The massive expansion of the LNG infrastructure in Germany is necessary, says the federal government and justifies this with insufficient capacity in neighboring countries. Current research now shows that the calculations of the Federal Ministry of Economics have weaknesses. That could be expensive for the taxpayer.
The expansion of the LNG infrastructure should get Germany through the coming winter and make the country independent. A total of eleven liquid gas terminals are to be built to compensate for the loss of gas imports from Russia. The plans are also criticized: Too many terminals, the project as a whole is too expensive, it is said again and again. This criticism could now flare up again. Because the justification given by the federal government as to why Germany needs its own LNG terminals is on shaky ground.
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Current research by the news portal “Table.Media” shows that the number used by the Federal Ministry of Economics to justify the construction of LNG terminals in Germany is wrong. According to the report, the error in planning lies in the calculation of the capacities of the LNG terminals in neighboring German countries. As a result, the need for infrastructure required in Germany is overestimated.
In an FAQ that was sent to the opening of the first German LNG terminal in Wilhelmshaven and is available to the portal, the Ministry of Economic Affairs writes:
“Although there are fixed LNG terminals in other EU countries, Germany can only be supplied with gas via some of them. There are LNG terminals in the neighboring countries of the Netherlands, France, Belgium and Poland, which already play an important role in Germany’s supply due to their geographical proximity. However, these represent a regasification capacity of only approx. 40 billion m³ per year. […]”
According to the letter, the capacity of 40 billion cubic meters per year does not cover Germany’s needs of around 95 billion cubic meters per year. And according to “Table.Media” this information is not correct. This is evident from the figures for the real and maximum feed-in (send-out/DTRS) for each of the said LNG terminals in the neighboring countries. The data can be viewed for each day on the European Gas Network Operators (GIE) website.
As the research shows, the total amount of gas fed in exceeds the calculation of the Federal Ministry of Economics. In 2022 it was 70 billion cubic meters (bcm). And the maximum capacity is at least 96 billion cubic meters per year, if you add up the information from the operators. For comparison: 55 bcm of natural gas was transported to Germany through the Nord Stream pipeline every year.
The graphic makes this clear:
The problem is that the LNG Acceleration Act passed in May appears to be based on the wrong assumptions. Specifically it says:
“The capacity of the existing LNG terminals, which Germany can only use partially, can only cover the loss of Russian deliveries to Europe to a small extent – even with 100% capacity utilization.”
“Table.Media” editor Malte Kreutzfeldt does not see any confirmation that the “failure of Russian deliveries for Europe can only be covered to a small extent”. Even after deliveries from Russia via the Nord Stream pipeline were stopped in September, there was no shortage of gas in either Germany or neighboring countries. Germany also benefited from significantly increased imports from the Netherlands and Belgium. Figures from the Federal Network Agency show this.
On January 4, 2023, the Federal Ministry of Economics corrected itself. According to the ministry, the 40 billion cubic meters of gas mentioned in the ministry’s FAQ as “regasification capacity”, i.e. the total capacity of the terminals in France, Belgium, the Netherlands and Poland, represent the maximum capacity that Germany can obtain from these terminals . Specifically it says:
“We are currently assuming that Germany can obtain a maximum of around 40 billion cubic meters of natural gas from LNG terminals in neighboring countries. The number refers solely to the LNG terminals relevant for Germany and applies regardless of the existing transport capacities of existing pipelines. The new domestic terminals can remedy this and have a price-lowering effect.”
It goes on to say:
“From the point of view of the BMWK, the capacity quantities available in Germany can therefore be quantified as follows:
If the purchase volume from the neighboring LNG terminals of 40 billion cubic meters is correct, a large part of the volumes once delivered from Russia (55 billion cubic meters) could be compensated. Due to new gas imports from France – Germany exported there in the past – the real demand is likely to be even lower.
According to the research, less than 15 million cubic meters would have to be compensated. Among other things, the mild winter is currently favoring savings – a situation that cannot be assumed to be permanent. For this reason, the BMWK considers it essential to build its own terminals. Six floating terminals are planned. From the winter of 2023/2024, around 30 million cubic meters of gas should be able to be regasified there. According to an internal document from the ministry from the beginning of December, Table.Media is even considering ten floating terminals with a total capacity of over 50 billion cubic meters of gas per year. That would mean overcapacity. The criticism of the LNG expansion in Germany should not become quieter.
A study by the NewClimate Institute also comes to the conclusion that the terminals are clearly oversized and that there is a risk of significant bad investments, some of which would have to be paid for with taxpayers’ money. When all the plants are in operation in four years, they will have an annual capacity of more than 70 billion cubic meters of natural gas. And that’s too much, it says.
In view of the energy transition that Germany is striving for, the possible miscalculation also seems to be expensive. Because the aim is to steadily reduce natural gas consumption in the future. In order to achieve the climate targets, German gas consumption would have to fall by a fifth by 2030, by half by 2035 and to almost zero by 2045.
With a view to this scenario, Federal Minister of Economics Robert Habeck has announced that the LNG terminals will be built in a future-oriented manner so that they can later accommodate climate-friendly green hydrogen or ammonia. But here too there are doubts as to whether this plan will work at all. A new study by Fraunhofer ISI commissioned by the European Climate Foundation (ECF) comes to the conclusion that there is a great deal of uncertainty if LNG terminals are subsequently converted to import liquid hydrogen or ammonia.
The taxpayer threatens to pay into the void. Since the majority of LNG terminals are supported by federal funds, taxpayers bear the costs here. Once all the planned terminals are in operation, Germany will be able to import almost two-thirds more natural gas than it currently consumes.