Germany plans $216bn green energy investment to ease Russian gas reliance

Electric charging infrastructure and hydrogen fuel to receive financial boost amid Ukraine crisis

Pressure on Germany to end its Russian gas reliance comes as it turns its back on coal and nuclear power. AP
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Germany plans to spend €200 billion ($216bn) on fostering renewable energy to ease the reliance on Russian gas which has left it vulnerable to the fallout from the war in Ukraine.

Finance Minister Christian Lindner said the four-year outlay would go on electric charging infrastructure, promoting hydrogen fuel and modernising industry in Europe's biggest economy.

He said the green energy budget was a “means for the transformation of economy, society and state” and would promote renewable power sources he described as “freedom energy”.

While the ruling coalition in Berlin has made climate-friendly policies a priority since before war broke out in Ukraine, the pressure to act quickly has been raised by demands at home and abroad to cut energy ties with Russia.

Chancellor Olaf Scholz has announced plans to build two import terminals for liquefied natural gas (LNG), which can be shipped across oceans from suppliers other than Russia but requires special facilities and low temperatures.

Analysts at the Oxford Institute for Energy Studies said LNG diversions to Europe and more pipeline imports from countries such as Norway and Azerbaijan could mitigate the energy crunch while those terminals are being built.

“While the market is very tight, more LNG could be diverted to Europe, being imported either directly into France, Belgium, the Netherlands, Italy or via the UK acting as a land bridge,” they said.

German Chancellor Olaf Scholz handed over the Finance Ministry to Christian Lindner last year. Reuters

The coalition deal agreed on last year envisages 2 per cent of Germany’s land area being used for wind turbines and every suitable new roof being covered with solar panels.

Mr Lindner, the leader of the liberal Free Democrats who has previously called for private investors to absorb more of the cost of going green, said public spending should come alongside deregulation to speed up the eco-friendly transition.

He told German television he was “excited to hear proposals to speed up planning and reduce bureaucracy so that these powerful tools can be used effectively”.

The drive to cut out Russian gas comes as Germany turns its back on nuclear power and strives to eliminate coal by 2038, knocking out some possible alternatives to gas.

Officials have said that Germany can live without Russian gas this spring and summer but that replacements will be needed to keep the lights on by winter.

This was echoed by the Oxford analysts, who said in a paper that measures to top up storage tanks this summer could "push back the period before large-scale demand destruction might occur".

Some politicians have floated the idea of Germany extending the life of its last three nuclear power stations, scheduled to be disconnected from the power grid by the end of this year.

But ministers and nuclear plant operators have played down that idea, and the Green party’s presence in the coalition in Berlin means any longer-term rethink is unlikely.

Updated: March 07, 2022, 12:53 PM
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