Gas System: Expenditures Doubled During the Gas Crisis

Expenditures in the gas system consist of expenditures for procurement and sales as well as expenditures for the gas grid. During the gas crisis in 2022 and 2023, expenditures for the procurement and sales of natural gas doubled on average. From 2010 to 2021, total expenditures in the gas system amounted to less than 5.2 ct/kWh; since 2022, they have averaged around 9 ct/kWh, while consumption has declined. Part of the increase in expenditures was absorbed by the federal budget. By contrast, expenditures for the gas grid remained largely constant. These are the findings of the brief report “Expenditures for the Gas System in Germany – An Analysis of Historical Developments,” prepared by the Institute of Energy Economics at the University of Cologne (EWI) on behalf of Gas- und Wasserstoffwirtschaft e.V.

The brief report analyses expenditures for the German gas system over the period from 2010 to 2024. It focuses on observable payment flows, which can be used as an approximation of the system costs actually incurred. The brief report distinguishes between expenditures for procurement and sales and expenditures for the grid. The first category also includes CO₂ pricing, procurement-related levies such as the gas storage levy, and public expenditures related to the gas crisis. Grid expenditures are estimated based on the grid charges paid and also include additional grid-related levies and charges.

The gas crisis led to public expenditures exceeding revenues in the federal budget

Up to and including 2021, expenditures in the gas system were borne entirely by the private sector. It was only with the gas crisis in 2022 that the federal budget began to cover parts of the expenditures for procurement and sales. Public funds were primarily allocated to the gas price brake (“Gaspreisbremse”) and the December one-off relief payment (“Dezember-Soforthilfe”). In addition, subsidies were provided for LNG terminal infrastructure and for measures related to gas reserves. As a result, the public balance of the gas system initially declined significantly and turned negative in 2023. This means that public revenues from energy tax, value-added tax, concession fees and CO₂ pricing were lower than the public expenditures flowing into the gas system.

In addition to government crisis measures, CO₂ pricing has also contributed significantly to the increase in expenditures since 2021. Since 2013, CO₂ emissions have initially been priced via the EU ETS 1. The EU ETS 1 applies to a large share of gas consumers in the industrial and energy sectors. “From 2021 onwards, CO₂ pricing became a significant cost parameter in gas system expenditures. This can be attributed in particular to the sharp rise in allowance prices in the EU ETS 1, but also to the introduction of the national emissions trading system (“nationales Emissionshandelssystem”, nEHS),” says Dr.-Ing. Ann-Kathrin Klaas, who authored the brief report together with Jan Hendrik Kopp and Carina Schmidt. The nEHS primarily affects gas consumption by private households as well as the trade, commerce and services sector.

Gas demand strongly affected by the gas crisis

According to statistics from AG Energiebilanzen e.V., gas demand increased by around 4 percent between 2010 and 2021, from 978 TWh to 1,018 TWh. However, with the gas crisis, demand declined significantly from 2022 onwards. The gas crisis had the greatest impact on the industrial sector: from 2021 to 2022, demand in industry fell by more than 30 percent. Since 2022, gas consumption in both the industrial sector and the energy sector has risen slightly again but has remained below pre-crisis levels. In the trade, commerce and services sector as well as among private households, gas demand has shown a downward trend since the gas crisis. Overall, total gas consumption stood at 841 TWh in 2024, 17 percent below the previous peak reached in 2021.