INES presents study on the design of a balancing energy reserve

In order to improve the security of gas supply, the Federal Ministry for Economic Affairs and Energy (BMWi) in its non-paper "Measures to further Increase the Security of the Natural Gas Supply" has proposed a balancing energy reserve via the market area coordinators, for example in storage facilities. A new study by the consultancy nymoen | strategieberatung shows that the European requirements for a supply standard with a balancing energy reserve can be effectively implemented in Germany and that a gas-consuming household is only burdened with one additional Euro per year.

As part of the debate on policy measures to strengthen Germany’s gas supply security, the Initiative Erdgasspeicher e.V. (INES) recommends setting up a provisioning standard for protected customers through the market area coordinators and has developed and presented a corresponding model. In this context, INES suggests that by means of § 53a EnWG a provision of gas quantities should be obligatory for protected customers, thus minimizing the gas procurement risk, in particular for the vital heating needs of household customers. With a corresponding design of long-term balancing energy products (MOL 4), as proposed by the BMWi in its non-paper, such a precaution can be set up physically effective in storage.

If a provision is made in natural gas storage and its scope is aligned with the coverage standard for protected customers, then the withdrawal rates amounting to around 2,500 GWh per day for up to 30 days and around 3,260 GWh per day over a period of a maximum of seven days. A combination of two long-term balancing products, which take into account the different delivery intervals (7 and 30 days), can result in a storage provision for Germany, which ensures all three hardship scenarios in line with the European supply standard.

As part of an analysis, the costs associated with such a provision for the gas business year 2014/2015 were quantified by nymoen | strategieberatung, a Berlin-based consultancy. The storage savings proposed by INES would have caused economic costs of around EUR 15 million in the period under consideration. The gas consumption of the protected customers in the gas business year 2014/2015 was around 294 TWh. A household with an annual gas consumption of 20,000 kWh would thus have had additional costs of around one euro per year.

In times of crisis, the balancing reserve could supply additional quantities of gas to the trading venues, thereby providing the quantities of gas needed to maintain the gas supply of protected customers. The additional liquidity at the trading venues would not adversely affect the current incentive system for provisioning in the form of the balancing energy price, but rather systematically support and maintain it in times of crisis.

"The result of the study affirms that we have developed and proposed a constructive and cost-effective model to further increase the security of Germany’s natural gas supply. We are talking about an annual amount of around 15 million euros, which we want to invest in times of a renewed Ukraine crisis and associated tensions with Russia in securing the vital gas-based heat demand of German households," commented Bernd Protze, Director of the INES Board. "This is an almost ridiculous amount compared to the grid infrastructure costs of just under one billion euros reported this year – an amount which has a big impact," he added.

Claus Obholzer, Deputy Director of the INES Board, added: "The planned amendment to the Gas Supply Safety Regulation aims to introduce a solidarity principle in Europe. Member states are required to shut down non-protected customers in times of crisis to supply protected customers in neighboring countries. In order to gain acceptance for this idea of ​​solidarity, it is more important than ever for the member states to first do their own homework and effectively implement the European obligations, including the standard of care, nationally. "

Download Study (in German)