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ENERGY

Gazprom and EON plan gas-fired power station in Germany

Russian gas company Gazprom and German energy giant EON have teamed up to build a power station in Germany.

A statement on Friday from state-controlled Russian gas giant Gazprom and Germany’s energy giant EON says the two companies plan to build a gas-fired power station in northeast Germany.

The power station will be built at Lubmin, near the landfall of the future Nord Stream pipeline, which runs from Russia to Germany through the Baltic Sea. Gas from this line will be used to power this plant, they said.

The power plant will have a capacity of 1200 megawatts and is scheduled to be up and running in 2011. Gazprom and EON will set up a 50:50 joint venture to implement the project.

The two companies already cooperate in other energy projects and have been in talks for several months about Gazprom buying into some of EON’s assets in Europe.

The 1,200-kilometre (740-mile) Baltic pipeline project is controversial because it will bypass countries that Russian gas currently transits through, like Poland and Ukraine, and because of environmental and security concerns. The consortium building the pipeline is owned jointly by Gazprom, EON, Germany’s BASF and Nederlandse Gasunie of the Netherlands.

Russia’s enormous oil and gas reserves are of increasing concern for the European Union because Moscow is seen to be using its strong position for political purposes.

There has also been criticism regarding Gazprom’s investments into European energy companies when Russia doesn’t allow EU firms to become more involved in extracting Russian oil and gas.

ENERGY

German government announces fresh relief package for high energy costs

With Russia's invasion in Ukraine exacerbating high energy and petrol prices, Germany is set to introduce a second relief package to limit the impact on consumers.

German government announces fresh relief package for high energy costs

The additional package of measures was announced by Economy and Climate Protection Minister Robert Habeck (Greens) on Sunday.

Speaking to DPA, Habeck said the wave of price increases throughout the energy sector were becoming increasingly difficult for households to bear.

“Extremely high heating costs, extremely high electricity prices, and extremely high fuel prices are putting a strain on households, and the lower the income, the more so,” he said. “The German government will therefore launch another relief package.”

The costs of heating and electricity have hit record highs in the past few months due to post-pandemic supply issues. 

This dramatic rise in prices has already prompted the government to introduce a range of measures to ease the burden on households, including abolishing the Renewable Energy Act (EEG) levy earlier than planned, offering grants to low-income households and increasing the commuter allowance. 

READ ALSO: EXPLAINED: What Germany’s relief package against rising prices means for you

But since Russia invaded neighbouring Ukraine on February 24th, the attack has been driving up energy prices further, Habeck explained.

He added that fears of supply shortages and speculation on the market were currently making the situation worse. 

How will the package work?

When defining the new relief measures, the Economics Ministry will use three criteria, Habeck revealed. 

Firstly, the measures must span all areas of the energy market, including heating costs, electricity and mobility. 

Heating is the area where households are under the most pressure. The ministry estimates that the gas bill for an average family in an unrenovated one-family house will rise by about €2,000 this year. 

Secondly, the package should include measures to help save energy, such as reducing car emissions or replacing gas heating systems.

Thirdly, market-based incentives should be used to ensure that people who use less energy also have lower costs. 

“The government will now put together the entire package quickly and constructively in a working process,” said Habeck.

Fuel subsidy

The three-point plan outlined by the Green Party politician are not the only relief proposals being considered by the government.

According to reports in German daily Bild, Finance Minister Christian Lindner (FPD) is allegedly considering introducing a state fuel subsidy for car drivers.

The amount of the subsidy – which hasn’t yet been defined – would be deducted from a driver’s bill when paying at the petrol station. 

The operator of the petrol station would then have to submit the receipts to the tax authorities later in order to claim the money back. 

Since the start of the war in Ukraine, fuel prices have risen dramatically in Germany: diesel has gone up by around 66 cents per litre, while a litre of E10 has gone up by around 45 cents.

READ ALSO: EXPLAINED: The everyday products getting more expensive in Germany

As well as support for consumers, the government is currently working on a credit assistance programme to assist German companies that have been hit hard by the EU sanctions against Russia.

As reported by Bild on Saturday, bridging aid is also being discussed for companies that can no longer manage the sharp rise in raw material prices.

In addition, an extension of the shorter working hours (Kurzarbeit) scheme beyond June 30th is allegedly being examined, as well as a further increase in the commuter allowance.

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