German industry is willing to save three percent of its gas consumption by the end of the year in exchange for corresponding cash payments.

In the next six months, companies could provide 10 terawatt hours, according to an unpublished survey by the Association of German Chambers of Industry and Commerce (DIHK), which is available to the FAZ.

That would correspond to about one percent of the total annual gas requirement in the Federal Republic and could be used to fill up the gas storage tanks by an additional 4 percentage points.

Christian Geinitz

Business correspondent in Berlin

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The filling level is currently 61 percent.

According to the new Gas Storage Act, 65 percent is planned by August 1st, 80 percent by October 1st and at least 90 percent by December 1st.

Filling is currently slower than usual as Russia has cut its supplies through the main Nord Stream 1 pipeline by 60 percent.

The Federal Network Agency warned on Friday: If the delivery volume remains so low, the targeted 90 percent would “hardly be achievable without additional measures”.

As such an "additional measure", both the Network Agency and Federal Minister of Economics Robert Habeck (Greens) have in mind buying gas from large consumers and channeling it into storage.

There should also be auction platforms on which the required quantities are advertised and the companies offer their available quantities.

A price is then formed between the actors.

Save as much as you can

The DIHK also queried the possible amount.

Only some of the companies willing to auction could quantify the minimum remuneration they needed in order not to jeopardize their existence despite the gas waiver, it said.

According to the survey, they charge an average of 250 euros per megawatt hour.

But the range is large and ranges from 30 to 1000 euros.

This has to do with the different added value that can be achieved with gas depending on the industry and company.

The expected average price is high: on the European spot market, one megawatt hour of gas currently costs 145 euros.

Assuming 250 euros per megawatt hour for the 10 terawatt hours offered, the cost of the government buy-out campaign will be 2.5 billion euros by the end of the year.

DIHK President Peter Adrian sees the auction model as "an important contribution to stabilizing our gas supply, which politics and business should now mobilize together".

Possible energy bottlenecks are one of the biggest challenges for the German economy.

Many companies have no alternative to gas as a fuel and raw material.

"It is all the more important to mobilize all savings that can be done so that we can fill our gas storage tanks faster," Adrian told the FAZ

Auction model has potential

He called the possible auctions interesting for companies "which would reduce their production if they paid a corresponding compensation and then do without gas in whole or in part".

The feedback showed that this could also create incentives for larger medium-sized companies with a connected load of one megawatt or more.

"Every percent that we save over the summer counts," said the DIHK President.

"This will help the companies and their employees through the next autumn and winter."

Gas bottlenecks must be avoided in any case.

"Our common goal must be to prevent a gas lockdown in the industry," warned Adrian.

Such a scenario could flourish in Germany in the event of a “gas shortage”.

Then the federal government would have to declare the emergency level in the gas emergency plan after the alarm level.

It would then be the task of the network agency to ration the energy source and allocate it to industry.

Almost 240 companies were interviewed for the DIHK survey in June.

Of these, 75 percent came from industry, the rest from construction, trade and services.

Together they had a gas connection capacity of 6500 megawatts.

150 companies brought it to more than one megawatt each, which would qualify them for an auction.

40 percent stated that they could sell gas for money and be available for auctions.

"For these companies, it is more worthwhile not to use gas for compensation than to produce at extremely high energy prices, possibly at a loss."

Willingness and spontaneity required

The groups ready for the auction have a connected load of 3,500 megawatts.

The bigger they are, the more interested they are in the breaker-for-compensation business.

They see themselves in a position to bring 1300 MW into the auctions, i.e. almost 40 percent of their output.

Two thirds or 66 percent of the potential participants could go off the gas grid for several weeks.

23 percent are ready for several days, 11 percent only a few hours.

In some cases, however, a switch to heating oil is necessary in order to be able to separate from gas as an energy source, the association made clear.

This requires faster official approvals.

The required lead time before an auction is considered to be comparatively short.

Only every fifth interested party needs more than a month to prepare: "According to our feedback, an auction can also be held at short notice, and the associated savings can be made quickly," argues the business organization.

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