March 21, 2012 / 2:06 PM / 7 years ago

German gas grids need expanding - Wingas

* Recent cold snaps revealed network bottlenecks

* Would-be investors need higher returns

* Similar problems seen with new gas-to-power plants

BERLIN, March 21 (Reuters) - Germany’s gas transport grids need to expand and offer more fee incentives for shippers to keep gas flowing, the chairman of Wingas, the marketing arm of oil and gas producer Wintershall, said on Wednesday.

“There is not enough investment in capacity,” Koenig told reporters at a gas industry meeting in Berlin. “There was not enough transport capacity to deliver gas to southern Germany in the recent cold spell.”

Wingas which apart from trading has separate company units for transport and storage of natural gas was unable to deliver gas from its new storage facility Haidach in Austria , Europe’s second biggest, he said.

This was despite it being close to industrial regions in southern Germany, where gas was missing in February after Russia’s Gazprom cut exports to Europe.

As a result, German gas-fired power stations in the south produced too little electricity to meet their obligations and emergency power reserves from Austria had to be called on.

This was in sharp contrast to the theoretical high availability of gas. Germany can hold more than 20 percent of its annual gas demand in over 70 underground storage units.

“We need incentives...at the moment it obviously it is not attractive to invest in new lines for storage and gas-to-power plants,” Koenig said.

Low anticipated returns on capital were a barrier, but these could be fixed via regulatory moves to incentivise spending on gas pipes by higher grid fees, which are set by the energy regulator, he said.

There was also much uncertainty concerning future gas demand to complement renewable energies, which Germany is focusing on since it switched off a large slice of its nuclear capacity last year, he said.

Koenig said that gas powered electricity plants were required to offer a much needed back-up for volatile wind and solar power. But they needed guarantees to be able to operate for long periods per year and for decades to come, rather than being asked to merely complement green power until it gained dominance.

Norway’s Statkraft last month said it will not replace an old gas-fired plant at the North Sea port of Emden due to poor gas-to-power profitability and the preference for renewable power on the transmission networks. (Reporting by Vera Eckert, editing by William Hardy)

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