Expert on the consequences of the gas crisis for Bavaria: "Now only withdrawal helps"

Created: 06/27/2022, 13:29

By: Matthew Schneider

Russia is significantly reducing its gas supply - and Germany is in a threatening energy crisis.

Detlef Fischer from the Association of Bavarian Energy Suppliers explains the consequences in an interview.

Munich – Cheap natural gas as a fuel for Bavarian industry has been history since the attack on Ukraine at the latest – and the location is therefore under enormous pressure.

The hope for the future now lies in liquefied gas from the USA and hydrogen from Africa.

But Detlef Fischer, head of the Association of Bavarian Energy Suppliers, warns: We must not make ourselves dependent on imports again.

Expert Fischer on the gas crisis in Bavaria: "The times of cheap energy are over"

Mr. Fischer, Bavaria is a location with a lot of industry.

Are we hitting the high energy prices particularly hard?

Basically, we have the same price level as the rest of Germany or Europe.

It becomes critical when there is a gas shortage in winter.

Then the remaining gas must be distributed by the Federal Network Agency in the best possible way.

Southern Germany with its industry, for example the chemical triangle near Burghausen, could then be severely restricted in its economic power.

Hopefully both the war and the corona-related problems will be overcome in a timely manner.

Will energy prices then return to the usual level?

We don't assume that.

They will probably drop, but the days of cheap energy are over.

This is particularly annoying for consumers because the costs are passed on to them and they will have to sacrifice a larger part of their disposable income for this in the future.

For the industry it's not that bad at first, as long as the competition abroad doesn't get energy on more favorable terms.

You have to remember: oil and liquid gas are traded globally by ship.

If the prices are high for all demanding industrialized countries, all producers have to price them in to the same extent.

Then there is no competitive gap.

However, pipeline gas is out of line because there is naturally no market here.

Germany has long benefited from the Russian lines.

What does the war change?

Russia wants to increase gas supplies to Asia, where demand is huge.

The benefit of cheap energy could be with China once the pipelines are built.

That's why we have to generate as much renewable energy as cheaply as possible in order to be more independent.

Because with imports of any kind, the tankers go there and the pipelines are laid where the most money is paid.

When it comes to the energy transition, we shouldn't make the mistake of relying on just a few suppliers again.

Can we produce our own energy?

Certainly not completely, we will probably always have to import a part, for example in the form of green hydrogen.

However, we should produce the majority of it ourselves as cheaply as possible, also to protect our industrial site from blackmail.

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Saudi Arabia, Africa, Scotland – green hydrogen is to be produced everywhere on a large scale.

We can buy that.

I don't think the producers will sell us this hydrogen as cheaply as quickly as we would like.

They will use it for themselves first - and then only sell the surplus to the highest bidder.

After all, the whole world has to be climate-neutral and needs green hydrogen for this.

So, sooner or later, the same situation will arise as we have with LPG now.

And for industry, it makes sense to go where cheap energy is available in large quantities.

This means that if we don't manage to provide enough energy in Bavaria, our industrial location and thus our prosperity will be in serious jeopardy.

We are already seeing tendencies towards this today.

What capacities do we need?

In Bavaria we need around five times more photovoltaic power, i.e. a total of around 80 gigawatts and around 2,000 additional wind turbines in the five-megawatt class.

We could then use this to cover a large part of our electricity needs in the annual balance.

In addition, we need as many weather- and season-independent energy sources as possible – i.e. biomass, geothermal energy and hydropower.

We also have to expand and store networks on a large scale.

To do this, we also have to save a lot of energy.

We're talking about billions in investments - how profitable are the renewables?

That depends on the conditions.

A year or two ago, the systems still had to be covered by the EEG surcharge.

Because of the high energy prices, however, almost every system is profitable on its own without subsidies.

Basically, that is very welcome.

As an example: If a farmer has a paid-for 100-kilowatt photovoltaic system on the roof, he earns around 100 euros on a sunny day.

That's why many players are getting involved, from homeowners to citizens' cooperatives to energy suppliers.

The investors are queuing up – there is rather a lack of material and personnel.

If you look at the market prices, it is noticeable that electricity is very cheap on sunny and windy days because of the large supply.

Due to the growing power on the grid, the electricity surpluses increase on the days mentioned.

At the same time, we continue to be heavily dependent on fossil fuels during the so-called dark doldrums.

This means that some days we have too much electricity and some days too little.

That's why a storage market has to develop now - otherwise the entire expansion of renewable energies won't help us at all.

What will the storage market look like?

A distinction must be made between long-term and short-term storage.

Battery storage is well suited to balancing out fluctuations between day and night.

They are also useful for private households, for example to buffer their own photovoltaic electricity.

In the long term, i.e. for the difference between summer and winter, hydrogen is an option.

It will probably be produced by energy suppliers in high-performance electrolysers.

In Bavaria in particular, there is great resistance to wind power in many places.

Is that still up to date?

It's no longer about whether a wind turbine is beautiful or not.

It's about the question: do we have enough energy or not?

We currently import 70 percent of our energy from other countries - and have thus shifted the responsibility for production to some questionable countries.

Actually, there was no Bavarian energy policy at all in the last few years, people relied on the federal government and were content with a few energy summits, at which citizens' groups who were against something spoke up.

That was the so-called coalition with the citizens.

A shot in the oven!

Russia hardly supplies any more gas - and America and Qatar only at the high prices that citizens and companies will soon see on their electricity and gas bills.

The fact that we now have such high prices is largely due to

how the energy transition was blocked.

We cannot wage a religious war in every village for years for every photovoltaic system, for every wind turbine and for every power line.

The Bavarian state government shouldn't be constantly complaining about Habeck, he now has to pick up the slack that others have gotten him into trouble, and he's not doing so badly at all.

Will energy ever be cheap again?

In my opinion, the days of carefree use of energy are over.

Nobody really has to fly to Mallorca for a weekend.

Above all, a more volatile market will emerge in the future.

Electricity will be very cheap on sunny summer days, but more expensive in winter when it is dark.

This will result in different offers for customers: some suppliers will offer a uniform price throughout the year, while others will make it possible to only use energy when it is cheap.

With increasingly intelligent networks, it will be possible, for example, to charge electric cars with time-variable tariffs when the sun is shining.

Do consumers also have to rethink?

Yes, energy is a market like any other - and high prices should actually reduce demand and stimulate the expansion of generation.

Smart people buy a crate of beer when it's on sale and not when the price has just gone up.

It'll last a few months.

Only alcoholics need to buy at any price.

Unfortunately, this is also the case with natural gas and oil from Russia.

The only thing that helps now is withdrawal – even if it hurts.

Interview: Matthew Schneider