New challenges for energy supply due to the war in Ukraine

German ministers focus on renewable energy

Source: Energy & Management Powernews, March 10, 2022

At a special meeting, the energy ministers of the federal and state governments discussed the challenges to energy supply posed by the war in Ukraine.

Saxony's Energy Minister Wolfram Günther (Greens) emphasized after the special meeting of the energy ministers of the federal and state governments: "The supply of electricity and heat is secure." Even if the "gas tap were to be turned off" in Russia, Germany would safely get through the current heating period. However, he said, self-generated, renewable energy is the most crisis-proof method for independence from both fossil sources and Russia.

Russia continued to emphasize that it would be a reliable energy supplier even in times of crisis. However, due to sanctions imposed by the West and discussions in the EU to break away from Russian gas and oil, Moscow had threatened for the first time on March 7 to stop deliveries through the Nord Stream 1 Baltic Sea pipeline to Germany. 

In addition to ensuring security of supply in the coming winter, the energy ministers see it as a task to alleviate the consequences of higher energy prices for the population and the economy. They said the federal government has reaffirmed the role that strategic reserves of natural gas, oil and hard coal play. Lignite and nuclear power are not substitutes for natural gas, he said. "The war in Ukraine shows: We urgently need to get out of our dependence on fossil fuels," Günther said. Expanding renewables is a matter of climate protection and national security, 

State energy price cap called for

After the meeting, Lower Saxony's Energy Minister Olaf Lies (SPD) called it "a joint effort of the federal government and the states to free themselves from this grip." The key to an independent, clean and, in the long term, cost-effective energy supply lies in the expansion of renewable energies. To this end, proposals should now be drawn up to speed up procedures and drive forward the expansion, the minister said. 

Bavaria's Economics Minister Hubert Aiwanger (Free Voters) called for a state energy price cap to ease the burden on citizens and businesses. "For example, the fuel price must be kept stable below two euros by reducing the mineral oil tax," he said. After state support had helped businesses in the Corona crisis for two years, one should not allow "businesses to go under now because of the rise in energy prices," Aiwanger appealed. 

No embargo on Russian natural gas

The U.S. had issued an import ban on oil from Russia on March 8 in response to the Russian war of aggression against Ukraine. Also Great Britain wants to lower its oil imports from Russia until the end of the year first and then import no more oil from there. German Economics Minister Robert Habeck (Greens) does not rule out the possibility of Russia stopping its gas supplies to Europe. Germany cannot compare itself with the U.S., Habeck said. The U.S. has fracked gas and is also an oil-exporting country itself, he said. Germany and Europe could not impose an embargo on Russian energy imports without significant economic dislocation. 

Saxony's Prime Minister Michael Kretschmer (CDU) also rejected a boycott of gas from Russia. Kretschmer called for a new way of dealing with Russia. "A Russia, which has no trade contacts at all, which has no dependence on Europe, which will not be related to us, is certainly not more reliable," he said. Extremely high energy prices have a "devastating effect on the German and European economies," he warned. If Germany pulled out of the comparatively cheap supply contracts with Russia, new contracts would have to be concluded on much worse terms.

Author: Susanne Harmsen