Thursday, July 7

Germany raises alarm level over Russian gas crisis


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After acknowledging that the measure was imminent, the German government has already officially announced this morning that it is raising the alert level due to lack of gas supply, which remains in the second of the three planned steps. The last of them would force rationing measures. Economy Minister Robert Habeck has justified that the reason is the reduction of gas supply by Russia, that last week cut its deliveries by 60% through the Nord Stream 1 gas pipeline, together with the persistently high prices of this raw material.

“The situation is serious”, Habeck acknowledged, “the strangulation of gas supplies is an economic attack against us”. The minister claims that the strategy of the Russian president, Vladimir Putin, is to generate uncertaintyraise prices and divide.

“We are in a gas crisis. Gas is now a scarce commodity. Prices are already high and we have to prepare for further increases, which will put an extreme burden on many people and many entrepreneurs,” he warned. Even so, he insists that security of supply is still guaranteed today.

The top priority of the German government is now to fill the gas storage tanks, which are at 56% of their total capacity. This percentage is higher than usual for these dates in a normal yearl, before the invasion of Ukraine, but in the current context of scarcity it is not enough to guarantee supply in the winter months, the part of the year with the highest consumption, and therefore Habeck is hurriedly looking for alternative suppliers, as well as an expansion of renewable energies.

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Recover the reserve of coal terminas

The German Government has also decided to recover coal-fired power plants from the reserve and the Minister of Finance, Christian Lindner, has proposed withdrawing subsidies for electric cars, since a 40% of the electricity consumed in Germany is produced from gas, but all of them are measures that will take months to have an effect on consumption. “Nothing we do will change the situation from one day to the next,” Habeck acknowledged, “but from one day to the day after tomorrow it should be possible.”

The alert level decreed today responds to a significant deterioration in supply. However, the market can still handle this disruption or demand.”

According to the emergency protocol, the alert level decreed today responds “to a significant deterioration in the gas supply situation.” However, “the market can still handle this disruption or demand,” according to the minister. Utilities should not yet have the opportunity to raise their gas prices under the Energy Security Act.

«LThe reason is that we want to continue monitoring the market», said Habeck, who recalls that two conditions must be met for the corresponding price readjustment clause: on the one hand, having declared the level of alarm or emergency. On the other hand, the Federal Network Agency must have determined a “considerable reduction in the total gas import volumes to Germany” on this basis.

Only then are companies allowed to raise prices to an “appropriate level.” Habeck calls, on the other hand, for a voluntary reduction in gas consumption throughout the country. « From now on, we must consider that gas is a scarce commodity. All consumers, both in industry and in private households and public institutions, must reduce consumption as much as possible. That depends on whether we can get through the winter,” he harangued the population. German companies have been responding to this government request for some time now.

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Gas consumption by industry has been reduced by 8% in recent months, when the objective proposed by the government is a consumption of 10% less than the previous year at this time. “And in private, we must always think that every small gesture we make, even if it seems insignificant or supposedly banal, multiplied by 41 million homes, will have an important effect and can make a difference when the critical moment arrives,” he addressed private consumers.

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