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ENERGY

How Germany is saving energy ahead of uncertain winter

The Nord Stream pipeline, which supplies Germany with most of its Russian gas, will be shut down for routine maintenance from Monday - with fears rising that it may remain off for good. Businesses have contingency plans, while the government is urging residents to do more.

Germany's Energy Minister Robert Habeck says he's taking quicker and cooler showers to tackle the energy crisis.
Germany's Economy and Climate Minister Robert Habeck says he's taking quicker and cooler showers to tackle the energy crisis. Photo: picture alliance/dpa | Oliver Berg

Germany is already feeling the effects of the energy squeeze caused by the war in Ukraine, with many households and businesses turning down the thermostat or dimming the lights.

Economy Minister Robert Habeck has even made headlines for extolling the virtues of shorter, colder showers.

Now, nervousness abounds as the scheduled 10-day pause in deliveries via the vital Nord Stream pipeline threatens to make things even worse.

“No scenario can be ruled out,” Habeck has warned.

READ ALSO: ‘Scarce commodity’: Germany raises gas alert level as Russia reduces supplies

Confronted with the risk that supplies may never return to previous levels, many businesses and local authorities have come up with contingency plans.

“It is possible that we will return to working from home, as we did during the pandemic – but this time to save energy in the national interest,” Carsten Knobel, head of consumer chemicals group Henkel, told local media.

A man attends an online meeting.

A man attends an online meeting. Could Germany move to more working from home again to tackle the crisis? Photo: picture alliance/dpa | Annette Riedl

The VCI, a trade group representing the heavily gas-dependent German chemicals industry, has said it is preparing for “the worst-case scenario”.

Chemicals giant BASF, meanwhile, has raised the possibility of putting its employees on furlough, a system already used during the coronavirus pandemic from 2020.

Perfume producer Symrise is falling back on an oil-powered furnace at its factory in Holzminden.

‘One or two months’

Russia has already cut supplies via the Nord Stream pipeline by 60 percent in recent weeks, citing technical issues – which Berlin dismisses as cover for a “political” decision.

As a result, Germany’s gas storage facilities are being filled at a slower pace than usual, leaving the country at risk of running into a  “gas shortage”, according to Habeck.

“If we stop receiving gas from Russia… the quantities currently stored will only be sufficient for one or two months,” said Klaus Müller, president of the Federal Network Agency.

Consumers “will be shocked when they receive a letter from their energy supplier” with a bill some three times higher than usual, Müller said.

READ ALSO: German households could see ‘four-digit’ rise in energy costs this winter

On Thursday, Germany’s lower house of parliament or Bundestag passed a plan to turn off the hot water in its offices and keep the air temperature no higher than 20C in the winter.

Several local authorities have also put energy-saving plans in motion.

The Bavarian city of Augsburg has turned off its fountains, dimmed the facades of public buildings at night and is debating switching off some under-used traffic lights.

Traffic lights switched off in Augsburg in 2017. The city is debating turning some traffic lights off to save energy.

Traffic lights switched off in Augsburg in 2017. The city is debating turning some traffic lights off to save energy. Photo: picture alliance/dpa | Stefan Puchner

Chilly nights

A housing cooperative in the eastern city of Dresden made national headlines when it announced it would limit hot water to certain times of day.

And Vonovia, Germany’s largest property group, said on Thursday it plans to limit the temperature in its 350,000 homes to 17 degrees Celsius at night.

READ ALSO: Germany’s largest landlord to restrict heating at night

Since the outbreak of the war in Ukraine, Germany has managed to reduce the share of its natural gas supplied by Russia from 55 percent to around 35 percent.

The country relies on gas for more than 50 percent of its heating needs.

In a bid to further reduce its reliance on Russian gas, Germany has put aside billions of euros (dollars( to buy liquefied natural gas from other producers such as Qatar or the United States.

But in the event of a total supply cut-off from Russia, the country “will have to make very difficult societal choices,” according to Habeck.

The end of Russian gas deliveries would most likely plunge the country into a painful recession, with the economy shrinking by 6.5 percent between 2022 and 2023, according to a recent forecast by the country’s top economic think tanks.

Already, the surge in energy prices created the first monthly trade deficit in the country in three decades in June, perhaps the first tremor of a bigger upheaval to come.

By Florian CAZERES

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MONEY

How the cost of living crisis is affecting people in Germany

Energy and some supermarket items in Germany are rising in price much faster than the overall inflation rate - and that has more than half of German households worried about their budgets, a new survey shows.

How the cost of living crisis is affecting people in Germany

What’s happening?

With the cost of everyday items spiralling upwards, many people in Germany are feeling the strain. And a new survey has laid bare the impact on people.

Around 57 percent of people in Germany say rising prices are a “big problem” for them personally, according to a recent poll.

That’s a marked increase from July, when public broadcaster ZDF asked the same question and found that only 40 percent of respondents were concerned about rising costs at that time.

In some cases, energy prices have more than doubled.

The price of natural gas – which around half of German households use for heat – has quintupled in some cases.

READ ALSO: German households see record hikes in heating costs

What else is going up in price?

It’s not just the price of energy that’s rising steeply. Anyone who has gone to buy groceries in the past months will have noticed a major increase.

One analysis from Focus news magazine found that the price of several common supermarket items had rocketed upwards once more, with many grocery stores and discount retailers having increased their prices on October 1st to adjust to higher costs on their end.

At a 65 percent increase, sugar saw one of the biggest price hikes. The price for a kilogram of powdered sugar specifically, doubled.

Butter biscuit prices – a common snack in Germany – are up 20 percent, while coffee cream and honey both increased by 30 percent.

The price of ketchup climbed by 50 percent.

Goose leg and goose breast – typical German delicacy for holidays like Christmas – doubled in price to over €20 in some Munich shops, due to higher feed and transport costs recently.

57 percent of Germans reported that price increases were becoming a “big problem” for them in September 2022. Poll by ZDF.

What does this mean for people?

Those increases are far above the German inflation rate. Currently sitting at around 7.9 percent, the country’s inflation rate has broken post-war records several times already this year.

But one study finds many Germans feel – and act – as if the rate is much higher.

According to an Internationale Hochscule study done exclusively for the Welt newspaper, the Inflationsgefühl – or what respondents feel the inflation rate is actually like – sits at 34 percent.

Just over half those surveyed in that study reported they were “very concerned” about rising prices. Meanwhile, 37 percent said they are “somewhat concerned”.

Over 80 percent expect the problem to get worse.

Study authors say people in Germany may be overestimating the rate of inflation because the biggest increases are in areas they’ll tend to notice every day.

“We always perceive inflation where we have consumer spending,” International Hochschule Business Administration Professor Johannes Trey told Welt. “People are interested in what they have to pay every day to meet their basic needs.”

Most respondents say they’re planning on cutting spending in certain areas, with cuts in purchases for furniture, appliances, and travel the most popular cost saving measure. Around 80 percent say they’re making an effort to curb their electricity use.

READ ALSO: EXPLAINED: When should I turn on my heating in Germany this year?

Respondents are less likely to cut down on luxuries such as alcohol and tobacco—or media consumption like buying newspapers or streaming subscriptions.

Support for Ukraine still high despite price pressure

Although the financial stress people in Germany are experiencing has gone up, the general level of support for Ukraine among everyday Germans is still high – despite the war being one of the main causes of the record high inflation levels.

ZDF’s poll asked “should we keep supporting Ukraine even though it means higher prices for us?”

And 74 percent said “Yes” in September.

Although the upcoming winter is expected to come with even more financial strain, that number has trended slightly upward over the last three months.

Despite more than half of German households saying they’re under financial stress, most say support for Ukraine should continue. Poll by ZDF.

Meanwhile, the federal government is currently preparing a new €200 billion package of support, on top of the €100 billion already passed by the Bundestag over the last few months.

The package is expected to provide inflation relief by introducing everything from a temporary cap on the price of gas to a successor to summer’s €9 nationwide public transport ticket.

READ ALSO: Germany to thrash out details of €200 billion energy support package

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