Can Germany keep warm without Russian gas?

Russia said it could cut gas deliveries to Germany through the Nord Stream 1 pipeline amid rising tensions over the Ukraine crisis, disrupting a route that accounted for 60% of Russian gas supplies to Europe in the first two months of this year.

The threat by Moscow, made in response to increasingly tough Western sanctions, caused European gas prices to surge and raises questions about whether Europe’s biggest economy could weather a full stoppage of Russian gas.

IS THERE ENOUGH GAS IN GERMANY FOR THIS WINTER?

Yes. Germany’s gas storage facilities were just under 35% full last month, a record low for February, according to the German association of gas storage system operators INES, but it is still enough to generate electricity and keep homes warm, in a country where half the 41.5 million households rely on gas heating.

WHAT HAPPENS NEXT WINTER IF THERE IS NO RUSSIAN GAS?

Next winter is when the most severe consequences of any halt to Russian gas deliveries would be felt.

If supplies stopped now and storage facilities could not be filled by the end of summer, Germany might have to ration gas for heating and possibly for generating electricity too.

Under a three-step emergency plan, which is mirrored across the European Union, German government agencies would give priority to households and critical institutions like hospitals.

Some manufacturers which need gas for production could be forced to shut down.

The wider economy would suffer too as energy prices would rocket higher straining households and companies already squeezed by Europe’s energy crunch and rising prices of other goods and services.

The German Association of Energy and Water Industries (BDEW) said manufacturers in Germany faced an almost 25% rise in electricity prices in January compared to the average price paid last year, even before Russia’s invasion of Ukraine.

Given such volatility, German business associations have warned against extending EU sanctions to Russia’s energy sector even though they have supported other sanctions to penalize Moscow for its actions.

Chancellor Olaf Scholz said on Monday, in a statement defending his opposition to sanctions on Russian energy, that the EU had no alternatives to Russian gas “for the provision of public services and the daily lives of our citizens.”

WHAT IS GERMANY DOING TO ADDRESS THE PROBLEM?

The government has unveiled several measures to diversify its energy supplies and reduce exposure to Russia.

Germany wants to have its first liquefied natural gas (LNG) terminal ready in two years and has told its gas market trading hub to buy LNG worth 1.5 billion euros ($1.6 billion) to be shipped to another EU state for onward delivery by pipeline.

Berlin also wants to extend the life of coal-powered plants so they can be reactivated to plug any power supply gap, a measure that could help save gas for heating homes.

Coal accounted for 27% of power production last year, while 15% came from gas.

But Germany’s economy and environment ministries have dismissed the idea of extending operations of the country’s last nuclear power plants, which analysts have said could also help reduce reliance on gas.

Source: ghextractives.com