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ENERGY

‘Scarce commodity’: Germany raises gas alert level as Russia reduces supply

Germany said Thursday it would raise the alert level under its emergency gas plan to secure supply following the recent reduction of pipeline supplies from Russia.

German Economy and Climate Minister Robert Habeck speaks at an industry event on June 21st.
German Economy and Climate Minister Robert Habeck speaks at an industry event on June 21st. Photo: picture alliance/dpa | Bernd von Jutrczenka

“Gas is now a scarce commodity in Germany,” Economy Minister Robert Habeck told reporters.

Triggering phase two brings Germany a step closer to the third and final stage that could see gas rationing in Europe’s top economy.

Germany first activated the first stage of the emergency gas plan at the end of March. At the time Habeck said it was a precautionary measure to prepare for any supply restrictions in future. 

READ ALSO: Germany activates emergency gas plan to secure supply

Russia was using gas “as a weapon” against Germany in retaliation for the West’s support for Ukraine following Moscow’s invasion, Habeck said on Thursday. 

Germany, like a number of other European countries, is highly reliant on Russian energy imports to meet its needs.

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Russian energy giant Gazprom last week significantly reduced supplies via the Nord Stream pipeline to Germany by 60 percent due to what the company said was a delayed repair.

The second “alarm” level under the government’s emergency plan reflected a “significant deterioration of the gas supply situation”, Habeck said.

At the “alarm” level, Germany is still considered to be in a position to “manage” the situation for the time being.

Habeck said that households “can make a difference” by saving energy, as Germany launches a campaign to encourage gas saving measures.

Germany has dismissed the technical justification provided by Gazprom, instead calling the move a “political decision”.

Kremlin spokesman Dmitry Peskov said Thursday there was “no double meaning” in the supply decision.

“Our German partners are well aware of the technological servicing cycles of a pipeline,” he said.

“It’s strange to call it politics.”

In recent weeks, Gazprom has stopped deliveries to a number of European countries, including Poland, Bulgaria, Finland and the Netherlands.

German gas stores just under 60 percent full

Germany’s Ministry of Economics and Climate Protection (BMWK) said the second stage means that the security of supply is still guaranteed, but the situation is tense.

“The reason for declaring the alert stage is the cut in gas supplies from Russia, which has been in place since June 14th 2022, and the continuing high price level on the gas market,” said the Ministry in a statement.

The Ministry said that gas storage facilities were currently at 58 percent. But there are concerns over the reduction of gas deliveries from Russia via the Nord Stream 1 pipeline.

“This means that there is currently a disruption in gas supply, which is leading to a considerable deterioration in the gas supply situation; it is therefore necessary to declare an alert stage,” said the Ministry.

Germany has mandated that gas storage facilities be filled to 90 percent ahead of the European winter this year to mitigate the risks from a supply cut.

The country has managed to reduce the share of its natural gas supplied by Russia from 55 percent before the invasion to around 35 percent.

It has also sought new sources of supply, and accelerated plans to import gas into the country by sea in the form of LNG.

What is the emergency plan?

Germany’s gas emergency plan, which is based on a 2017 EU regulation, has three escalation levels – the early warning stage, the alert level and the emergency level.

According to the law, the early warning stage should be declared if there are “concrete, serious and reliable indications that an event may occur which is likely to lead to a significant deterioration of the gas supply situation and is likely to trigger the alarm or emergency stage”.

At the third “emergency” stage, the government intervenes in the market to divvy up limited supplies. 

READ ALSO: Why Germany has urged households and businesses to cut back on gas

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ENERGY

Should tenants in Germany be shielded from energy price hikes?

Gas prices have more than tripled in the past year, prompting tenants' rights advocates to call for more social support and a cap on energy costs.

Should tenants in Germany be shielded from energy price hikes?

The German’s Tenants’ Association is calling on the government to put together a new energy relief package to help renters deal with spiralling energy costs.

Gas has become an increasing scarce resource in Germany, with the Economics Ministry raising the alert level recently after Russia docked supplies by 60 percent.

The continued supply issues have caused prices to skyrocket. According to the German import prices published on Thursday, natural gas was three times as expensive in May 2022 as it was in May a year ago.

In light of the exploding prices, the German Tenants’ Association is putting the government under pressure to offer greater relief for renters.

READ ALSO: 

Proposals on the table include a moratorium on terminating tenancy agreements and a permanent heating cost subsidy for all low-income households.

The Tenants’ Association has argued that nobody should face eviction for being unable to cope with soaring bills and is urging the government to adjust housing benefits in line with the higher prices. 

Gas price cap

Renters’ advocates have also joined a chorus of people advocating for a cap on consumer gas prices to prevent costs from rising indefinitely.

Recently, Frank Bsirske, a member of the parliamentary Green Party and former head of the trade union Verdi, spoke out in favour of capping prices. Bavaria’s economics minister and Lower Saxony’s energy minister have also advocated for a gas price cap in the past. 

According to the tenants’ association, the vast majority of tenants use gas for heating and are directly affected by recent price increases.

At the G7 summit in Bavaria this week, leaders of the developed nations discussed plans for a coordinated cut in oil prices to prevent Russia from reaping the rewards of the energy crisis. 

In an initiative spearheaded by the US, the group of rich nations agreed to task ministers will developing a proposal that would see consumer countries refusing to pay more than a set price for oil imports from Russia.

READ ALSO: Germany and G7 to ‘develop a price cap’ on Russian oil

A gas price cap would likely be carried out on a more national level, with the government regulating how much of their costs energy companies can pass onto consumers. 

Strict contract laws preventing sudden price hikes mean that tenants in Germany are unlikely to feel the full force of the rising gas prices this year

However, the Tenant’s Association pointed out that, if there is a significant reduction in gas imports, the Federal Network Agency could activate an emergency clause known as the price adjustment clause.

This would allow gas suppliers to pass on higher prices to their customers at short notice. 

The Tenants’ Association has warned that the consequences of an immediate market price adjustment, if it happens, should be legally regulated and socially cushioned.

In the case of the price adjustment clause being activated, the government would have to regulate the costs that companies were allowed to pass onto consumers to prevent social upheaval. 

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