Even beyond the current crisis, fossil gas will be significantly more expensive in Germany than in previous years. Germany will face additional costs of €120–200 billion by the end of the decade. To avoid paying these high costs, a step-change in reducing gas use is needed. Germany should fully exploit the savings potential in its building sector. Around 40% more gas can be saved until 2030 than under current plans. The high savings potential calls into question whether Germany needs new gas import infrastructure.
This study forecasts future fossil gas costs for Germany and shows how large amounts of fossil gas can be saved in coming years to avoid high gas costs. Germany will have to pay significantly more for its fossil gas imports as Russian supplies cease. The world market for fossil gas will remain tight until 2030. As a result, the European wholesale market price (TTF) will remain high, leading to high import costs for German imports of both Norwegian gas and liquefied natural gas (LNG).
Table I: Historical and expected import costs for fossil gas in Germany
|€18.5 bn||€33.7 bn||€43.4 bn|
The cumulative additional costs amount to €120–200 billion by 2030. These high import costs will be passed on by the gas importers to households and businesses. For German consumers, gas prices are expected to almost double for the rest of the decade.
Table II: Annual gas costs for a four-person household (20,000 kWh)
|Yearly gas bill
Permanently subsidising these high fossil gas prices would be disastrous in both ecological and economic terms. The sustainable solution is to reduce gas use. Without rapidly cutting its gas use, Germany will not only pay astronomical gas bills, but also the horrendous costs of the worsening climate crisis.
Germany needs a “renewable heat program” to make full use of the huge savings potential in its building sector. It should aim to install 1 million heat pumps and renovate 4% of building stock per year from 2025 onwards. Stimulating the necessary investments and making them economically viable will require government funding of €20 billion per year.
Table III: Gas savings in the building sector up to 2030 (each compared with previous government)
|Current GER government||Possible savings|
|Cumulative savings until 2030||470 TWh||810 TWh|
|Savings as a percentage||16%||28%|
With political support from the German government, German energy importers are planning to build new gas import infrastructure and enter new long-term gas contracts. Both would tie Germany to the volatile and expensive world market for fossil gas for decades to come. However, new permanent LNG terminals will not come online before 2026 and will therefore do nothing to overcome the current shortages. Gas savings in the buildings sector could already exceed the terminals’ planned import capacity by the earliest date at which they could become operational. Instead of promoting unneeded terminals, policy efforts should focus on bringing forward the necessary gas use reductions, thereby accelerating the energy transition and protecting German gas users from high prices.
Table IV: Annual savings potential (vs. 2021) and potential new import capacity
|Savings potential in the
|Import capacity of
planned LNG terminals
|2026||120 TWh||117 TWh|
|2030||258 TWh||195 TWh|