SSwimming pools are closed, hot water is occasionally turned off or rationed, cities turn off fountains and prepare heated halls. Thoughts of a cold winter are already fueling some concerns: is a prosperous country turning into a country with an energy shortage?
Such a horror scenario is by no means certain, even if the gas pipelines from Russia were to be shut down for more than a few days. It is still difficult to predict whether and when natural gas will actually have to be rationed. After all, Germany’s energy supply is better off today than it was at the beginning of the Russian war of aggression in Ukraine. The gas storage tanks are about 65 percent full instead of about 25 percent in March.
The share of Russian gas deliveries is estimated to be around 30 percent, not 55 percent as in 2020. Other countries such as Norway are stepping in, and most importantly, ships are bringing more liquefied natural gas (LNG) to Europe. The first LNG terminals are built on the coast. Energy is also saved: Adjusted for temperature, gas consumption in May was around a tenth below the figure for the same month last year.
Words should have been followed by deeds earlier
The gas should be enough for the next few months, also because household consumption will be lower until the start of the heating period in October. However, it will be tight to steer the gas supply safely through the winter without Russian help. If the federal government, with Economics Minister Robert Habeck (Greens), tackled a lot and called for energy saving, words should have been followed by more action earlier. In May, gas-fired power plants were even more in use than a year earlier. They should have been paused quickly and taken out of power generation. The replacement by coal-fired power plants is only now beginning. The gas used here, which accounts for around 13 percent of annual gas consumption here, could have been stored in storage long ago.
In addition to switching power plants for electricity generation, households and companies also need to reduce gas consumption in order to reduce dependence on Russia. Because how well Germany and Europe get through the winter depends on several factors, some of which the government can hardly influence: Is the Russian state-owned company Gazprom supplying some or more natural gas again to make money? How much comes from other countries? How much does consumption increase during the heating period? How well can companies do without gas? How cold will the winter get?
This uncertainty, largely driven by Russian President Vladimir Putin’s policies, is driving wholesale prices. The alternatives to Russian pipeline gas are also usually more expensive: Those energy companies in particular who have to buy gas at current prices due to throttling and maintenance of the Nord Stream 1 Baltic Sea pipeline are feeling this in order to continue to supply their customers. Even without gas rationing, the mere multiplication of gas costs is a challenge. There are still some price waves coming to end customers. This is another reason why it will be a hard winter.
High consumption, high costs: A gas meter is turning in a private household.
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Image: dpa
Even worse for the economy would be a prolonged downtime in the factories, resulting in a recession. With a share of around one third, industry is the largest gas consumer and, in the event of a major disruption in the gas supply, would first have to do without protected private households, of which every second home is heated with gas. From now on, it is important to save gas in many places. It is logical that the minimum temperatures in rented apartments and offices are reduced. A drop of one degree saves an estimated 6 percent of energy. However, it is difficult to verify that each heater is turned up too high.
The government should defy the calls for an expensive gas price cap. General price interventions such as the tank discount benefit even those who can afford the expense. Aid should be limited to poorer households. Because the rising gas prices have an important advantage for the energy supply: the rise in prices brings with it the incentive to use this scarce commodity sparingly wherever possible. Sometimes it is worth investing in alternatives that were previously shy away from for cost reasons.
In any case, the blame for the gas shortage does not lie with the current government, but is the result of Putin’s policies. The previous governments were at least naïve towards him and in their energy policy. In the optimistic scenario, Germany will develop into a country with less dependency on individual countries, diverse energy suppliers and more power from renewable energies as a result of this crisis. In order to secure the gas supply until then, the government has above all a high gas price as a strong incentive to save.
