability of the grid even in crisis situations. At the same time, the model ensures cost-efficient storage filling.

Our position paper is available in the downloads.