Italy blames Germany’s storage delays for gas price spike

A senior Italian energy official said on Thursday, Oct. 29, that Germany let Europe down by waiting too long to fill its gas storage. He blamed Berlin for pushing European gas prices to their highest level in nearly four years. Alessandro Noce is director general for energy markets and infrastructure at Italy's Energy Ministry. Speaking at the Montel Italian Energy Day conference in Milan, he said Germany had delayed stockbuilding to cut costs for its energy companies ahead of their privatisation, Reuters reported.reuters.com

The criticism comes one day after the benchmark Dutch TTF front-month contract touched €100 per megawatt hour on Wednesday, Oct. 28. That was the first time it had reached that level since December 2022, according to Reuters and Il Sole 24 Ore.en.ilsole24ore.com+1

"Hit twice"

An energy analyst at the same conference said Germany had held back on stockbuilding while it focused on privatising Uniper and SEFE, two companies central to filling the country's storage, according to Reuters. "Hearing that a European country chose not to fill its storage facilities because it wanted to privatise a company is alarming to me," Noce said. He added that Italy was "getting hit twice." Rome paid €300 million to fill its storage, and it is now paying more for gas "because the Germans are buying it now."reuters.com

Germany's economy ministry said its storage was 61.7% full. Data from Gas Infrastructure Europe showed Italy's storage at almost 91% and the EU average at about 75%. The ministry did not immediately respond to a request for comment on Noce's remarks, Reuters reported. A year ago, Germany's reserves were close to 75%, Pollar News noted.pollar.news+1

Winter risks

Noce said the benchmark contract could reach €150 to €180 per MWh if January turns cold. "It depends on the weather. We have to root for global warming and hope that January is warm," he said. He warned of problems if the cold matches last year's, especially in Poland, Lithuania and northern Germany, per Reuters.reuters.com

EU storage was 75% full on Oct. 21, according to the EU Agency for the Cooperation of Energy Regulators. That is well below the bloc's usual target of 90% by Nov. 1. Stocks were only 28% full at the end of last winter, according to a report carried by AOL. Prices were around €32 per MWh in late February, just before the Iran war began, and have more than tripled since, Asia Economy reported. Anders Opedal, chief executive of Equinor ↗ 2.46%, said storage levels are the lowest for this time of year since 2011.aol.co.uk+1

Political pressure in Rome

The price spike is adding pressure on governments facing angry consumers. For months, Italy has lobbied the European Commission for permission to use public funds to lower gas and power costs for households and businesses before a general election expected next year, Reuters reported. The dispute has reopened debate over how national energy policies affect the EU's single market, EU Today wrote.eutoday.net+1