Gas crisis in Germany: Federal Network Agency fears total failure - that's Habeck's emergency plan

Created: 02/07/2022 17:39

By: Bettina Menzel

Federal Economics and Climate Minister Robert Habeck (Greens) in a press statement on the subject of energy and security of supply with a graphic of gas storage levels (archive photo, June 23).

© IMAGO / Political Moments

The Federal Network Agency fears a total failure of Russian gas supplies.

Minister of Economics Habeck, however, has a gas plan at hand that makes price increases possible more quickly.

Berlin - The Federal Network Agency fears a total failure of Russian gas supplies.

Economics Minister Robert Habeck (Greens) speaks of a "gas crisis" and last week called for the second escalation level in the gas emergency plan.

"From now on, gas will be a scarce commodity," says Habeck.

The specific measures that this could result in have now leaked out.

Gas crisis in Germany: Economics Minister Habeck therefore called for the second escalation stage

The Economics Minister presented the gas emergency plan with a total of three escalation levels after the Russian attack on Ukraine.

In June, Gazprom cut gas supplies to Germany via Nord Stream 1 by 60 percent - Economics Minister Habeck announced the second escalation stage.

While the early warning level one had no concrete consequences for consumers, the alarm level two that has now been declared does have practical consequences.

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Accordingly, there is currently a disruption in the gas supply or an exceptionally high demand for gas, which is leading to a significant deterioration in the gas supply situation.

However, since the market is still able to handle this disruption or demand, Germany is currently at level two - instead of level three, the emergency level.

Federal Minister of Economics Habeck now wants to help the market with a draft law to provide the necessary supply.

Because from July 11, the annual maintenance work on Nord Stream 1 will begin, which usually lasts ten days.

During this time, no gas flows through the pipeline.

There is great concern that Russia will no longer turn on the gas tap afterwards.

Gas crisis: Decision on new draft law could be made on Friday - faster price increases possible

The federal government's new draft law apparently provides for the price levy to be distributed more fairly and evenly among the citizens in the event of a severe gas crisis.

The German Press Agency reported on Friday.

Because in view of the current regulation in the Energy Security Act, there is concern that customers would be charged very differently, depending on which supplier they are with.

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Large importers buy gas on the market and resell it.

However, so far they have not been able to pass on the higher prices to their buyers - because existing contracts provide for caps.

This puts a strain on companies such as Uniper, Germany's largest importer of Russian natural gas, and increases the risk that at some point they will no longer be able to supply gas.

However, if the Federal Network Agency were to formally determine a "significant reduction in the total gas import volumes to Germany" - which has not happened so far - utility companies could pass price adjustments on to customers at short notice.

The amendment to the Energy Security Act now being discussed by the federal government is now attempting to distribute this burden more evenly among customers.

On the one hand, the "district heating supply companies [...] would be allowed to choose the time at which a price adjustment is passed on to the customer, deviating from the contractually agreed times (shorter)." In return, the customers would also have a special right of termination - and could switch to a cheaper supplier.

One way or another, customers have to adjust to more expensive prices - the new regulation would "only" distribute the price increases more fairly.

According to

information, a decision on the draft law could be made as early as Friday, with the newspaper citing government and industry circles.

Robert Habeck (Greens), Federal Minister for Economic Affairs and Climate Protection in conversation with Federal Chancellor Olaf Scholz (SPD) in the Federal Chancellery (archive photo, July 1).

© IMAGO/Florian Gaertner/photothek.de

This happens in the third stage of the contingency plan gas

There are three levels in the contingency plan gas: the early warning level, the alert level, and the emergency level.

Currently (as of July 2nd) the alarm level applies.

The last escalation level, the so-called emergency level, is to be declared if there is an “extraordinarily high demand for gas or a significant disruption to the gas supply”.

State intervention is then envisaged to ensure the gas supply to the protected customers.

The Federal Network Agency is responsible for this.

In a gas emergency, "we cannot classify every operation as systemically important," said Federal Network Agency boss Müller.

“We have to be very careful in critical areas such as parts of the food and pharmaceutical industries.

On the other hand, products and offers that fall into the leisure and well-being area would be of secondary importance.

Swimming pools are probably not in the critical area, as is the production of chocolate chip cookies.”

Gas crisis in Germany: prices could rise so high

There are still twelve weeks until the start of the heating season.

This time must be used to make preparations, warned the President of the Federal Network Agency, Klaus Müller, on Saturday.

He suggests, for example, that gas condensing boilers and radiators be checked quickly and adjusted efficiently.

"Maintenance can reduce gas consumption by 10 to 15 percent," says Müller.

In addition, the families should already be talking about “whether the usual temperature has to be set in every room in winter”.

As far as the price increases are concerned, the head of the network agency told citizens that they would be “shocked” if they received mail from their energy supplier in the near future.

He spoke to the Funke media group about a possible tripling of the previous costs.

In view of the Ukraine war, former Federal President Joachim Gauck believes that the willingness of the population to accept personal deprivation is great.

If politicians take the trouble to discuss difficult issues in detail with the population, then people could accept the sanctions and hold out for a long time, he told the

"You have to trust people."