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ENERGY

Germany to ‘fall short of gas stock targets’ in winter

The head of Germany's energy regulator said on Thursday that the country would almost certainly fail to meet its gas reserve targets in the face of a Russian supply squeeze.

Economics Minister Robert Habeck in Berlin
Economics Minister Robert Habeck (Greens) provides an update on Germany's gas situation in Berlin on August 16th, 2022. Photo: picture alliance/dpa | Britta Pedersen

“I am not counting on our achieving our next reserve goals as quickly as the first,” Klaus Mueller, president of the Federal Network Agency, told news website t-online.

He said the next benchmark — 85 percent capacity by October 1st “is not impossible but certainly very ambitious”.

“We fall short of an average level of 95 percent by November 1st in all our projections,” he added. “There’s hardly a chance of achieving that because some storage sites started at a very low level.”

Warning of looming shortages, Economy Minister Robert Habeck outlined a series of targets last month for gas stocks to reach 95 percent by November 1st ahead of the cold German winter.

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

At the time gas reserves stood at about 65 percent of capacity and Germany last weekend reached 75 percent two weeks ahead of schedule.

However Mueller warned citizens of Europe’s top economy that there would be no alternative to saving energy.

“It’s not just about one winter but rather at least two. And the second winter could be even harder,” he said. “We’ve got to save a lot of gas for at least another year. To put it clearly: it’s going to be at least two stressful winters.”

He said shortages in the cold months of 2022-23 were “probable” in some regions.

“The shortfalls will probably be temporary at first and then could stop or return repeatedly,” Mueller cautioned, meaning that gas might have to be transported to stricken regions of the country.

Germany is heavily dependent on Russian gas and has seen deliveries drop sharply amid tensions over the Ukraine war.

Gas flows dropped to 20 percent of the key Nord Stream pipeline’s capacity in July, as the EU accuses Moscow of using energy as a “weapon” in the conflict.

Household energy bills are set to soar this winter while energy shortfalls are expected to choke economic growth.

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

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ENERGY

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 

Vocabulary 

Network fees/charges – (die) Netzentgelte

Electricity price – (der) Strompreis

Consumers – (die) Verbraucher

To increase/rise – steigen

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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