Germany begins slow move away from Russian gas after Ukraine invasion

The invasion of Ukraine has thrown Germany's problematic dependence on Russian gas into stark relief, forcing Europe's largest economy to urgently reshape its energy mix.

A view of construction work in Brunsbüttel, Schleswig-Holstein.
A view of construction work in Brunsbüttel, Schleswig-Holstein. The port on the North Sea is under discussion as a site for a new LNG (Liquefied Natural Gas) terminal. Photo: picture alliance/dpa | Frank Molter

In a previously unthinkable step for Chancellor Olaf Scholz’s young government, the crisis even has politicians considering delaying Germany’s planned exit from nuclear energy and coal to keep the lights on.

“We will change course to overcome our import dependence,” Scholz said Sunday at an extraordinary session of the Bundestag, or lower house of parliament, on the Ukraine crisis.

READ ALSO: How war in Ukraine has sparked a historic shift in Germany

The decision represents a massive and expensive reversal for the government which has banked on Russia to secure its energy needs over the past two decades.

With Russia increasingly isolated internationally as a result of economic sanctions over Ukraine, Berlin can no longer rely on Moscow to keep supplying over half of the country’s gas.

While energy supplies have largely been exempted from the West’s response, policymakers still needed to “prepare for a scenario” where Russia “stops gas deliveries”, Finance Minister Christian Lindner said on Tuesday.

READ ALSO: How Germany could end its dependence on Russian energy

Finance Minister Christian Lindner.

Finance Minister Christian Lindner. Photo: picture alliance/dpa | Kay Nietfeld

Liquified gas

Initially, Germany hopes to substitute Russian supplies with larger deliveries of liquefied natural gas (LNG), a super-chilled form of the fuel, which can be imported by sea from producers such as the United States or Qatar.

The German government made a splash in the LNG market on Wednesday by announcing it was earmarking 1.5 billion euros ($1.7 billion) for the fuel.

But Germany lacks the infrastructure to absorb huge new supplies, with no LNG terminals along its coast where tankers can dock.

Their absence means it will have to import supplies through one of the European Union’s 21 other terminals, a costly solution at a time when energy prices are soaring.

“Germany must build its own LNG terminals with the necessary connections and infrastructure,” the economy ministry concluded last week.

A number of projects, which had stalled because of a lack of political and financial backing, could also receive “public support”, the ministry said.

In the northern town of Stade, on the Elbe, the construction process for one project is about to get under way.

“The technical assessments are complete,” Hanseatic Energy Hub, the company behind the project, told AFP.

Meanwhile, in Wilmershaven, on the North Sea coast, the Belgian group TES is also planning to build a facility.

The terminals could, however, take some time to come online. “The approval process takes minimum three years, and two for construction,” Karen Pittel, energy expert at the Ifo institute think-tank, told AFP.

Climate objectives

The narrow room for manoeuvre has cast doubt over Germany’s ambitious timetable for its transition towards renewable energy.

Germany’s governing coalition of the Social Democrats, the Greens and the liberal FDP, in office since December, had promised an earlier exit from coal in 2030 and maintained Angela Merkel’s decision to exit nuclear by the end of 2022.

Paradoxically, natural gas was to play a crucial bridging role in the planned green shift, providing a ready energy supply when the wind is still or the sun does not shine – at least until the technology to store the energy produced by renewables catches up.

“There are no more taboos,” Economy and Climate Minister Robert Habeck declared recently. “In the short term, we may need to hold coal power plants in reserve out of caution,” he said.

READ ALSO: Germany halts controversial Nord Stream 2 pipeline

The Green party minister likewise did not rule out pushing back the closure of the country’s last three operational nuclear power plants.

The government would, however, face significant challenges were it to pursue the nuclear option. “You cannot just extend a nuclear plant you have decided to close like that,” energy expert Pittel said.

There were “extremely high hurdles, on a technical and administrative level” to keep the plants going, the plant operator RWE told German daily Handelsblatt.

By Florian CAZERES

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Scholz says Germany to become biggest NATO force in Europe

Germany's investments in defence in the wake of Russia's invasion of Ukraine will transform it into the biggest contributor to NATO in Europe, Chancellor Olaf Scholz said on Tuesday.

Scholz says Germany to become biggest NATO force in Europe

Alongside the United States, Germany is “certainly making the largest contribution” to NATO, Scholz said in an interview with the ARD broadcaster.

Speaking at the close of a summit of leaders from the Group of Seven rich democracies, Scholz said Germany was in the process of creating “the largest conventional army within the NATO framework in Europe”.

Days after Russia invaded Ukraine in February, Scholz announced a 100-billion-euro ($105-billion) fund to beef up Germany’s military defences and offset decades of chronic underfunding.

READ ALSO: Germany’s Bundestag approves €100 billion fund to beef up defences

He also promised to meet NATO’s target of spending two percent of GDP on defence, answering years of criticism from close allies that Berlin was failing to contribute enough to the alliance.

Russia’s invasion had led to a renewed conviction “that we should spend more money on defence”, Scholz said.

“We will spend an average of around 70 to 80 billion euros a year on defence over the next few years,” he said, meaning “Germany is the country that invests the most in this”.

Scholz’s announcement in February was seen as a major policy shift, upending Germany’s traditionally cautious approach to defence as a result of its post-war guilt.

Germany had steadily reduced the size of its army since the end of the Cold War from around 500,000 at the time of reunification in 1990 to just 200,000.

NATO allies are from Tuesday gathering in Madrid for a summit, where the United States is expected to announce new long-term military deployments across Europe.