EU agrees plan to cut Russian gas and protect Germany

The European Union agreed a plan to reduce gas consumption on Tuesday, an act of solidarity with Germany and a response to Russia's manipulation of supplies as an economic weapon.

Woman cooks on gas stove
A woman cooks on a gas stove. Photo: picture alliance/dpa | Annette Riedl

The plan, approved by energy ministers in Brussels, will see exceptions and carve-outs as some EU countries blanched at making too deep a sacrifice for Berlin and a few landlocked member states.

But Hungary was the only member state to oppose the plan, which passed on a majority vote, and the ministers’ Council of the European Union hailed the deal as a victory for EU unity.

“In an effort to increase EU security of energy supply, member states today reached a political agreement on a voluntary reduction of natural gas demand by 15 percent this winter,” the council said.

“The Council regulation also foresees the possibility to trigger a ‘Union alert’ on security of supply, in which case the gas demand reduction would become mandatory,” the statement continued.

“The purpose of the gas demand reduction is to make savings ahead of winter in order to prepare for possible disruptions of gas supplies from Russia that is continuously using energy supplies as a weapon.”

‘Dirty games’

Germany, the EU’s economic powerhouse, is hugely dependent on Russian gas and remains at the mercy of the supply from Gazprom for the years still needed to find alternative sources.

“It is true that, Germany with its dependence on Russian gas, has made a strategic mistake but our government is working… to correct this,” Germany’s economy minister Robert Habeck said as he arrived.

France said showing solidarity with Berlin would help in turn protect all of Europe, even though Germany takes a major share of the 40 percent of EU gas imports that came from Russia last year.

“Our industrial chains are completely interdependent: if the chemical industry in Germany coughs, the whole of European industry could come to a halt,” said French minister for energy transition, Agnes Pannier-Runacher.

The plan asks member states to voluntarily reduce gas use by 15 percent – based on a five-year average for the months in question – starting next month and over the subsequent winter through March.

Czech industry minister Jozef Sikela, whose country holds the rotating EU presidency, said the plan would deliver a strong answer to state-run Gazprom’s plan to cut gas deliveries to Europe.

Russian President Vladimir Putin “will continue to play his dirty games in misusing and blackmailing gas supplies,” Sikela said.

Gazprom has said it is cutting daily gas deliveries to about 20 percent of capacity from Wednesday.

READ ALSO: Serious situation: Russia to further cut gas deliveries to Germany

‘Wise strategy’

The EU member countries had already rejected an earlier European Commission proposal to give Brussels — rather than the member states — the power to impose gas use cuts in an emergency.

And the 15-percent target will also be adapted to the situation of each country through a series of exemptions, taking into account their level of stocks and whether or not they have pipelines to share gas.

“Nobody challenges the need for solidarity, but the means of solidarity can be very different and the initial proposal was not necessarily the most effective approach,” Spain’s minister for ecological transition, Teresa Ribera Rodriguez, said.

Exceptions are planned for island states such as Ireland, Cyprus or Malta and countries, such as Spain or Portugal, with limited links to the
interconnected gas supply grid.

READ ALSO: ‘Difficult winters ahead’: Germany sets out emergency energy saving measures

Gazprom said Monday that it was halting the operation of one of the last two operating turbines due to the “technical condition of the engine”, but Simson dismissed this claim.

“We know that there is no technical reason to do so,” she said.

“This is a politically motivated step and we have to be ready for that and exactly for that reason the pre-emptive reduction of our gas demand is a wise strategy.”


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German government pledges to subsidise rising electricity bills

For most electricity customers in Germany, grid fees are set to rise next year. But the government plans to inject €13 billion to ease the burden on consumers.

German government pledges to subsidise rising electricity bills

The four major transmission system operators (TSOs) said the price of grid fees would be set at an average of 3.12 cents per kilowatt hour next year, slightly higher than the current average of 3.08 cents/kWh. For the first time, the cost will be at the same level across Germany.

Grid fees form part of the electricity bills paid by consumers, along with other taxes and production costs. The charges make up about 10 percent of private customer bills. 

Those who live in the area of the network operator Tennet, which supplies Lower Saxony, Schleswig-Holstein and parts of Hesse and Bavaria, can, however, expect a slight decrease in the network fee.

In the rest of the country, grid fees currently stand somewhere between 2.94 and 3.04 cents per kWh. The four TSOs – 50Hertz, Amprion, Transnet BW and Tennet – said the price increases were due to the higher costs needed for procuring energy, following Russia’s invasion of Ukraine. 

READ ALSO: Why electric fan heaters could make energy crisis worse

The cost for transmission networks has more than tripled from €5 billion to €18 billion.

To ensure that grid fees for customers do not also more than triple, the German government has pledged to give a subsidy of €13 billion.

“We are now making sure that these cost increases are absorbed, thereby preventing an additional burden for industrial companies, small and medium-sized businesses and consumers,” said German Economic and Climate Minister Robert Habeck. “We will use almost €13 billion to keep costs down.”

He said this would be carried out in connection with the planned electricity price cap.

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

The coalition government, made up of the Social Democrats, Greens and Free Democrats, is planning to dampen grid fees in the medium term by skimming off high windfall profits from electricity producers to fund a price cap. 

The money for the subsidy will also be covered by Germany’s Renewable Energy Act (EEG) funding. Electricity customers in Germany had to pay an EEG levy, aimed at boosting renewable energy, up until it was dropped earlier this year due to spiralling prices. 

The German Association of Energy and Water Industries (BDEW) called on the coalition to take action quickly and introduce subsidies.

“It is right that a state subsidy is planned for this exceptional situation,” said Kerstin Andreae of BDEW.

The significantly higher costs would otherwise lead to increased network fees that customers would have to pay, Andreae said. 

READ ALSO: German households see record hikes in heating costs 


Network fees/charges – (die) Netzentgelte

Electricity price – (der) Strompreis

Consumers – (die) Verbraucher

To increase/rise – steigen

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