Factbox: Germany's emergency gas auction plan

European Energy Exchange AG

21/06/2022 13:56

FRANKFURT, June 21 (Reuters) - Germany, aiming to ensure it
has enough gas for winter, set out a new auction system on
Tuesday that will incentivise industry to curb usage and help it
cope should Russia cut off supply completely.
    The new auction is due to start in the coming weeks and
Berlin is also in talks with industry about expanding existing
measures to help, the country's energy regulator said.
 urn:newsml:reuters.com:*:nL8N2Y82HH
    Here are details of the plan:
    
    NEW AUCTION
    The economy ministry, energy regulator and Germany's gas
trading hub Trading Hub Europe (THE) are about to launch an
auction system to help reduce short-term demand from industrial
users at times when supply is struggling to meet demand. 
    Under the scheme, companies will decide when they can cut or
suspend use of gas temporarily, avoiding the need for the
regulator to have to switch off some supplies. The unused gas
would then be shared across all industrial users at the cheapest
price.
    The government would reimburse companies for stopping
production. Compensation payments would be financed via
surcharges on the gas price.    
        
    EXTENDING EXISTING SCHEMES
    Industrial gas consumers already participate in bidding for
long-term options and short term balancing services - schemes to
help the gas system cope in high-demand periods such as winter. 
    Their use will now be extended to help industry purchase
more spot gas in a crisis.
    
    GAS STORAGE LAW 
    Germany is racing to fill its gas stores ahead of winter,
aiming for them to be 80% full by October. 
    THE in May and June bought 84 terawatt hours (TWh) for
storage via public tenders under a gas storage filling law that
kicked in in May.  urn:newsml:reuters.com:*:nL8N2Y145L  urn:newsml:reuters.com:*:nL2N2WJ16R
    Ongoing tenders should further boost stores, which are
currently 58.1% full. Germany used 1,003 TWh of gas last year.  
 
    
    SPOT GAS MARKET TO STAY OPEN IN EMERGENCY
    Energy exchange EEX  DB1Gn.DE  plans to keep its spot gas
trading market open even if the state has to intervene in the
market. The regulator said it was important that price signals
remain in a crisis to draw gas volumes to Germany.

 (Reporting by Vera Eckert
Editing by Mark Potter)
 ((vera.eckert@thomsonreuters.com; +49 30 2201 33654;
@EckertVera;))