The German government announced on Sunday that it would pass emergency laws to reopen power plants and auction off gas supplies to industry to motivate businesses to curb consumption. The move demonstrated the depth of concern in Berlin about possible gas shortages in the winter months. “This is bitter, but in this situation it is necessary to reduce the use of natural gas,” said German Finance Minister Robert Habeck, a member of the Greens. Russia has cut capacity on its main gas export pipeline to Germany by 60 percent this week, sending ripples across the continent as Western officials convinced Moscow was equipping its gas exports in response to EU sanctions after the full invasion of Ukraine. Italy, which has also seen a drop in gas supplies from Russia, is expected to announce emergency measures in the coming days if supplies are not restored. Habeck said Berlin was drafting a new law to temporarily restore up to 10 gigawatts of inactive coal-fired power plants for up to two years. This would increase Germany’s dependence on coal for electricity production by up to a third. “The situation is serious,” Habeck said. “Obviously, Putin’s strategy is to upset us, to raise prices and to divide us. . . We will not allow this to happen. “ The plan runs counter to Germany’s climate policy. aims to phase out coal by 2030, as it is much more carbon-intensive than natural gas. Germany’s three remaining active nuclear power plants have a capacity of 4 gigawatts and are scheduled to be shut down by the end of this year. Their lifespan will not be extended as the government has concluded that technical barriers and security barriers are very high. Prior to the Russian invasion in February, Germany imported 55 percent of its gas from Russia. In recent days, Russian gas exporter Gazprom has reduced supply volumes via the Nord Stream 1 (NS1) pipeline across the Baltic Sea to Germany, blaming Canadian sanctions that left Siemens Energy’s pumping equipment blocked in Montreal. Germany and its European allies have denied Gazprom’s claims, arguing that any technical issues were a pretext for Moscow’s retaliation against EU sanctions. . European gas prices, which are already approaching record levels, rose further last week in response to the latest supply cuts. Rising energy prices are fueling inflation and the cost-of-living crisis across Europe, which central banks are struggling to tackle without leading the region’s economy into recession. German Chancellor Olaf Solz called the country’s dependence on Russian energy “a mistake of German economic policy” and told the DPA newswire that previous governments had lost the opportunity to create alternative gas supply routes. Germany plans to install four floating liquefied natural gas (LNG) terminals and has given priority to replenishing gas storage tanks that can be used in the winter. It is currently 56 percent full and Hubeck wants to reach 90 percent by December. “We need and will do everything we can to store as much gas as possible,” Habeck said, calling it a “top priority” and adding that “otherwise it would be very tight in the winter.” Germany aims to reduce normal consumption by about a fifth without resorting to deltas, while increasing supplies from Norwegian pipelines and LNG imports. However, this could leave supplies dangerously tight, especially if it is a particularly cold winter. Average temperatures in Germany are 6 degrees Celsius or lower from November to April, according to the German gas regulator. Analysts say German storage, if full to 90%, could only cover two or three months of normal winter consumption if Russian supplies are completely cut off. Germany will also introduce an auction mechanism for industrial gas users, Habeck said. The companies that reduced consumption will be compensated, a person who knows the government’s plans told the Financial Times, but the details have not yet been finalized. Last year, gas-fired power plants accounted for 15 percent of German electricity generation. By the end of May, Germany had 31.4 gigawatts of coal-fired power plants and 27.9 gigawatts of gas stations on the grid, according to regulations. The 10 gw of coal capacity that will be put back on the grid represents just under 5 percent of Germany’s total capacity.
