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ENERGY

EXPLAINED: What are Germany’s alternatives to Russian gas?

With the country facing an energy crisis this winter after Russia cut natural gas deliveries, we look at what alternatives Germany has and how clean they are.

This aerial view taken with a drone shows solar panels on the roof of a logistics company's freight processing hall in Aurach, southern Germany.
This aerial view taken with a drone shows solar panels on the roof of a logistics company's freight processing hall in Aurach, southern Germany. (Photo by Christof STACHE / AFP)

Even as a country with a strong environmental tradition, Germany is set to struggle this winter as it searches for green alternatives to Russian gas for both its heating and electricity needs.

Around half of German households use natural gas for heat and, with Russia having cut supplies by 80 percent, the average household is now looking at having to pay more than €500 a year extra for natural gas starting from October.

Experts are warning of a “winter of rage” characterised by protests and even riots. The gas levy, in which German gas suppliers are passing on a hike of 2.419 cents per kilowatt hour to consumers, has the federal government looking at ways to ease the burden – including possibly scrapping VAT on the levy.

Though gas use is down 14 percent so far this year, with Germans taking shorter, colder showers, and cities like Berlin and Cologne turning the lights off on some of their most famous landmarks at night, the real test will come this winter. 

So what alternatives does Germany have to Russian gas?

READ ALSO: EXPLAINED: How much will Germany’s gas levy cost you?

Renewables

Already, nearly half of all electricity produced in Germany comes from renewables, particularly solar power, after large investments in capacity from 2009 to 2012.

German economist Christian Odendahl argues that this figure would probably be higher today if those investments had continued.

“During sunny days like today, renewables would probably generate 100% of our power,” he tweeted.

At the same time, less than 20 percent of the energy Germans are actually consuming currently comes from renewables. Meanwhile, gas makes up 27 percent of the energy Germans actually use. Despite the increased renewable capacity – there’s still a long way to go before it will be able to replace gas.

READ ALSO: How Germany is saving energy ahead of uncertain winter?

Nuclear Energy

Germany’s current energy crisis has moved German politicians and public opinion towards something previously unthinkable: more support for nuclear energy. 41 percent of Germans are now in favour of long-term nuclear energy use.

Over three-quarters want to continue using it for at least a little while longer, while only 15 percent want to shut down the country’s three remaining nuclear power plants by the end of the year.

Opposition to nuclear energy is one of the reasons the German Green party – currently a member of the traffic light coalition government – was originally founded and gained popularity. The move to shut down nuclear power in Germany by the end of 2022 has found wide public and political support for decades, with opinion polling shifting only recently.

The government is currently debating whether to extend the life of existing nuclear power plants beyond the end of this year.

Alternative natural gas and coal

On a trip to Norway this week, Chancellor Olaf Scholz thanked the Scandinavian country for increasing its gas deliveries to Germany by about 10 percent – amidst warnings that Norway was already sending Germany about as much as it could deliver.

At the same time, work has begun on five temporary terminals for importing liquefied natural gas (LNG) on ships from gas-producing countries like the United States and Qatar. Some of the temporary terminals, which are located in Wilhelmshaven, Brunsbüttel, Stade, and Lubmin on the northern German coast, could be finished as early as the end of this year.

There are also plans to start construction on two permanent terminals at Wilhelmshaven and Brunsbüttel before the end of this year.

Environmental groups, however, are already protesting against the construction of the terminals.

At the same time, German coal plants resumed operations in early August, amidst concerns both moves could put Germany’s climate goals in jeopardy.

READ ALSO: Could Germany’s gas supplies last the winter?

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ENERGY

Germany to spend €200 billion to cap soaring energy costs

Germany is to ditch plans for a gas levy on consumers and introduce a gas price cap to curb soaring bills, Chancellor Olaf Scholz announced on Thursday.

Germany to spend €200 billion to cap soaring energy costs

The government will plough €200 billion into shielding households and businesses from skyrocketing energy costs in the wake of the Russian invasion of Ukraine.

“The German government will do everything so that prices sink,” Scholz said at a press conference via video link because he is currently isolating due to a Covid infection. He said the package includes a gas price cap and a plan to cream off windfall profits made by some energy companies.

The package is designed to ensure that Germany can contend with the fallout from rising prices “this year and next year and the one after that”, Scholz said.

As expected, the controversial gas levy plans are being shelved. The government had been planning to pass on some of the soaring costs of energy to consumers from October to prop up struggling suppliers.

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

With electricity and gas prices spiralling upwards, the leaders of Germany’s 16 federal states on Wednesday called on the government to introduce an energy price cap.

Several other politicians – also within the government’s own traffic light coalition – had also urged for the levy to be scrapped and a price cap to be introduced.

Scholz said there should be no extra burden for consumers and companies. “With the €200 billion, we have the means to finance all of this,” he said, adding that the gas levy was no longer needed. 

Protection from rising prices was needed for “pensioners, workers, families… but also bakers and craftsmen or big industrial plants that are dependent on electricity and the gas supply”, Scholz said.

Scholz pointed out that gas storage facilities in Germany are currently more than 90 percent full. “We will do everything we can to use the storage facilities for the winter,” he said. 

‘Energy war’

Germany, which has been highly dependent on imports of fossil fuels from Russia to meet its energy needs, has been battling to find other sources as supplies dwindle.

Thursday’s announcement came as inflation in Germany soared to a 70-year high of 10 percent in September, according to official data, driven higher by spiking energy prices.

“We find ourselves in an energy war over prosperity and freedom,” Finance Minister Christian Lindner said at the press conference.

A person turns down the radiator in Germany. Gas bills are set to rise significantly.

A person turns down the radiator in Germany. Photo: picture alliance/dpa | Marcus Brandt

Protecting consumers against the rising bills was a “crystal clear answer” to Russian President Vladimir Putin that Germany was “strong economically”.

The gas price cap should cover “at least a part” of the gas used by households and businesses, while “maintaining an incentive to reduce gas use” over the winter as supplies are limited, the government said in a statement.

At the same time, the government would work to limit the price of electricity for consumers by skimming off profits made by energy firms that have profited by the higher asking prices for gas but which do not use the energy source to generate power.

The gas levy would have seen 2.4 cents per kilowatt hour added to gas bills, adding an extra burden of several hundred euros per household. The government announced it would also reduce VAT on gas consumption to seven percent, down from the usual 19 percent. 

There had been major controversy over the surcharge after it emerged that some companies registered to receive a share included firms that have not been struggling in the current situation. 

Economics and Climate Minister Robert Habeck admitted mistakes in the design of the levy and he had pledged to change it. 

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