Source: Energy & Management Powernews, March 31, 2022
The Federal Ministry of Economics and Technology has proclaimed the pre-warning stage of the "Emergency Plan Gas". The security of supply, it says, but is still guaranteed.
Economy Minister Robert Habeck (Greens) said that he had informed the European Commission after coordination within the Federal Government that the Federal Government has proclaimed the first stage of the emergency plan gas, the so-called early warning stage. He added, however, that security of supply was still guaranteed. There are also currently no supply bottlenecks, he said. "Nevertheless, we must increase the precautionary measures to be prepared for the case of an escalation on the part of Russia," Habeck emphasized.
With the proclamation of the early warning stage, a crisis team has also convened, according to the ministry. It is to analyze and evaluate the supply situation, so that if necessary, further measures can be taken to increase the security of supply. "The German government is doing everything it can to continue to ensure security of supply in Germany," Habeck assured.
The Vice President of the EU Commission, Frans Timmermans, did not want to answer the question of whether the EU Commission recommends other member states a similar approach to Germany in Brussels. The Commission had prepared for an interruption of Russian gas supplies, however, "for a long time." He said it was prepared for anything and ready to work closely with member states in dealing with the consequences of a supply halt.
Backtracking on ruble payments
The key factor in the decision to activate the pre-warning stage was probably the fact that Russia insisted on accepting payment for gas imports only in rubles and threatened to halt deliveries otherwise. The general view is that this constitutes a breach of private supply contracts, which usually provide for payment in dollars or euros. In a joint statement on March 28, the G7 countries therefore rejected payment in rubles on the grounds of treaty compliance. Currently, however, the Kremlin has backed down: as a spokesman said on March 30, the arrangement is not yet to come into force on March 31 as planned. Putin wanted to consult this Thursday rather with Gazprom and the Central Bank about the further procedure.
To the crisis team gas, which "closely monitors and evaluates the current situation in the gas network," include, in addition to representatives of the Ministry of Economics, employees of the Federal Network Agency, the market area responsible gas, and the transmission system operators. Personnel from the federal states are also at the table. "Within the scope of their responsibility, the transmission system operators and distribution system operators take network- and market-related measures in accordance with sections 16 and 16a of the Energy Industry Act (EnWG), if necessary," the ministry says of the crisis team's tasks. In addition to the EU Commission, with which one is continuously in contact, one has also informed the neighboring countries about the proclamation of the early warning stage.
Call to reduce consumption
The overall supply of all German gas consumers is currently still guaranteed, according to the conviction of the federal government. There is sufficient gas available on the markets. This applies to household customers and social services such as hospitals as well as district heating, power generation and the German economy. However, an appeal was made to all gas consumers - from industry to private households - to reduce consumption as much as possible. Corresponding appeals also came from the Federal Network Agency. President Klaus Müller stressed that the goal is and remains to avoid a deterioration of the situation in Germany and Europe through savings and purchases.
The "Emergency Plan Gas" is based on the so-called European SoS Regulation of 2017 and regulates the gas supply in Germany in a crisis situation. It recognizes three escalation levels - the early warning level, the alert level and the emergency level. According to the SoS Ordinance, the early warning stage is to be declared if there are concrete, serious and reliable indications that an event may occur which is likely to lead to a significant deterioration in the gas supply situation and is likely to trigger the alarm or emergency stage.
German citizens are rather pessimistic
Nearly half of German citizens, incidentally, expect Russia to stop gas supplies to Germany, among other countries: In a survey by the Yougov Institute, 49% of more than 1,700 respondents said that in their estimation Russia will stop its gas deliveries if the community of states refuses to settle in rubles. 35% do not believe this. 17% made no statement.
The economic experts expect permanently higher energy prices in Germany as a result of the war in Ukraine. By making Germany less dependent on gas and oil imports from Russia, costs will rise in the long term, said Veronika Grimm of the German government's Council of Economic Experts. "As a result, energy prices will remain structurally higher than they were before this crisis."
Author: Günter Drewnitzky