Germany Faces Natural Gas ‘Crisis’

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Germany launched the second stage of its three-stage emergency natural gas supply plan, warning that the biggest economy in Europe is in “crisis” and that storage goals for the winter are in jeopardy because Russia has scaled back energy delivery to numerous nations, says an article published in APNews.

Threatening climate goals 

According to the government, the choice was made in response to Russia cutting back on natural gas exports beginning last week and rising energy costs fueled by the conflict in Ukraine. 

As energy tensions between Russia and the West rise, industrial users are being urged to use less natural gas, and Germany and other nations are returning to coal as an alternative, endangering European climate goals.

“Even if we can’t feel it yet — we are in a gas crisis,” Economy and Energy Minister Robert Habeck said.

Reduced natural gas

While European Union nations are rushing to restock stocks of the fuel used to generate electricity, power industry, and heat homes in the winter, Russia last week curtailed natural gas to Germany, Italy, Austria, the Czech Republic, and Slovakia. As it reduced flows through the Nord Stream 1 pipeline, Europe’s main natural gas pipeline, travelling under the Baltic Sea to Germany by 60%, Russia’s state-owned energy giant Gazprom laid the blame on a missing item shipped to Canada for repairs.

Economic conflict

First-stage warnings concerning supplies and requests for people to conserve have also been issued by other nations, including as Austria and the Netherlands. 

Two of Europe’s largest consumers of Russian gas, Germany and Italy, have criticised the country’s gas reductions as politically motivated and warned that they could cause the economy to weaken even more.

“We are in an economic conflict with Russia,” said Habeck, accusing Moscow of trying to destroy European unity and the solidarity it has shown with Ukraine.

Storage facilities

Along with the reductions, gas has recently been cut off to Poland, Bulgaria, Denmark, Finland, France, and the Netherlands.

The German government claimed that current gas needs are being satisfied and that its storage tanks are now 58 percent full, up from this time last year. 

However, it stated that without additional steps, the target of achieving 90 percent by December won’t be achievable.

Habeck stated that Germany would not retaliate by shutting off its neighbours. Instead, it was advising businesses and locals to cut back on consumption as much as possible.

Reduced demand

“The prices are already high, and we need to be prepared for further increases,” Habeck said, warning that “this will affect industrial production and become a big burden for many producers.”

Despite that, Germany’s energy industry lobbying group BDEW said it supported the government’s decision. 

Calculations show that businesses have already reduced their demand by 8% in recent months. To encourage further savings, the government plans to hold auctions paying large industrial consumers to relinquish their contracts.

Price surges

According to Habeck, the actions being taken, such as giving gas distributors and utility firms substantial loans to deal with price spikes, were required to stop the collapse of the energy markets.

The economy would suffer severely if Germany were to be forced to ration gas for industrial users in order to protect houses, schools, and hospitals.

Liquefied natural gas

Habeck said people could do their part by adjusting their home heating system now and saving up to 15% during the cold months.

“It sounds banal sometimes, but you have to multiply that banality by 41 million households,” he said.

Coal-generating capacity

Since declaring the first phase of its emergency plan in March, Germany and other nations have been attempting to obtain more gas from neighbours like the Netherlands and Norway as well as liquefied natural gas from producers outside of Europe, including the United States, as the EU looks to reduce its reliance on Russia by two-thirds by year’s end.

The German government said on Sunday that it would decrease the use of gas for generating energy and increase the burning of more polluting coal, much to the fury of environmentalists.

According to Carlos Torres Diaz, senior vice president at Rystad Energy, the coal-generating capacity that may be restarted could supply 9% of the nation’s electricity requirements while saving a fourth of the gas that industry currently consumes.

Massive progress

Habeck placed part of the blame on political decisions by past German governments to rely on Russia for energy supplies and a failure to establish alternatives.

“How different things would be if we had really made massive progress in energy efficiency and the expansion of renewables over the last few years instead of simply remaining at a standstill,” he said.

His ministry recently unveiled a package of measures to boost the roll-out of solar and wind power in Germany. 

The government has so far ruled out keeping its three remaining nuclear plants online beyond the end of this year.

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Source: APNews

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