Below-normal European natural gas inventories - which are usually at their annual peaks by this point in the year - leave the region exposed to power price volatility heading into winter when power demand across the continent is highest.

An enduring slump in power generation from wind farms and hydropower plants is the main driver behind the jump in Germany's gas use, which has climbed by around 15% over the first 10 months of 2025 from the year before, LSEG data shows.

Continued sub-par wind power output heading into winter may force German utilities to sustain their recent higher levels of gas-fired generation, and could trigger a tightening in regional gas supplies and higher power prices for consumers.

GASSED UP

Over the first 10 months of 2025, Germany's gas-fired power generation was 41.6 gigawatt hours (GWh), data from LSEG shows, which is the highest for that period since before Russia's invasion of Ukraine in 2022 snarled regional gas markets.

Germany was previously the top destination for Russian pipelined gas supplies, but was a key driver of European efforts to cut purchases of Russian energy exports in response to the attacks on Ukraine.

In the immediate wake of the cuts to Russian gas flows, Germany's power system dialed down gas use to multi-year lows, with gas-fired plants accounting for just under 15% of utility electricity supplies in 2022 compared to over 17% in 2021.

However, the country has struggled to adapt its energy systems to the sudden dearth of gas supplies, and has replaced much of the lost Russian volumes with imports from other suppliers, including in the form of much-pricier LNG.

The rebound in overall gas supplies has triggered a steady recovery in Germany's gas use, and so far in 2025 gas accounted for 19% of electricity supplies, which is the highest for the January to October period since at least 2015, Ember data shows.

CLEAN CUTS

A lengthy stretch of sub-par generation from wind farms and hydro dams has also forced utilities to burn more gas.

During January to October, combined power generation from wind and hydro assets dropped by 7% from the same months in 2024, to the lowest for that period since 2022, LSEG data shows.

Combined wind and hydro output accounted for 34% of Germany's total power generation in the first 10 months of 2024, but so far in 2025 accounted for just under 31%.

To offset that drop in clean power, German utilities have been forced to raise generation from all fossil fuels, with coal-fired output up by around 4% from the year before and total fossil fuel output up 6%, according to LSEG.

TAKING STOCK

The sustained higher levels of gas-fired generation this year have resulted in a slower replenishment of both Germany's and Europe's gas storage levels, which offer critical buffers against global gas market gyrations during high demand periods.

Roughly 25% of Europe's total gas storage capacity is in Germany, which is the most of any country on the continent and means that the pace of German stock building has an impact on gas stockpile levels across the region.

Germany's gas storage system is currently around 86% full, but storage tanks are usually full to the brim by this point of the year due to the expected need for higher gas generation during the winter.

Indeed, LSEG data shows that Germany's gas storage tanks have averaged 108% of nameplate capacity as of the end of October for the past three years, indicating that current inventories remain sharply below normal.

Lower gas stocks in Germany are also being reflected in Europe's overall gas storage system, which is only around 83% full compared to an average of 96.5% full at this point in the year since 2022, data from LSEG shows.

WIND WATCH

German wind farms will have a key say over whether Germany's gas stockpiles will be sufficient to meet the country's power needs heading into 2026.

So far in 2025, total wind power output in Germany is down around 4% from the year before due to below-normal wind speeds at turbine level for much of the year so far, LSEG data shows.

However, the winter months typically lead to breezier conditions which usually lift wind generation levels sharply heading into the new year.

The latest short-term LSEG forecasts for German wind output call for generation to remain well below average through the middle of this month, which raises the chance of continued high levels of gas-fired power output over the near term.

Longer-range forecasts through next spring still call for wind generation to come in close to the long-term average, which if correct should help cap the need for gas-fired output over the coming winter.

If Germany's wind farms remain prone to lengthy stretches of sub-par output, however, further spells of elevated gas power generation may result, which could trigger further draws on gas stockpiles and fresh increases in regional gas prices.

The opinions expressed here are those of the author, a columnist for Reuters.

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