FILE PHOTO: German Economy and Climate Minister and Vice Chancellor Robert Habeck visits a salt cavern facility of the gas trading company VNG AG during a two day tour under the heading of "Economy and work in times of crisis", due to Russia's invasion of Ukraine, in Bad Lauchstaedt, Germany July 28, 2022. REUTERS/Annegret Hilse/File Photo

Spain advances in the energy crisis. The government prescribes minimum and maximum temperatures for cooling and heating in public sector buildings, but also in other publicly accessible buildings such as department stores, hotels, cinemas and offices. Environmental organizations are now demanding that the federal government follow suit. Should Germany follow a similar regulatory path? Should the “should”, which occurs several times in the Energy Security Act, become a “must”?

For buildings belonging to state institutions, the answer can immediately be yes – on the one hand because the state can enforce this directly and relatively easily. On the other hand, because everything else would deliver a bad picture. The state’s credibility during all further steps would be at stake if it did not do so.

The question becomes more complicated in relation to companies and private households. Here the federal government has announced comparatively tentative guidelines. These include measures to increase the efficiency of gas heating, such as obligatory heating checks and lower flow temperatures. Companies that have introduced energy and environmental management systems are to be obliged by regulation to take energy-saving measures. This would affect larger companies with energy consumption of more than ten gigawatt hours, which, for example, make use of statutory privileges that reduce electricity tax.

But even the scientific advisory board of the Ministry of Economic Affairs criticized Minister Robert Habeck’s policy. These external consultants say: energy-saving dirigisme and in particular the recently decided gas levy block the steering effect of the price. The economists consider a “price shock” to be indispensable. From their point of view, only this will really increase the willingness to save energy.

Indeed, prices passed on one-to-one to consumers would be the most systemically effective means of saving. The state should not weaken this efficient instrument – knowing that it is also the hardest. Knowing that he must protect those in society who would be deprived of their livelihoods by rising energy prices. The Advisory Board has supplied a mixed model. Households are to be offered a large proportion of the respective previous year’s gas consumption, for example 80 percent, at moderate prices. Everything that is consumed beyond that would be significantly more expensive because it would have to be paid for at the market price.

The suggestion is plausible. But for the most vulnerable in society, who are already up to their necks in water, it would have to be flanked by effective socio-political relief measures. Otherwise this crisis could develop the social explosive force that is often ascribed to it.

There is potential to save energy beyond what has already been achieved in some cases. This is shown by the latest reductions in gas consumption by a number of industrial companies. This is also shown by the increasing successes in so-called demand side management in industrial electricity consumption. Companies do without electricity at certain times, which is then available to others.

But such progress is gradual and will not be enough to achieve the 20 percent reduction in gas consumption that the Federal Network Agency considers necessary by the coming winter. That is why the federal government must act – using the price effect wisely.

Which path the federal government now chooses is being closely monitored – and not just domestically. The entire European Union, which recently got together for a joint gas savings target of minus 15 percent, is observing Germany’s efforts and next steps very closely.