Germany declares gas crisis emergency after Russia curbs supplies

'Winter is coming': Public has been urged to save energy as coal plants are set to be revived

German Economy Minister Robert Habeck says his country faces a shortage of gas this winter. EPA
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Germany on Thursday declared a “gas crisis” and moved to the penultimate phase of its emergency energy plans after Russia curbed supplies.

The “state of alarm” invoked by Economy Minister Robert Habeck will involve what he called a bitter move to re-open coal plants that were supposed to be consigned to history.

He called on the public to save energy after gas imports through the Nord Stream 1 pipeline from Russia were lowered by 60 per cent, raising doubts over whether storage tanks would contain enough gas for the country during winter.

He said consumers could face a further price squeeze as Russia’s four-month attack on Ukraine continues. Market prices increased by as much as 5.6 per cent after his announcement.

“It’s the summer after a long pandemic. People want to enjoy their time outside ... without thinking about political tribulations,” Mr Habeck said on Thursday. “But winter will come.”

Russian gas company Gazprom last week announced a reduction in Nord Stream’s capacity owing to what it said were technical issues with compressor units.

But this was regarded in Berlin as a pretext to squeeze Germany’s gas supplies, following similar moves against countries including Poland, Bulgaria and Finland.

The squeeze on supplies through Nord Stream, which links Russia to Germany through the Baltic Sea, has also affected onward exports to France, Austria and the Czech Republic. The Nord Stream 2 pipeline project was cancelled in February.

Western powers say Russia is using its rich energy reserves to blackmail European neighbours who have imposed sanctions on Moscow over the war in Ukraine, while continuing to buy Russian oil and gas.

Russian exporter Gazprom last week announced a reduction in supplies via the Nord Stream 1 pipeline. Reuters

Germany began the first stage of its contingency plans in March but said on Thursday that the situation had worsened. The third and final phase would allow the government to step in and ration energy supplies.

As well as reviving coal plants, the government will look to strike deals to buy back unused gas to incentivise companies to save energy.

But the government has so far ruled out as technically unviable any move to extend the life of Germany’s last three nuclear reactors beyond the December deadline to turn them off. Coal power is supposed to be phased out by 2030.

“Even if we can’t feel it yet, we’re in a gas crisis,” said Mr Habeck.

He said the public should not be lulled into a false sense of security by the fact gas storage tanks were currently reasonably full.

“Gas is a scarce resource from now on. Prices are already high, and we have to prepare ourselves for further increases," he said.

Ministers in Chancellor Olaf Scholz’s government blame their predecessors for leaving Germany exposed by relying too much on Russian energy over the years.

Western powers say Russian President Vladimir Putin, second left, is using energy to blackmail his neighbours. AFP

Germany has said it can phase out its use of Russian coal and oil by the end of the year, but will continue to need its gas until 2024, while it finds alternative suppliers and builds the necessary infrastructure to import gas.

The EU is in a similar position after agreeing on a coal ban and a partial oil embargo in its fifth and sixth rounds of sanctions, but there is limited appetite for moving into gas.

German regulators say gas tanks are about 58 per cent full, higher than this time last year. But the aim of having them 90 per cent full by December cannot be attained without further measures, the Economy Ministry said.

In seven scenarios modelled by regulators, three would leave Germany short of gas during the winter, while another three would leave tanks empty next spring. Targets would be met in only one scenario.

The better outcomes would involve reducing gas use by about 20 per cent starting from July, the arrival of liquid gas imports starting from January, and a possible reduction of onward exports.

Some companies have held talks with the authorities over how energy could be rationed if Russian supplies dry up.

Updated: June 23, 2022, 10:25 AM
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