On 23 June, Germany triggered the second stage of their emergency gas plan in response to the cut in Russian gas supplies since 14 June and the high price levels. A gas crisis team, which was already set up when the first emergency level was declared in late March, meets daily to monitor and assess the situation.
While the security of supply is currently still guaranteed, “the situation is tense”, according to the German Federal Ministry for Economic Affairs and Climate Action. If the Russian gas supply remains low, it will complicate achieving storage level targets by winter. Federal Minister for Economic Affairs and Climate Protection Robert Habeck called the current situation “serious”, referring to gas as a “scarce commodity”.
“We mustn’t delude ourselves: cutting gas supplies is an economic attack on us by Putin,” said Habeck in a statement. “It is Putin’s strategy to create insecurity, drive up prices and divide us as a society. We defend ourselves against this. But it will be a rocky road that we as a country now have to walk. Even if you don’t feel it yet: we are in a gas crisis.”
The second stage, the so-called ‘alert level,’ of the contingency levels is to be declared when there is a significant disruption in the gas supply, but the market is still able to cope. If the most severe continency level is declared, the government would be allowed to take over as the national energy supply coordinator.
As part of the contingency measures, the German Government could bring idled fossil fuel power plants back online. On 19 June, the German Government already announced that it will bring some coal-fired power plants back online to reduce gas consumption in power generation. A corresponding law is currently being processed in parliament.
“We are bringing coal-fired power plants onto the market and reducing the amount of gas,” said Habeck. “That’s painful, coal-fired power plants are simply poison for the climate. But we have to do it for a transitional period to save gas and get through the winter.”
Germany currently has 1,886MW of lignite capacity as the emergency reserve, which is more than 10% of the country’s operational lignite capacity. Some of these plants were set to close permanently as part of the country’s coal phase-out, but if the emergency is declared that could be delayed for two more years.
The national security reserves are not new: the German Parliament approved the transfer of lignite power plants about to be decommissioned into an emergency reserve, the ‘Sicherheits-bereitschaft’, in 2016. Power plants in the reserve are mothballed for four years before being permanently phased out.
The measure is part of a bigger security of supply plan, consisting of a grid reserve (‘Netzreserve’) for when demand is higher than usual and a capacity reserve (‘Kapazitätsreserve’) for extreme and unexpected situations. Only if those two reserves are not enough, the security stand-by can be utilised. Germany’s grid reserves consist of gas-, hard coal- and oil-fueled power plants, while the capacity reserve is made up of only natural gas plants. The three reserves together total 10,442MW of capacity.
Germany’s plans are cause for worry for environmentalists, as the emergency plans could complicate the country’s target to phase out coal by 2030 and its overall energy transition goals. Germany recently accelerated the phase-out and is expecting to decommission almost as much lignite capacity in the next three years as it has in the last 10, but it is uncertain what effect bringing back online some of these plants would have.
At the same time as bringing back idled power plants, the German Government also puts focus on saving gas and alternative power sources. Through a gas auction model that will be launched this summer, industrial consumers will be incentivised to save gas. The expansion of renewable energy will be accelerated in an “unprecedented way”, according to the minister.
“It will be a national effort,” Habeck explained. “But we can overcome them in solidarity with each other – federal, state, and local governments; citizens; companies; civil society. Saving energy is the order of the day for the next few months. All consumers – in industry, public institutions, and private households – should reduce their gas consumption as much as possible so that we can get through the winter.”
Earlier this month, IEA chief Fatih Birol warned about the possibility of Russian gas being cut off completely from Europe in an interview with the Financial Times. Birol suspects that the gas cut-offs are meant to prevent Europe from filling storage. If that happens, Germany can not rule out further measures, such as gas rationing.
“If further measures are necessary, we will take them,” said Habeck.