German gas demand remained largely unchanged on the year in 2024, as a recovery in industrial and power-sector burn was almost completely offset by lower residential and commercial consumption amid mild weather.
Germany used about 2.285 TWh/d of gas in 2024, up by 6.6 GWh/d from 2.278 TWh/d in 2023, according to data from market area manager THE (see yearly graph). But total gas use remained below the 2018-21 average of 2.7 TWh/d, with the drop in wholesale prices from 2022-23 not supporting a rebound in aggregate consumption.
Residential and commercial demand — largely for heating purposes — fell by 5pc year on year in 2024 to 894 GWh/d. Household gas prices remain high and are about double those in 2016-21, according to data from grid regulator Bnetza, which may have weighed on gas use by households and small businesses.
Mild weather — especially in the first quarter of the year — also pushed down gas demand from households and small businesses. Temperatures were higher than in 2023 in all but three months in the first three quarters of the year, according to data released by German energy and water association BDEW in late December. The number of heating degree days (HDDs) in Germany was about 4pc below the previous year in 2024, and about 14pc below the 10-year average, according to data from Berlin-based think-tank Agora Energiewende. That said, colder weather in September-December supported a year-on-year increase in heating demand during these months (see monthly year-on-year graph).
According to preliminary calculations published by Agora Energiewende on Tuesday, mild weather and high consumer prices continue to drive the majority of low heating demand, rather than energy-saving efforts. Without the effect of mild weather, emissions from the built environment — largely caused by heating — would have been higher in 2024 than a year earlier, according to Agora. A return of temperature-adjusted heating patterns to pre-crisis levels as well as slow structural changes, such as plummeting heat pump sales, led Agora to urge for more measures in heat transition policy to drive down gas demand from the built environment.
Industrial gas demand up by 7pc despite economic woes
German gas demand for use in industrial processes rose on the year, according to Argus estimates, supported by a slight recovery in energy-intensive industry.
German industry used about 737 GWh/d for industrial processes in 2024, up from 688 GWh/d in 2023 but well below the 2018-21 average of 877 GWh/d, according to Argus analysis.
While German GDP stagnated in 2024 and industrial production continued its downward trend, output from energy-intensive industries such as the chemicals sector recovered slightly, especially in the first half of the year.
In addition, gas prices falling below LPG in January and remaining cheaper than LPG for most of the year until the fourth quarter may have encouraged some industrial firms to return to gas where they had previously switched to LPG to reduce energy costs.
That said, gas prices rising back above propane and butane parity (see LPG fuel-switching graph) and lower output from the chemicals industry in recent months may have slowed the German industrial gas demand recovery. And several plant closures in recent years may similarly constrain any future rebound.
Power-sector gas burn up
Gas-fired generation increased in 2024 from a year earlier on more favourable generation economics than lignite and hard coal, despite a record renewables share reducing the overall call on thermal generation.
Gas-fired generation reached 5.96GW last year, up from 5.88GW in 2023, leading to about 16 GWh/d in additional gas demand for power generation, according to Argus estimates. Gas-fired generation increased year on year despite renewables making up a record 62pc of German power generation. Fossil fuel generation was used to meet 17.1GW of power demand in 2024, down from 19.3GW in 2023. While overall power demand remained roughly unchanged from a year earlier, Germany lifted power imports, pushing down domestic generation (see power mix graph).
But gas increased its share of the thermal mix, partly on lignite and coal plant closures as Germany's coal phase-out progresses. Gas prices at the bottom of the coal-to-gas fuel-switching range for most of the year until the fourth quarter, even outperforming lignite plants in January-July, supported the call on gas for dispatchable generation.
Recent gas price rises have put coal and lignite firmly ahead of gas in the power-generation merit order for all forward periods until 2026, suggesting scope for the share of gas in thermal output to be lower this year.
