Expected Vs. Observed Storage Usage: Limits to Intertemporal Arbitrage

  • Anne NeumannEmail author
  • Georg Zachmann

2.1 Introduction

Germany is one of Europe's largest natural gas importers and consumers. Given falling domestic reserves, natural gas storage therefore plays an increasingly important role. However, in regulatory terms Germany holds the “red lantern” in Europe, with very little institutional reform progress and a largely non-competitive natural gas sector. Subsequently, storage capacities are inefficiently used and the signals for new storage investment are distorted. In this chapter we analyze the structure of natural gas storage in Germany and apply a simple econometric model to see if a particular storage site is efficiently used. The chapter starts with some theoretical considerations about the theory of storage and provides some technical details of storing natural gas. We then introduce the natural gas storage activities in Germany (Sect. 2.3). It is dominated by depleted gas and oil fields, but aquifers and salt caverns also play a significant role. The inefficient access to...


Storage Facility Future Price Spot Prex Price Path Convenience Yield 
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Copyright information

© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  1. 1.DIW (Deutsches Institut für Wirtschaftsforschung)Germany
  2. 2.Université ParisLARSEN (Laboratoire d′Analyse Economique des Réseaux et des Systèmes Energétiques)Fontenay aux RosesFrance

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