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MONEY

Gas bills to double for millions of German households

German households are bracing for bigger-than-usual bills this winter as energy companies pass on the cost of gas, which has soared since the Russian invasion of Ukraine.

A person turns down the radiator in Germany. Gas bills are set to rise significantly.
A person turns down the radiator in Germany. Gas bills are set to rise significantly. Photo: picture alliance/dpa | Marcus Brandt

The invoice for a typical household could double from October 1st, German group RheinEnergie warned in a statement on Monday, the first major provider to give a detailed estimate.

The company supplies approximately 2.5 million people with energy in the region around the city of Cologne, in western Germany.

“An increase of almost 450 percent in the procurement cost for natural gas” over the past year was behind the punishing increase, RheinEnergie said.

The “market deteriorated significantly again with the start of the Russian war of aggression against Ukraine”, which further sent up the price, RheinEnergie said.

A two-person household, with an average gas consumption of 10,000 kilowatt-hours annually, would see their bill jump from around €960 a year ago to €2,002, the company said.

Germany has been highly reliant on supplies of Russian gas to meet its energy demands, but Moscow has slowly dwindled supplies since the start of the war.

The threat that Russia could cut deliveries completely has raised the possibility of shortages over the winter and brought Germany closer to
rationing supplies.

Officials in Berlin have mandated the filling of gas storage tankers before the winter and moved to allow under-pressure energy companies to pass on ballooning costs with a ‘surcharge’.

The step, which will come into force in the autumn, could add “a few hundred euros” to household bills, Economy Minister Robert Habeck has said.

That surcharge was however “not included” in the increase announced by RheinEnergie, the group said.

READ ALSO: How much extra will German households pay under new gas surcharge?

Member comments

  1. I think I totally miss read the article but Rhien Energie are doubling costs, and that doubling does not include the levy which will be added later? No one seems too bothered about it? I wish I had enough money to not be concerned about it.
    Oh, I looked at their website.
    Poor Rhein Energie they must be struggling, their profits have only gone from 2.01 Billion euroes to 2.12 billion euros. (Pre tax). Thats only an increase of 110 million Euros.
    (2020-2021).
    I can not wait until our tax money bails these guys out. But Joe bloggs down the street gets his gas and electric cut off because he choose food on Wednesday.

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ENERGY

Gas crunch pushes German glassmaker to the brink

In 400 years, Heinz-Glas, one of the world's biggest producers of glass perfume bottles, has seen off many crises - including World Wars and the oil shock of the 1970s in the last century alone. But Germany's current energy emergency strikes at the heart of its very existence.

Gas crunch pushes German glassmaker to the brink

“We are experiencing an exceptional situation,” Murat Agac, deputy chief executive of the family-owned company founded in 1622, told AFP.

“If there is a halt in gas supplies… then glass production will very likely disappear” from Germany, he said.

To make glass, sand is heated to temperatures of up to 1,600C and gas is the most frequently chosen source of energy.

Until recently, a glut of gas flowing to Germany via a pipeline from Russia had helped keep production costs low, allowing Heinz-Glas to book annual revenues of some €300 million.

With competitive prices, exports made up 80 percent of the glassmaker’s total output.

But this economic model is now being called into question after Russia’s invasion of Ukraine.

READ ALSO: Energy crisis to labour shortage – Five challenges facing Germany right now 

Moscow has cut gas supplies to Germany by 80 percent, in what is believed to be a bid to weaken the resolve of Europe’s biggest economy in backing Ukraine.

Berlin is scrambling for alternative energy sources to replace the resource that once made up 55 percent of its total gas imports.

The consequence: soaring energy prices.

For Heinz-Glas, that has meant a “ten- to 20-fold increase” in costs compared to 2019, said Agac.

READ ALSO: German government fears millions of heating systems could fail in winter

‘3,000 football fields of solar panels’ 

Not only Heinz-Glas, much of Germany’s industry is buckling under the gas supply crunch.

Many companies are drawing up emergency plans as the German government has warned that Russian gas could stop flowing entirely.

With winter looming, the crisis is reaching fever pitch.

Chemicals giant BASF is looking at replacing gas with fuel oil in its second-biggest German factory.

Henkel, which specialises in adhesives and sealants, is considering whether its employees can work from home.

But the consequences of a total halt in Russian gas flows could be irreparable for many companies.

At the Heinz-Glas factory in Kleintettau, opened in 1661, around 70 tonnes of small glass bottles are produced each day, moulded by the heat of the furnaces.

An employee inspects flacons on an assembly line at the German glass producer Heinz-Glas Group in Kleintettau, Germany on August 3rd, 2022.

An employee inspects flacons on an assembly line at the German glass producer Heinz-Glas Group in Kleintettau, Germany on August 3rd, 2022. Photo: Ronny Hartmann / AFP

The delicate vessels adorned with intricate motifs are then sent to the company’s clients — including its biggest, French group L’Oreal — which fill them with perfume.

At every step of the production process — from making the material with quartz sand to the final sculpting of the bottle — heat is essential.

At the company’s second-biggest factory in the mountain village of Piesau, a cut in gas would permanently damage its glass furnace, said Agac.

To ward off the danger in the short term, Heinz-Glas has invested in stocks of liquefied gas, which can be driven in by trucks.

But that triples the energy bill, and would still not be sufficient – the two German factories need the equivalent of “3,000 football fields of solar
panels” to operate.

In the long term, replacing the entire gas system with electric infrastructure would cost €50 million, Agac said, a sum which the company cannot afford.

READ ALSO: Reader question – Should I modernise my heating system in Germany?

Even in the factory of Kleintettau, where furnaces are powered by electricity, around 40 percent of the industrial processes still require gas.

“We need state support,” said Agac, warning that the firm may otherwise be forced to shift production elsewhere, such as India or China, where it already has a factory.

For the 1,500 employees of the company in Germany, the future looks cloudy.

“I’ve reached an age when it doesn’t matter so much for me anymore. But younger people must be fearing job losses,” said Michaela Trebes, 61, inspecting hundreds of little flasks emerging from the production lines.

But for now, the management remains optimistic that Heinz-Glas can pull through.

Since 1622, “there have been enough crises… in the 20th century alone, World War I, World War II, the oil crisis in the 70s, many, many critical situations. We survived them all,” said Agac.

“We will somehow also overcome this crisis.”

By Florian CAZERES

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