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ENERGY

Putin ‘threatens Germany with further gas reductions’

Russia's President Vladimir Putin has reportedly threatened to halve gas deliveries to Germany at the end of July.

Russian President Vladimir Putin
Vladimir Putin at a meeting with Iranian president Raisi in Tehran on July 19th, 2022. Photo: picture alliance/dpa/Iranian Presidency | -

According to Russian news agency Tass – a state propaganda outfit – if western countries do not return a turbine repaired in Canada for the Nord Stream 1 Baltic Sea pipeline to Russia, the flow of gas to Germany will be cut for a second time.

In comments reportedly made by Putin in a meeting with Iranian President Ebrahim Raisi and Turkish leader Recep Tayyip Erdogan in Tehran on Wednesday, the capacity of Nord Stream 1 could fall even further to 33 million cubic metres per day at the end of July because “another unit” requires repairs. 

The warning from Putin is believed to be an attempt to force Germany to reignite the Nord Stream 2 project after the pipeline was immediately halted following Russia’s invasion of Ukraine. 

READ ALSO: Germany’s energy regulator urges people not to panic about threat of gas shortage

“We still have a ready route (for delivering gas) – that is Nord Stream 2,” Putin said. “We can put that into operation.”

The Nord Stream 1 pipeline – which is currently the main gas pipeline from Russia to Germany – was commissioned in 2011 and has a capacity of around 55 billion cubic metres of gas per year.

Since June, however, Russia’s state-owned energy giant Gazprom has reduced gas deliveries to Germany by around 60 percent to 67 million cubic metres per day.

Currently, the more than 1200-kilometre-long pipeline is also completely shut down for annual maintenance work, which is scheduled until Thursday. Some fear that the gas deliveries could be stopped entirely. 

Chancellor Olaf Scholz (SPD) has criticised Russia for using the Siemens Energy turbine as a “pretext” for reducing its gas deliveries into Europe. 

After Russia’s invasion of Ukraine, Moscow gradually cut off the gas to several European countries that have shown support for the war-torn nation. Germany believes Putin is using energy as a weapon to fight back against the ongoing sanctions. 

The turbine in question, which was recently repaired in Canada, was held back for a long time as part of the sanctions. Most recently, however, Berlin lobbied its ally to return the turbine to Germany so that it could be reinstalled in the pipeline.

According to the German government, the delivery of the device is exempt from the EU sanctions against Russia because they are not directed against gas transit.

However, Moscow has said that so far neither the machine nor the accompanying documents have arrived.

Moreover, Putin’s statements in Tehran suggest that even after the end of the maintenance work and even if the turbine were installed, the pipeline still might not be brought back up to full capacity.

This could prompt the government to emergency energy measures in place in Germany this winter.

READ ALSO: 

Member comments

  1. Well if you’re not prepared for blackouts and shutdowns. I’d start getting ready for it now. It would be optimistic to think you have any time much past November. Enjoy this heatwave the winters going to be a cold one.

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ENERGY

German government ‘set to ditch controversial gas levy’

The gas levy - which would have cost the average family in Germany another €500 a year - likely won’t come into force after all, according to German media reports.

German government 'set to ditch controversial gas levy'

According to reports in the Frankfurter Allgemeine Zeitung (FAZ), Germany’s controversial Gasumlage – or gas levy – will get axed either Tuesday or Wednesday, with a Gaspreisdeckel, or a cap on the price of gas, set to replace it.

Energy and Economics Minister Robert Habeck of the Greens insisted once again just last week that the levy would go ahead.

It would see an additional 2.4 cents per kilowatt hour passed on to consumers, in order to stabilise Germany’s energy providers, which are also struggling with higher costs after Russia cut off cheap supplies.

German and Danish investigators are now investigating whether the Nord Stream II pipeline, which Berlin axed in February in the days leading up to Russia’s invasion of Ukraine, was deliberately sabotaged Monday, as it leaks gas into the sea.

With electricity prices having doubled and gas prices nearly quintupling, several politicians – also with the government’s own traffic light coalition – have called for the levy to be scrapped.

Lars Klingbeil, co-leader for Chancellor Olaf Scholz’s Social Democrats, told public broadcaster ZDF that the gas levy was on “politically shaky ground”.

“It must be clear that we have the strength to discuss this openly and correct ourselves if necessary,” he said.

“The gas levy makes gas prices more expensive, which raises the question of whether it makes sense economically,” said Finance Minister Christian Lindner, who leads the liberal Free Democrats (FDP).

FAZ reports that negotiations between the three governing parties and relevant energy companies were nearing an end Tuesday, with the Cabinet expected to make a final decision Wednesday morning.

A gas price cap is likely to replace plans for a gas levy, which would see a limit on what consumers would pay their energy companies for gas, leaving the federal government to pick up the bill for the difference when market prices go above the designated cap.

READ ALSO: EXPLAINED: Will Germany set a gas price cap and how would it work?

With the gas price cap already having the support of many Social Democrats and Greens, Lindner’s FDP is set to agree to it provided a few conditions are met.

“As the FDP, we can foresee a gas price brake coming into force,” Christian Dürr, who leads the FDP in the Bundestag, told Deutschlandfunk. “Now, frankly, I expect the Greens to move on the issue of extending the life of nuclear power plants and restarting coal-fired power plants.”

It’s not yet clear though how the government would pay for the cap. The FDP has been resistant to suspending Germany’s constitutionally enshrined debt brake, which limits what they can borrow.

The SPD and the Greens want to suspend it to pay for a gas price cap, which could cost the government between €30 and €50 billion according to one estimate.

The debt brake can be suspended in emergency situations, such as in March 2020, when the German government put it on ice to pay for the first Covid-19 rescue package.

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