November 2025 |
251108 |
ENERGY CHRONICLE |
On November 6, the Bundestag decided to abolish the gas storage levy, which was introduced on October 1, 2022. The levy was intended to finance the additional costs incurred after Russia's invasion of Ukraine as a result of the “Gas Storage Act” (220504) and its subsequent tightening (220708). It currently amounts to 0.289 cents per kilowatt hour. This means that it accounts for around 2.4 percent of the gas price for small customers and around 5 percent for large industrial customers. Its abolition will relieve households and smaller businesses of around one billion euros, while the savings for large customers will be twice as high.
This gas storage levy will no longer be charged to all end customers from January 1, 2026. Instead, the “Fourth Act Amending the Energy Industry Act” now passed in § 35f transfers the financing to the federal government from 2026. At the end of June, the levy account was still in the red with €4,056,811,000. By the end of the year, the deficit is expected to have melted away to between €3.4 and €3 billion. This shortfall is to be eliminated early and in full with a corresponding payment from the “Climate and Transformation Fund.” Incidentally, the federal government assumes that, as a result of the changed conditions on the gas market, no new burdens from the gas storage levy are to be expected for the time being.
However, as a precautionary measure, a regulatory authorization in Section § 35h leaves open the possibility of charging end customers again for the financing. Accordingly, instead of being reimbursed by the federal government, the costs incurred could be passed on by the market area managers, “in deviation from Section 35f, in a non-discriminatory and transparent manner, in whole or in part, to the balancing group managers if this is absolutely necessary to maintain security of supply.” This would restore the previous procedure, whereby those responsible for balancing groups include the gas storage levy in the network costs and pass it on to end customers with their gas bills.
Strictly speaking, the gas storage levy is not being abolished. Rather, its financing is being transferred to the federal government, which has the discretion to pass the costs on to end customers again or to find another solution if higher costs do arise. Section § 35f, which transfers the costs to the federal government, is only applicable until December 31, 2027, in accordance with Section § 35i . The remaining new regulations will apply until March 31, 2027. This is the date on which the gas storage levy would have expired in accordance with Sections 35e and 35g of the previous version of the Energy Industry Act.
As the decline in gas prices also reduces the cost of filling gas storage facilities as mandated by the government, this period until expiry would probably have been sufficient to clear the red figures on the levy account. At the end of June, this deficit amounted to exactly €4,056,811,000. By the end of the year, it would probably have been only €3.4 to €3 billion.
If the federal government now makes a deep dip into the climate and transformation fund to eliminate the remaining three billion euro deficit ahead of schedule, it is doing so in the expectation that no new costs will arise for the time being, because government instructions to fill the storage facilities to sufficient levels are no longer necessary. However, it remains to be seen whether the market will actually regulate everything satisfactorily. For now, it remains to be noted that German gas storage facilities were only 72.5 percent full on November 20, compared to 93.97 percent on the same date last year. From 2017 to 2021 — before Russia's invasion of Ukraine — the average on this day was 87.4 percent.
The gas storage levy was originally intended to supplement the “gas procurement levy", with which the traffic light coalition government wanted to offset the enormous increase in gas import prices following Russia's invasion of Ukraine. However, at 0.059 cents per kilowatt hour, it was forty times lower than the 2.419 cents per kilowatt hour for the procurement levy (220804). Both levies were to come into force at the start of the new gas year on October 1, 2022.
However, the planned passing on of the enormous increase in procurement costs to gas customers soon proved to be a political misstep in an energy sector that lacked an overview and sufficient information at the time (220803. The gas procurement levy was therefore stopped by the federal government shortly before it came into force and replaced by a new concept of state-subsidized caps on electricity and gas prices (220904).
On October 1, 2022, only the gas storage levy came into force. Instead of the ill-conceived gas procurement levy, the Bundestag now decided on the so-called energy price brakes, which gave electricity, gas, and district heating customers retroactive price caps from January 2022 (221203). Although these were higher than before, they were far less burdensome than the gas procurement levy would have been.