Before the end of last year, we could not have foreseen the challenges that 2022 would bring for the people of Europe, the entire energy industry, and also for us as a company.
As you know, at the beginning of the Russian invasion of Ukraine, we as WINGAS were confronted with an extraordinary situation due to our shareholder. This not only unsettled our partners and customers, but also as an organisation we suddenly found ourselves facing existential questions. And of course, the events also represented an emotional burden for all our employees. We all feel for the people who continue to suffer from the war and its consequences.
WINGAS is a long-term and reliable partner for their customers
Today, the SEFE Group is a strong European energy company that makes its important contribution to the energy supply in Europe. However, our aim is also to provide our own impetus for a green transformation of the national economy. This is symbolised by the Group's new logo – a gas flame from which a leaf is formed. This represents the change towards a low-carbon economy. As a subsidiary, WINGAS GmbH stands by its customers as a long-term and reliable partner and advisor – in the supply of natural gas and as an active part of the energy transition.
I certainly do not need to review in detail how challenging the past months have been for all market participants, so I will only highlight a few points that show how changeable and unpredictable the market – influenced by the dramatic framework conditions – has developed.
Already in the fall of 2021, high intraday volatility was the first harbinger of the gas price crisis; shortly before Christmas last year, the day-ahead price was just over 180 euros/MWh on the THE trading hub. After a phase of calm, extreme price jumps occurred with the start of the Russian invasion of Ukraine at the end of February. The consequences of the high prices and also the unpredictable price developments were serious for market participants. The long uncertain situation surrounding the massively damaged Nordstream 1 also burdened the market.
Fortunately, the situation on the gas market has stabilised somewhat in recent months, partly due to the long period of very mild weather in Germany. Since the end of September, prices have tended to move downwards. In addition, national gas storage facilities have been filled much faster than originally expected. This winter, well-filled gas storage facilities have thus secured supplies, and we have also made a contribution to securing the energy supply by filling the storage facilities.
WINGAS is facing up to the market situation, which continues to be challenging with its high price volatility. We also want to make an important contribution to stabilising the market when it comes to new contracts and changes to existing contracts. This also means flexibility in terms of volume reductions if market participants or their customers aim to achieve the politically prescribed savings targets in their consumption behaviour.
To protect consumers from excessive cost increases, the German Federal government is relying on numerous measures for both residential and industrial and commercial customers. We are therefore adapting our processes and contractual circumstances to the new requirements in the best possible and most flexible way in an ongoing exchange with our customers.
For example, the Federal Network Agency (Bundesnetzagentur) explicitly emphasizes the importance of economical gas consumption, also and especially in winter, in order to avoid a national gas shortage. In addition to the well-known savings target of at least 20 percent compared to the previous year, it is important that the first German LNG terminals feed in as planned at the beginning of the year. We at WINGAS can rely on our colleagues within the SEFE Group to contribute with their expertise.
Particularly in view of the special situation at WINGAS and also the many challenges that we have all had to deal with in recent months, I would like to express my sincere thanks, also on behalf of my colleagues, for the trust you have placed in us this year! I was very pleased to see that you value our many years of partnership and stand by us in a very difficult phase. We look forward to 2023 with confidence and look forward to continuing to work with you in a spirit of partnership and trust.
We sincerely wish you and your families a reflective, peaceful holiday season and a healthy start to the New Year!
Yours Matthias Peter
WINGAS Head of Sales