Germany’s gas storage capacity market at turning point

Two storage capacity allocation platforms are set to fill a gap after the closure of Germany’s dominant platform store-x at the end of 2016. It remains to be seen whether the market will consolidate with one provider or if the market will be carved up by a number of auction platforms.

PRISMA in focus

PRISMA is Europe’s dominant cross-border capacity allocation platform and has been venturing out into the storage capacity auctioning business after the closure of store-x at the end of 2016.

Germany’s astora and EWE Gasspeicher, along with Austrian energy company OMV, were the first storage operators to sign up for the pilot auctions at the beginning of the year.

On Friday, astora is offering capacity for the upcoming gas year for its Haidach facility and the Jemgum site in week 8 on the PRISMA platform.

It would be PRISMA’s second storage auction. The first one was hosted by OMV at the beginning of the month.

ICE, ICE maybe

The Intercontinental Exchange (ICE) Endex is mostly known as an exchange operator and clearing house but has more recently expanded into the storage allocation business. It currently hosts auctions for virtual storage with delivery at the Dutch TTF natural gas hub for wholesaler GasTerra.

ICE also currently offers capacity for the German Innogy Gas Storage for its two facilities with a central delivery point.

Third option

Besides ICE ENDEX and PRISMA, a third option exists. Some major German storage operators including VNG, Storengy and Uniper all offer their capacity at their individual platforms. These however require large IT investments and are not necessarily viable for smaller players.

Energy company Uniper, which was a 32% shareholder in store-x, set up its own storage capacity platform in September 2016, around the same time store-x announced its closure by the end of 2016.

When store-x announced its plans to end its service it cited competition from technological advances and alternative platforms as some of the factors behind the decision.

“Several store-x users simply built their own platform which was the main reason the customer base shrank so much,” said Jorg Albers, senior manager at innogy Gas Storage NWE.

In contrast to cross-border capacity, storage capacity does not have to be allocated via platforms and operators are occasionally also approached directly by customers.

The store-x option

Germany-based store-x was founded in 2006 as a secondary storage capacity allocation platform but many storage operators used it during the last years as a primary tool, predominantly for the German market, explained Andre Janssen, head of storage marketing at EWE Gasspeicher.

“Store-x had a claim to become a European-wide storage capacity platform and was seen by some as a model project. It was however dominated by German storage offerings from its start and could not leave this niche for the German market over the past years,” Albers said.

Outlook

Market participants contacted by ICIS are in conversations with both providers and continue to weigh their options whether to side with ICE Endex or PRISMA.

If a single platform was to come out on top, it might further pull in storage operators from other countries as the pool of potential customers is likely to grow. marcello.kolax@icis.com