FRANKFURT, June 21 (Reuters) - Germany, aiming to ensure it has enough gas for winter, set out a new auction system on Tuesday that will incentivise industry to curb usage and help it cope should Russia cut off supply completely.

The new auction is due to start in the coming weeks and Berlin is also in talks with industry about expanding existing measures to help, the country's energy regulator said.

Here are details of the plan:

NEW AUCTION

The economy ministry, energy regulator and Germany's gas trading hub Trading Hub Europe (THE) are about to launch an auction system to help reduce short-term demand from industrial users at times when supply is struggling to meet demand.

Under the scheme, companies will decide when they can cut or suspend use of gas temporarily, avoiding the need for the regulator to have to switch off some supplies. The unused gas would then be shared across all industrial users at the cheapest price.

The government would reimburse companies for stopping production. Compensation payments would be financed via surcharges on the gas price.

EXTENDING EXISTING SCHEMES

Industrial gas consumers already participate in bidding for long-term options and short term balancing services - schemes to help the gas system cope in high-demand periods such as winter.

Their use will now be extended to help industry purchase more spot gas in a crisis.

GAS STORAGE LAW

Germany is racing to fill its gas stores ahead of winter, aiming for them to be 80% full by October.

THE in May and June bought 84 terawatt hours (TWh) for storage via public tenders under a gas storage filling law that kicked in in May.

Ongoing tenders should further boost stores, which are currently 58.1% full. Germany used 1,003 TWh of gas last year.

SPOT GAS MARKET TO STAY OPEN IN EMERGENCY

Energy exchange EEX plans to keep its spot gas trading market open even if the state has to intervene in the market. The regulator said it was important that price signals remain in a crisis to draw gas volumes to Germany. (Reporting by Vera Eckert Editing by Mark Potter)