FAQ
Status: 07/27/2022 08:56 a.m
Russia continues to turn off the gas tap. From today, Gazprom intends to supply only 20 percent of the maximum capacity via the Nord Stream 1 pipeline. What are the implications for consumers and the economy?
Less and less gas flows from Russia to Europe. The Russian energy group Gazprom, which is controlled by the Kremlin, has announced that as of this morning it will only deliver a good 14 million kilowatt hours of natural gas per hour to Germany through the Nord Stream 1 Baltic Sea pipeline – around half as much as the 27 million kilowatt hours it was last time – and only 20 percent of the possible amount. What are the effects of the recent cut in Russian gas supplies? Can the lost quantities be compensated for this winter? What is in store for consumers and does more gas need to be saved now? tagesschau.de answers some of the most pressing questions.
Is the gas supply in Germany now at risk?
Not for now. In summer, gas consumption in Germany is comparatively low because there is hardly any heating. Industry in particular needs gas at the current time of year. In fact, the gas storage facilities were recently refilled somewhat during the interim complete stop of Russian gas deliveries through the Nord Stream 1 Baltic Sea pipeline – albeit only to a very small extent. In the short term, the gas requirement is covered.
Is there a gas bottleneck in winter?
This can hardly be reliably predicted at the moment. If only 20 percent of the supply capacity flows from Nord Stream 1 in the long term, filling up the gas storage facilities should become a problem. The federal government has set a storage level of at least 95 percent as a target for November 1st. The head of the Federal Network Agency, Klaus Müller, already believes that this is no longer possible. In the best case, 80 to 85 percent is realistic if 40 percent of the maximum capacity comes from Nord Stream 1.
By halving the delivery quantity, it is now even more difficult to reach a high storage level in November. “We are taking precautions so that we can get through the winter,” says Federal Minister of Economics Habeck. The Green politician announced a new energy security package last week. “From building an LNG infrastructure at extremely high speed to filling the storage facilities and reducing consumption – we are working on this with all our might,” says Habeck. “Gas consumption has to go down, the storage tanks have to be full.” The federal government will do whatever is necessary, the minister promised.
Experts are skeptical. “If Russian gas supplies come to a standstill again, real bottlenecks in the winter will probably be unavoidable,” predicts Patrick Herhold, managing director and partner of the consulting firm BCG. He expects a gap of 60 to 70 terawatt hours “if we experience an average winter and if all the measures currently being discussed (such as reducing gas consumption by 15 percent, reducing the average room temperature in German buildings by two percent, new LNG terminals, reactivation of old coal and oil-fired power plants, extension of the three remaining nuclear power plants).
Can the loss of Russian gas be compensated?
That’s the big question. The federal government is currently working on tapping into new energy sources. The increased purchase of liquefied natural gas (LNG) is intended to replace a small part of Russia’s gas volumes. The first two floating LNG terminals in Wilhelmshaven and Brunsbüttel are scheduled to go into operation at the turn of the year. If the hoped-for LNG quantities do not come and if gas consumption remains unchanged, the Federal Network Agency has determined that there will be a gas gap of 19 terawatt hours by February at the latest. However, these calculations are still based on the assumption that Russian gas flows through Nord Stream 1 at 40 percent of its maximum capacity.
Higher LNG volumes and savings in gas consumption could make up for the missing Russian volumes. A reduction in consumption of 15 percent combined with the best possible distribution of the remaining gas volumes in the EU should be sufficient to compensate for the loss of Russian gas volumes, says Karen Pittel, an energy expert from the ifo Institute tagesschau.de.
It is uncertain whether gas imports from other countries can be further increased. The second most important German gas supplier Norway is working on the attack. And the Netherlands, Germany’s third most important source of gas, is currently no longer allowed to produce gas. The government wants to temporarily stop the operation of the most important gas field in Groningen from 2023 due to the risk of earthquakes. However, if the gas shortage worsens, the measure could be postponed, experts believe.
Do we have to save even more gas now?
Yes. In order to avoid a gas bottleneck in winter, the Federal Network Agency recommends that gas consumption should be reduced by 20 percent compared to the average for the last four years. The Federal Government and the EU Commission have drawn up appropriate savings plans. 15 percent energy should be saved. That would be possible, for example, if the Germans no longer showered every day but only every other day and turned down the temperature in the apartments from 22 to 19 to 20 degrees.
But experts have doubts. It remains to be seen whether the 15 percent saving will be achieved everywhere and whether the EU countries will actually act in solidarity when distributing the gas volumes, says Karen Pittel from the ifo Institute. However, the development since the beginning of the year gives hope. According to the Federal Association of Energy and Water Industries (BDEW), gas consumption in Germany fell by more than 14 percent in the first five months of the year.
Do households have to fear that the gas will be turned off completely?
Hardly likely. The three-stage gas emergency plan regulates who and when is still supplied with gas in the event of a shortage. This provides for prioritization. Accordingly, private households are given preferential treatment. In other words, in the event of a gas crisis, industry must shut down first, with private households coming last.
Is gas getting more expensive now?
It can be assumed. According to the comparison portal Verivox, 52 gas suppliers have already announced price increases averaging 50 percent for August and September. From October, gas importers such as Uniper and VNG will also be able to pass on 90 percent of the additional costs to consumers. Chancellor Olaf Scholz (SPD) expects gas prices to rise by two cents per kilowatt hour. That would cost a four-person household an additional 200 to 300 euros a year. Bundesnetzagentur boss Müller even believes that gas bills could triple.
Gas prices on the energy exchanges are also likely to rise again. “It would be surprising if it didn’t happen,” says Florian Starck from the Check24 price portal. Because the demand for gas is relatively constant, and now a replacement must be found for the failure of Russian gas. That drives the prices.
Does the industry have to reduce its production?
This danger is great. The Federal Network Agency has to decide that. If the gas supply is lower than demand, the third stage of the gas emergency plan, the emergency stage, comes into effect. Then the Federal Network Agency can prescribe rationing. Many industries reject such restrictions. The Association of the Chemical Industry warns that supply chains would lack precursors if the industry were to be turned off the gas. The Federal Network Agency relies on market forces. An auction model should start in the summer if possible. Above all, large-scale industrial consumers should be given incentives to save gas. Many companies are already trying to save gas. But the potential is limited.
Where did the last gas that is used in Germany come from?
The share of Russian gas deliveries fell to around 26 percent at the end of June. This emerges from the “Third Progress Report on Energy Security”. With 20 percent, Norway is now the second largest gas supplier in Germany. The Netherlands follow with 11 percent. German gas production only contributes five percent to gas consumption. Liquefied natural gas is becoming increasingly important in gas supply. So far, Germany has mainly purchased LNG from the USA. Deliveries to other major exporters such as Qatar are planned. Several experts believe that Germany’s independence from Russian natural gas is possible as early as 2023 if appropriate measures are taken. “Russia’s ability to use energy as a weapon will quickly decrease. We think it’s likely that Germany will no longer have to import Russian gas by 2023,” explains BCG Managing Director Patrick Herhold.