Energy supply: Parliament gives federal government a free hand for protective gas shield

Status: 08.07.2022 04:43 a.m

In order to protect the gas reserves in Germany, coal-fired power plants can be taken out of the reserve again in the event of a shortage. In the evening, the Bundestag passed the coalition’s draft law on the provision of replacement power plants.

The Bundestag has given the government extensive instruments in the gas crisis to support suppliers and cushion customer prices. In the evening, parliament approved the reform of the Energy Security Act (Ensig), on the basis of which the federal government can react quickly to a further shortage of gas supplies and even higher prices.

In this way, regulations can be put into effect to support importers such as Uniper, who have been hit by the Corona crisis, up to and including state entry, based on the model of the Lufthansa rescue. It also contains regulations on how importers can pass on their additional costs more quickly and evenly.

Coal-fired power plants that are mothballed or scheduled to be shut down can then be restarted in order to take gas-fired power plants off the grid. The law was written in an urgent procedure and still has to be passed by the Federal Council today. This is considered safe.

Habeck promotes “all options”

With the regulations, the government is arming itself for various scenarios in order to be able to act quickly. “We are in a phase where we have to keep all trading options,” said Economics Minister Habeck in the Bundestag.

The federal government is keeping an eye on the scheduled closure of the central gas pipeline Nord Stream 1 for regular maintenance from Monday. It should only last ten days. But Habeck also thinks a longer shutdown by Russia for political reasons is possible. For technical reasons, less than half of the gas ordered is already flowing through the pipeline, for which Russia cites technical reasons.

Government can also support providers

However, since the gas storage tanks are to be filled in the summer for the winter, the government would then have to act. By ministerial decree, coal instead of gas power plants could then go online, which Habeck has already announced as the next step. He also has the option of controlling consumption via specifications such as room temperature.

With regard to prices, the government can also use the law to support the suppliers: the importers currently have to buy the fuel expensively on the market due to failed deliveries and cannot pass it on to customers on the basis of the contracts. This has already prompted Uniper to call for help.

Mechanism for sharing the additional costs

Supporting the suppliers would have the advantage that the increased gas prices would be dampened and delayed by public utilities and then also by industrial and household customers. However, should deliveries from Russia cease completely, state support alone should also reach its limits.

In this case, an additional option is anchored in the draft law: all additional costs of all importers for the replacement procurement of the missing Russian gas would be divided up and distributed evenly but also at short notice to the customers despite existing contracts. The prerequisite would be that a gas shortage is officially determined.

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