Impact of the Energy Crisis on the Transformation of the German Energy System to Climate Neutrality 2045

Source: Energy & Management Powernews, 21 . October 2022

According to researchers at PIK, the planned gas savings of 20% are not enough. For energy management, buildings and industry, they have concrete proposals.

The rough upper limit for natural gas consumption, if Germany is to be independent of Russian gas supplies, is about 600 billion kWh per year. The figure comes from the policy brief: "Germany on the way out of the gas crisis - How to unite climate protection and energy sovereignty" by the Potsdam Institute for Climate Impact Research (PIK), in which more than 30 experts from the Copernicus project "Ariadne", funded by the German Federal Ministry of Education and Research (BMBF), point out ways out of the gas crisis and towards climate protection and energy sovereignty.

Accordingly, Germany must significantly reduce its gas consumption: By about 30% compared to pre-crisis levels. Reducing consumption to this level, according to the researchers, increases Germany's geopolitical resilience and is thus the core building block for regaining energy sovereignty in the short term in the current gas crisis.

Included in the upper limit of 600 billion kWh/year are already the planned additional imports from non-Russian gas-producing countries and domestic natural gas production of about 50 billion kWh/year. This compares with average net imports to Germany of 820 billion kWh/year of natural gas in 2017 to 2021. While it is quite conceivable that Germany could also realize a higher supply by purchasing additional gas via neighboring countries, the researchers said. However, a further expansion of gas supply poses a number of risks. In particular, it would lead to further shortages in the European gas market, higher wholesale prices and greater geopolitical dependence on uncertain supplier countries. It could also spur further investment in natural gas production worldwide, which would be counterproductive in terms of medium- to long-term climate goals.

Potential Savings

Using six models and two basic scenarios, the researchers developed potential savings and recommendations for each sector.

For the energy industry , primarily the realization of the expansion targets for renewable energies and a stronger use of coal-fired power plants in the short term, some of which are reactivated from reserve or shut down later than planned, would enable a reduction in gas-fired power generation of up to 50% by 2023 and up to 80% by 2025. The potential savings would also depend on the development of electricity demand in Germany and exports to neighboring countries, as well as the possibility of actually reactivating the current reserve plants on a permanent basis. For example, the recently decided extension of the operating lives of two of the three remaining nuclear power plants until April 2023 would primarily lead to additional electricity exports and reduce climate gas emissions, but would only make an insignificant contribution to gas savings in Germany.

The greatest potential for reducing gas consumption in the building sector in the short term lies in adjusting people's heating behavior - for example, by lowering room temperatures, heating according to demand and intelligent control. Together with an accelerated ramp-up of heat pumps, connection to district and local heating networks, and greater energy refurbishment of the building stock, a good 30% of gas demand could be saved in the building sector by 2023, according to the researchers.

The industry could respond in part in the short to medium term by switching to other energy sources and raw materials (petroleum products [heating oil, LPG, naphtha], biomass). Accelerated electrification of steam supply would make it possible to reduce gas use. Production cutbacks and the import of energy-intensive precursors (e.g., ammonia) are also to be expected, especially if the trust in natural gas as an energy source, as a bridge to CO2-free production processes, is permanently damaged. Up to 2025 the gas employment could reduce in such a way around well 50%.

How far the appeals to the gas saving - the Federal Network Agency spent as a target 20% savings - already effect show, is not yet clearly foreseeable meanwhile. For example, the Federal Network Agency published data on October 20, according to which gas consumption fell by 27% last week compared to the same calendar weeks of 2018 to 2021 - to 1.75 billion kWh/day. This value refers to the complete gas consumption, that is, including industrial groups. If one considers only the consumption of households and smaller companies, the minus is even 31% to 608 million kWh/day.

The PIK policy brief: "Germany on the way out of the gas crisis - How climate protection and energy sovereignty can be combined" is available for download on the Internet.

Author: Katia Meyer-Tien