Following Russia’s invasion of Ukraine, Germany, which depends on Moscow for most of its gas, is seeking to fill its gas storage facilities and phase out imports of Russian energy.
Germany’s economy minister said the new measures would include increased use of coal-fired power plants as well as an auction system to start in the coming weeks to encourage industry to consume less.
It is also planning 15 billion euros ($15.8 billion) in credit lines for Germany’s gas market operator, through state creditor KfW, to fill gas storage facilities faster, it said. a government source who asked not to be named.
Economy Minister Robert Habeck said that depending on the situation, the minister, who is responsible for the security of energy supply in Europe’s largest economy, will take further action.
Two people familiar with the situation, speaking on condition of anonymity, said this could include the launch of the second phase of Germany’s gas emergency plan.
The second phase, which comes into effect when there is a high risk of a long-term gas shortage, would allow utilities to pass on high gas prices to customers and thus help reduce demand.
The German chemical industry association, VCI, which represents the sector most at risk from gas cuts, said the cut in supplies had not yet caused any acute problems.
PAINFUL BUT NECESSARY
The measures announced on Sunday follow a package unveiled earlier in the year to provide energy companies and the German economy with support payments to deal with the Ukraine crisis, which has led to soaring electricity costs.
“The tense situation and high prices are a direct consequence of (Russian President Vladimir) Putin’s war of aggression against Ukraine,” Habeck said in a statement.
“What’s more, this is clearly Putin’s strategy to make us insecure, to drive up prices and to divide us. We will not let that happen. We will fight back decisively, precisely and thoughtfully.”
The Economy Minister said that the return of coal-fired power plants to the panorama could add up to 10 gigawatts of capacity in the event of a critical gas supply situation, adding that a corresponding law would be submitted to the upper house of the Parliament on July 8.
“It’s painful, but it’s a pure necessity in this situation to reduce gas consumption,” said Mr Habeck, a member of the Greens party who has been pushing for a faster exit from carbon-intensive coal. .
“But if we don’t, then we run the risk that the storage facilities won’t be full enough at the end of the year, towards the winter season. And then we are politically blackmailed.”
Germany is targeting storage levels of 80% in October and 90% in November.
Data from Gas Infrastructure Europe shows German gas storage levels were 57.03% as of June 17, down from 29.69% on February 24, the day Russia invaded Ukraine.
($1 = 0.9526 euros)