Strategic Gas Reserve

Between May and August 2022, ASGM conducted two market-based, transparent, non-discriminatory and public tender procedures to procure the strategic gas reserve.

In total, 20 TWh of gas were procured, as stipulated by law – including 8.5 TWh specifically from non-Russian sources. These gas volumes have been available to safeguard Austria’s gas supply since November 1, 2022.

The total cost of the two tenders amounted to EUR 3.95 billion.

Following the extension of the validity period of the strategic gas reserve, storage contracts for the required storage capacities for the 2025/26 and 2026/27 storage years were concluded in January and November 2024, respectively.

As the feared worst-case scenarios during the winter seasons since 2022 did not turn up, and corresponding energy control measures were not required, the full volume of 20 TWh remains stored and available.

The distribution of the reserve across various storage locations, along with the contracted withdrawal capacities, ensures that Austria’s market areas can respond flexibly to a range of load and demand scenarios.

The conditions for releasing and utilising the strategic gas reserve are conclusively defined in § 18c of the Gas Industry Act (GWG 2011).

The reserve may only be released by ordinance of the Federal Minister for Labour and Economy, pursuant to §§ 5 and 26 of the Energy Steering Act 2012, and with the consent of the National Council’s Main Committee – provided the criteria of § 4 (2) of the Energy Steering Act 2012 are met.

Measures may be taken in the following cases:

• To avert or resolve an imminent or existing disruption of Austria’s energy supply, where such disruptions
          - Are not the result of seasonal shortages, and
          - Cannot be resolved in time or only with disproportionate means through market-based actions
• To meet international obligations to implement emergency measures based on resolutions of international organisations
• In accordance with solidarity obligations under Article 13 of Regulation (EU) 2017/1938
• Under regional or bilateral support duties pursuant to Article 15 of Regulation (EU) 2019/941

The release must be terminated as soon as the conditions justifying it no longer apply.

If the use of the strategic gas reserve is authorised, the necessary volumes are fed into the gas grid as balancing energy to maintain system stability and secure supply.

If balancing groups fail to feed sufficient gas into the network to supply their customers, volumes from the strategic gas reserve may be allocated to them. In such cases, the market area manager instructs the balance group coordinator to use the gas in accordance with § 87 (4) GWG 2011 for calculation, allocation, and settlement of balancing energy.

To settle these balancing energy allocations, the market area manager sets a fee, which is billed to the balance group coordinator. The coordinator passes these costs on to the responsible balance groups through the balancing energy settlement (clearing). Operational details regarding balancing energy settlement for the deployment of the strategic gas reserve are defined in the Gas Market Model Ordinance 2020, as amended by the 2nd Amendment Ordinance (Federal Law Gazette II No. 357/2022).

The fee is based on the higher of the following two prices, plus a reasonable share of additional costs in accordance with § 18b GWG 2011:

1.        The respective procurement value of the allocated gas volumes (starting with the highest priced volumes)
2.       For the East market area: the CEGHIX exchange reference price of the relevant gas day; for Tyrol and Vorarlberg: the weighted average spot market price index published by the gas exchange at the upstream market area’s virtual trading point (§ 18c (2) GWG 2011)

As of December 31, 2024, the applicable fees are EUR 244.57/MWh for the first 12.3 TWh and EUR 131.74/MWh for the remaining 7.7 TWh.

This restrictive pricing mechanism was deliberately chosen to strongly incentivise market participants to secure sufficient gas volumes independently for their customer supply obligations.

Currently, the legal framework for the strategic gas reserve is valid until April 1, 2027. Regulations for the period thereafter – including any potential reduction or dissolution of the reserve – still need to be developed.

Until then, the strategic gas reserve continues to make a vital contribution to Austria’s security of supply. Reducing the importance of this instrument will require rapid upgrades of import capacities from Germany and Italy, supported by necessary infrastructure projects. Such projects are outlined in the Coordinated Network Development Plan of Austria’s transmission system operators, Gas Connect Austria GmbH and TAG GmbH. Notable examples include the WAG Loop 1 (+73 GWh/day) and the TAG Reverse Flow Capacity Increase (+150 GWh/day), both scheduled for completion in 2027.

Reports on the procurement and use of the strategic gas reserve, as required by § 18a (3) GWG 2011 and published annually by April 30, can be found in the download area.

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