Gas supply: Germany triggers “alert level”

Gas supply: Germany triggers “alert level”

The German government is bringing “alert level” its opinion on the supply of gas, in accordance with the EU regulation on security of supply, following the reduction of gas flows from Russia.

Germany is the biggest net importer of Russian fossil gas in Europe. Russia’s state-owned gas company Gazprom has cut gas flows through Nord Stream 1 and TurkStream, citing mainly technical issues.

“We are in the midst of a gas crisis. Gas is a rare commodity from now on. Prices are already high, and we need to be prepared for further increases”German Vice-Chancellor Robert Habeck said Thursday.

“Even if volumes of gas can still be bought on the market and are still stored: the situation is serious, and winter is coming”he added.

1st EU country to declare the alert level

Germany is the first EU country to declare the “alert level”, although a similar measure would have been considered in Italy. Moreover, Germany and Italy are by far the largest buyers of Russian gas.

After Gazprom reduced flows through Nord Stream 1 to 40% capacity, citing maintenance issues “assembled from scratch” related to sanctions and assessing different scenarios for the future, the German government was forced to raise the alert level.

“This situation has always posed a threat”Habeck told reporters, citing the preparedness measures the new German government has put in place.

These include the hasty establishment of liquefied natural gas (LNG) import infrastructure and the granting of significant funds to the German market operator Trading Hub Europe (THE), which received around 16 billion euros for the purchase of gas.

The German government had previously resolved to burn more coal to save gas and to reimburse industrial consumers in times of high gas demand.

Paragraph 24

The German government overhauled its energy security law from the 1970s in the wake of Russia’s attack on Ukraine. In doing so, he crafted the now famous paragraph 24.

If prices on gas markets explode and the alert level is reached, this paragraph authorizes gas distributors to raise prices unilaterally. German media had initially attributed Germany’s reluctance to call things by their proper name to fears that consumers would be subjected to exorbitant prices.

“This mechanism may be necessary in certain situations to avoid a collapse of the energy supply. But it also has drawbacks”explained Mr. Habeck.

For now, the German government is relying on a technicality. For it to enter into force, the federal network agency must publish a communication in the federal official gazette.

Although this is not happening at the moment, the next critical date is already imminent. On July 11, Nord Stream 1 will enter scheduled maintenance, which usually lasts about ten days, Habeck said.

It is feared that once flows drop to zero, they will not resume. “We will then adopt new measures”said Mr Habeck, interviewed by EURACTIV.

old problems

“The situation would be very different today if Germany had not lagged behind in the development of renewable energies”added the Vice-Chancellor.

As part of the Energiewende, Germany’s energy transition strategy, the country has phased out nuclear and coal power, while increasing its reliance on fossil gas for a transitional period.

In the space of two decades, German gas imports from Russia have increased significantly, from 35% imports in 2008 to 55% in 2015.

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