Germany escalates to ‘alert level’ over security of gas supply

Germany has taken a drastic step by escalating warnings to the "alert level" in accordance with EU security of gas supply regulations. [EPA-EFE/CLEMENS BILAN]

The German government has escalated its warning over gas supplies to the “alert level” in accordance with the EU’s security of supply regulation following reduced gas flows from Russia.

Germany is the largest net importer of Russian fossil gas in Europe. The state-owned gas company Gazprom reduced gas flows through Nord Stream 1 and TurkStream, citing mainly technical issues.

“We are in a gas crisis. Gas is a scarce commodity from now on. Prices are already high, and we have to be prepared for further increases,” said Robert Habeck, Germany’s vice-chancellor, on Thursday.

“Even if gas volumes can still be procured on the market and are still being stored: The situation is serious, and winter is coming,” he added.

Germany is the first EU country to escalate the warnings to “alert level,” although a similar measure has reportedly been considered in Italy. Germany and Italy are by far the biggest buyers of Russian gas.

After Gazprom had reduced flows through Nord Stream 1 to 40%, citing “trumped-up” maintenance issues linked to sanctions and calculating scenarios in the future, the German government was forced to escalate the warning level.

“This situation was always a threat,” Habeck told journalists, citing the preparation measures the newish German government had put into place.

For one, the rushed infrastructure to import liquefied natural gas (LNG) and the ample funds provided to the German unified market operator Trading Hub Europe (THE), which has received around €16 billion to purchase gas for Germany.

The German government had previously resolved to burn more coal to save on gas and pay industrial consumers off in times of high gas demand.

Berlin to launch 'painful' gas saving scheme to secure next winter’s supply

Faced with low gas flows from Russia, the German government will burn more coal in summer, pay industry not to use gas and provide billions of euros in loans to merchants for gas purchasing.

Paragraph-Threat

The German government had revamped its 1970s energy security act following Russia’s attack on Ukraine. While doing so, it created the now infamous paragraph 24.

Should prices in the gas markets explode and the warnings escalate to the alert level, it empowers gas wholesalers to jack up prices unilaterally. German media had initially attributed Germany’s reluctance to call a spade a spade to concerns that consumers would be subject to sky-high prices.

“This mechanism may be necessary in certain situations to prevent a collapse of the energy supply. But it also has downsides,” explained Habeck.

For now, the German government is relying on a technicality. For it to come into effect, the federal network agency must publish a notification in the federal gazette.

While this won’t happen for now, the next critical date is already coming up. On 11 July, Nord Stream 1 will enter planned maintenance, which usually takes about ten days, Habeck explained.

There are fears that once flows are down to zero, they may not resume. “Then we will enact new measures,” Habeck said when asked by EURACTIV.

The Green Brief: when to call a crisis a crisis

As weeks go by, EU countries are gradually seeing their deliveries or Russian gas cut off or seriously reduced. Yet, EU politicians refuse to call the gas crisis by its name.

Old burdens

“How different would the situation be today if Germany had not lagged on expanding renewables,” the vice-chancellor added.

Germany’s Energiewende saw the country phase out nuclear power alongside coal while increasing dependence on fossil gas for a transitional period.

Within two decades, German gas imports from Russia increased significantly, going from 35% imports in 2008 to 55% in 2015.

Why Germany should refuse the Russian gas purchase right now

A full embargo on imports of Russian energy would be the EU’s most significant step towards halting Russian aggression to date, write Dmytro Kryvosheiev and Margaryta Khvostova.

[Edited by Alice Taylor]

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