Economics Minister Habeck: "From now on, gas is a scarce commodity" - What does that mean?

Created: 06/24/2022, 07:58

By: Corinna Maier, Daniel Müksch

Federal Minister of Economics Robert Habeck has declared the gas emergency plan on alert.

© picture alliance/dpa/Michael Kappeler

Natural gas is still available everywhere, albeit much more expensive.

But with a view to the winter, the federal government is extremely concerned.

She has now declared the alert level in the gas emergency plan.

Berlin/Munich – In view of the significantly reduced gas supplies from Russia, the federal government has declared the gas emergency plan on alert.

"Currently, the security of supply is guaranteed, but the situation is tense," said the Ministry of Economic Affairs.

"From now on, gas will be a scarce commodity in Germany," agrees Minister Habeck.

The emergency plan has three levels: The alarm level now declared is the second.

The third would be the emergency level.

Here are the most important questions and answers.

What is the Gas Contingency Plan?

The emergency plan has three escalation levels and gives the government different degrees of scope for action.

The first level is the early warning level, followed by the alert level and the emergency level.

The federal government announced the early warning stage for the first time at the end of March. It enables the gas market to be monitored closely under the direction of the Ministry of Economic Affairs.

The state is not yet actively intervening in the gas market, the market players have to procure more gas themselves in order to fill the gas storage tanks as best as possible.

Gas alarm level as a signal - from the third level, the federal government will act

What does the alert level mean?

The alarm level is a clear signal to industry and private consumers: gas consumption must fall in order to prevent a shortage in the coming autumn and winter.

Active interventions are only possible in the third and last emergency level.

The federal government can provide support – for example by helping out gas suppliers with loans.

Why is the alert now?

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Russia had recently reduced its gas supplies through the Baltic Sea pipeline Nord Stream 1 by around 60 percent.

The goal of the federal government, which has now been enshrined in law, to have the German gas storage tanks 90 percent full by November, can therefore only be achieved through additional measures.

The storage tanks are currently about 58 percent full.

According to the federal government, there is a risk of "a significant deterioration in the gas supply situation" - the declaration of the alarm level is therefore "necessary".

Russia continues to deny that the gas throttling over the Baltic Sea pipeline Nord Stream 1 was politically motivated.

Rather, sanction-related delays in repair work are the cause of the problem.

According to Russian information, a Siemens turbine for the pipeline is stuck abroad.

Save gas and build reserves: Experts give tips on gas consumption

To what extent are private consumers affected?

The gas price has once again risen massively on the markets.

The exploding costs are far from reaching consumers in full.

This is also due to the fact that companies still have to comply with existing price agreements.

That could change if the emergency is declared.

Otherwise there is a risk of bankruptcies among gas importers and suppliers because they have to buy expensive gas but are not allowed to pass on the rising prices.

In this case, the federal government is likely to share the burden between the gas industry and consumers to prevent a collapse in the industry.

Experts are advising consumers to start saving for back payments now, get their heating systems running efficiently and talk to their utilities if the bills are overwhelming.

The Federal Association of Consumer Centers (vzbv) calls on the federal government to prevent excessive price increases and to launch another relief package.

Is there a supply bottleneck now?

No, not for now.

The gas storage facilities are currently 58 percent more full than in the previous year.

"At the moment we only see that natural gas could be missing in the planning," explains Tobias Federico, head of the energy consulting company Energy Brainpool.

A spokeswoman for Stadtwerke München (SWM) also confirms: “Currently, the security of supply is given.” However, the relevant natural gas storage facilities in Bavaria are filling up more slowly than the national average, according to the Association of Bavarian Energy and Water Industries.

Gas alternative: Government prepares reactivation of coal-fired power plants

Is Germany threatened with a cold winter?

If the gas storage tanks are not sufficiently full, supply could become difficult in the coming winter.

Proposals from the Network Agency boil down to reducing the minimum heat in the apartments or changing the Occupational Safety and Health Ordinance so that heating can be saved in the companies.

On the other hand, switching off the gas supply by the hour is out of the question, also because this would not be technically practicable.

In addition, the federal government continues to work on additional gas purchases and also prepares the reactivation of coal-fired power plants.

What does the economy say?

The Federation of German Industries expresses understanding and approval of the step, as does the Bavarian Chamber of Industry and Commerce.

However, IHK boss Manfred Gößl calls for significantly more speed in order to cope with the acute emergency.

"We are running straight into an unprecedented energy crisis with unforeseeable consequences for Bavaria as a business location," warns Gößl.

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