Ever since the Russian company Gazprom cut back supplies via the Nord Stream 1 pipeline, the German government has been alarmed. Federal Economics Minister Robert Habeck (Greens) is planning to increase the use of coal-fired power plants for a transitional period in view of the reduced deliveries. “It’s bitter, but in this situation it’s almost necessary to reduce gas consumption,” explained Habeck on Sunday.
Numerous gas-fired power plants in Germany are currently being used to generate electricity. So that more coal-fired power plants can be used as a substitute, a corresponding law is to be discussed in the Federal Council on July 8th and then come into force quickly. At the same time, the Ministry of Economics and Climate is currently preparing the necessary ministerial regulation that will activate the gas reserve.
The federal government is thus reacting to the reduced gas supply via the Nord Stream 1 Baltic Sea pipeline, which has been reduced by around 60 percent in the past few days. The Gazprom group justified this with delays in the repair of compressor turbines by Siemens Energy.
But Habeck sees a targeted approach by Russian President Vladimir Putin behind the throttling of the delivery. “It’s obviously Putin’s strategy to unsettle us, drive up prices and divide us,” Habeck said. “We won’t allow that. We defend ourselves resolutely, precisely and thoughtfully.”
The head of the Federal Network Agency, Klaus Müller, told the Tagesspiegel that the situation was “unchangedly tense”. “The gas supply is stable at the moment,” he added. “We have to keep filling our gas storage tanks, otherwise it will be difficult next winter. Everything that we save and save now helps,” Müller continued.
“If not enough gas is available, private consumers and, for example, hospitals and nursing homes are particularly protected. We would then have to order industry to reduce gas consumption, with serious consequences for our economy.”
The plan to temporarily rely more on coal-fired power plants for electricity generation is “not an easy decision in terms of climate policy,” said Müller. “In order to reduce gas consumption in power generation, however, this is necessary.” The head of the Federal Network Agency announced that a mechanism was to be established in the summer with which the industry could offer reductions in its consumption, similar to auctions.
The planned auctions are intended to help save energy. As the Ministry of Economic Affairs explained, the planned gas auction model should ensure that as much gas as possible is available in winter. The mechanism is intended to create an incentive for industrial consumers to save gas, which can then be used for storage.
According to the model, industrial customers should receive remuneration from the market if they make gas available for storage that is not required. To this end, the so-called market area manager Trading Hub Europe (THE), the Federal Network Agency and the Ministry of Economic Affairs are developing a gas control energy product with which gas that is not required can be made available.
The deputy leader of the SPD parliamentary group, Matthias Miersch, backed Habeck’s plans. Miersch told the Tagesspiegel: “In order to ensure security of energy supply, we should concentrate on realistic alternatives to Russian gas that also have a short-term effect. For the time being, we may have to resort more to coal, as Economics Minister Habeck suggested.”
In addition, various savings potentials would have to be examined and used. Miersch rejected calls for longer nuclear power plant operating times or fracking in Germany. “Sham debates about nuclear power or fracking are superfluous. We can save ourselves those.” Meanwhile, the FDP is questioning the ban on fracking in natural gas production.
However, the arsenal of countermeasures that Habeck is considering is not yet exhausted with the ramping up of the coal-fired power plants and the planned gas auctions. Immediately after the beginning of the Russian aggression, the Ministry of Economic Affairs had gas procured via the Trading Hub Europe in March. According to the Ministry of Economic Affairs, this purchase program has now been completed. According to the ministry, a total of around 950 million cubic meters of natural gas could be purchased, which was brought into storage by the end of May.
The filling level of the gas storage facilities in Germany is currently around 56 percent. This means that the gas storage facilities are better filled than at the same time in summer 2021. However, if Russian gas supplies continue to be restricted as they have been in the past few days, the target set by the federal government for the coming winter would be difficult to achieve. A filling level of 90 percent is planned by November.
Germany is not the only country in the EU affected by the reduction in gas supplies. France has not received any Russian gas since last Wednesday. Gas from Russia accounts for 17 percent of France’s gas imports. This means that the proportion is lower than in Germany. French grid operator GRTgaz said that despite the halt, there are no immediate gas shortages given the summer season.
The gas storage facilities in France are currently 55 percent full, which is similar to that in Germany. LPG imported from Norway and the USA is also considered an alternative to pipeline supplies from Russia in France.
A decline in Russian gas supplies was also registered in Italy and Slovakia. According to the partly state-owned Slovakian gas supplier SPP, the country has only received 50 percent of the contractually agreed amount from Russia since Friday.
Gazprom had already stopped exports to Denmark and Shell Energy Europe at the beginning of June. The Russian group justified the step at the time by saying that neither the Danish group nor Shell paid for the gas in rubles, as required by Russia. In the wake of the sanctions imposed by the West, Putin demanded in March that Russian gas deliveries must be paid for in rubles.