Germany Plans Strategic Gas Reserve to Bolster Energy Security

Germany's Economy Ministry is creating a state-owned strategic gas reserve, costing up to €1.5 billion, for emergencies like infrastructure sabotage. Set to hold 24 TWh of gas, it's part of an energy security effort post-Russia's Ukraine invasion. Approval is expected by mid-August with costs funded by a levy on gas consumers.

Germany's Economy Ministry is in the process of establishing a state-owned strategic gas reserve as a precautionary measure for emergencies, such as potential sabotage or severe gas shortages, according to sources disclosed to Reuters. The initiative, expected to cost up to €1.5 billion ($1.72 billion), aims to bolster the nation's energy security.

The move comes in response to heightened energy concerns following Russia's invasion of Ukraine, which prompted Germany to seek alternatives to Russian gas and assess the robustness of its energy systems. This step aligns with Germany's energy transition plan, which includes phasing out coal by 2038.

Under the proposal, awaiting cabinet approval by mid-August, the reserve will encompass approximately 24 terawatt-hours of gas—nearly 10% of the country's storage capacity. The estimated costs, ranging from €1.2 billion to €1.5 billion, are slated for 2027 and 2028, covering storage costs and procurement, supported by a consumer levy.