Natural gas will continue to make a significant contribution to energy supply in Germany over the coming decades. In particular, gas can continue to play an important role as a bridge from fossil fuels to renewable energy. Germany also extracts its own gas. But 93% of the gas it uses is imported, mainly from Russia, Norway and the Netherlands. Natural gas reaches Germany via pipelines, and is subsequently fed into the German long-distance gas grid and the downstream distribution grid.
An important role in the energy transition
Natural gas is the second most important primary energy source in Germany’s energy mix, after petroleum. In 2015, its share of primary energy consumption amounted to 21.1 per cent.
The heat market is still by far the most important market for natural gas. However, nowadays gas is used for more than just producing heat. It is also a flexible and diverse source of energy to balance fluctuations in electricity generation from renewable energy, and in future can be a form of storage for renewable electricity and a source of energy for mobility. As it produces less CO2, natural gas is also more climate-friendly than other fossil fuels.
The total length of Germany’s gas grid is 511,000 km. The pipelines which go to make up the gas grid are essential for transporting and distributing natural gas. They enable widely varying quantities of gas to be delivered safely over long distances. Considerable amounts of gas are transported across Germany to other EU states.
The Gas Network Development Plan, which is updated each year, includes measures for the expansion of the network in line with demand and for ensuring secure supply and safe and reliable network operation.
Natural gas extraction in Germany: fracking
In 2015, approx. 8.6 billion cubic metres of natural gas was extracted, 8.5 billion of this total by means of “hydraulic fracturing”, or “fracking”. Conventional fracking has been deployed in Germany for many years and is a proven method of extracting natural gas from sandstone rock formations. Safety is the number one priority where fracking is concerned: fracking is banned in sensitive areas. Also, the Federal Government has clearly stated its opposition to the use of “unconventional fracking”; no experience has been gathered with this in Germany so far. .
Playing safe with the gas supply
The strong dependence on imports means that the instruments for are vital. Germany’s natural gas supply is very secure and reliable. Germany has the world's fourth-largest gas-storage capacity, which at close to 24.1 billion cubic metres is also the largest within the entire European Union.
Trade and regulation of the gas market
The German gas market is characterised by a large number of privately organised operators in the areas of networks, storage operations and gas trading. There are currently two market areas in Germany (NCG and Gaspool), each with their own coordinator who ensures that access to the gas grid and market activities are carried out in an efficient fashion. 16 long-distance gas companies are currently operating on the German gas market – other players are the distribution system operators, storage facility operators, and traders. The EU internal market package for the liberalisation of the market for electricity and natural gas, most recently amended by the Third Internal Energy Market Package, redefines the areas of activity of market players. To promote competition, the operators of gas supply networks and storage facilities are separated from natural gas trading activities. The electricity and gas supply grids are regulated by the and the regulatory authorities of the Länder.
Gas price and costs
As is the case for other goods and services, natural gas prices are not regulated but are set according to supply and demand. Prices are based on different cost components.
Acquisition costs include the gas purchase price and transport costs. Distribution costs are all the costs involved in transmitting natural gas to the end customers. These costs also include all costs associated with the expansion and maintenance of the natural gas grid.
The natural gas tax is based on the Energy Tax Act under which the level of natural gas consumption in the various areas of application is taxed.
Where network operators use public land for laying and operating gas pipelines, they must pay the concession fee to the respective local authority. You can find out more about the gas prices .
Looking ahead to power-to-gas: using gas to store energy
Another important and promising use for the natural gas grid is emerging. By converting electricity from renewable sources into hydrogen or methane and feeding it into the natural gas grid, the latter could serve as a huge reservoir for several billion kilowatt hours of energy. A number of very encouraging research and demonstration projects aimed at using this technology on a large scale over the next decade are currently underway. For more information, please click .
Promoting the use of natural gas as a fuel is one way to cut the carbon emissions in the transport sector, because vehicles fuelled by natural gas emit hardly any particulates or nitrous oxides. For this reason, the Economic Affairs Ministry has launched the “Round Table on Gas-Based Mobility”. The aim is to enable the transport sector to achieve a share of four per cent of final energy consumption by 2020. .