The German energy industry views the situation in Ukraine with dismay and great concern. The victims of this war are primarily the Ukrainian population.
The Russian attack is already having an impact on our energy supply, which may increase further. There are now many concerns and questions about securing the gas supply in Germany. We want to answer the most common of these for you in this FAQ.
1. Is the energy supply in Germany at risk?
The expansion of renewable energies and the planned phase-out of coal and nuclear power have meant that generation is increasingly subject to fluctuations. A lack of electricity often has to be compensated for by using gas-fired power plants.
Other reasons for the strong demand for natural gas are industrial processes that require the energy source and household needs.
The supply of natural gas is currently secured. However, the geopolitical situation makes supply bottlenecks a realistic scenario.
2. How big is the dependency on gas supplies from Russia?
Russia supplies more than 50 percent of the natural gas consumed in Germany. If these deliveries were to fail permanently, this would be a major challenge, since gas is transported via pipelines and terminals and a conversion of this physical infrastructure can only be implemented to a limited extent in the short term.
3. What would happen if Russia stopped supplying gas to Germany?
The energy industry and the federal government are in constant contact to ensure the supply of customers. Depending on the timing of a partial or complete disruption in supplies from Russia, Germany would be able to maintain supplies for a period of several months. (Source: IWR)
The timing and duration of an interruption in gas supplies from Russia would be of crucial importance. A complete and permanent cessation of all deliveries would currently have serious economic consequences combined with high energy prices.
In the event of a threat to or disruption to the gas supply, network operators are entitled and obliged to take statutory measures to maintain system stability. Ultimately, this meant the disconnection of customers with the exception of the protected customers according to § 53a EnWG. This includes:
- Household customers as well as small and medium-sized companies in the commercial, retail and service sectors whose consumption is measured using standard load profiles (SLP).
- Basic social services
- District heating systems that supply the above customer groups with heat
4. How full is the German gas storage facility?
On March 15, 2022, the storage facilities in Germany were about 24.65% full (source: Aggregated Gas Storage Inventory). The level is thus below the lows at the end of the winter period in 2019-2021, but above the lows of the winter periods in 2013 and 2018.
It is important to fill the storage tanks sufficiently by the beginning of winter 2022. A draft for a new European energy strategy envisages a level of 80% by September 30, 2022 (source: Spiegel).
5. What alternatives are there?
At the economic level, the massive expansion of renewable energies, a more diverse supply structure and the ramp-up of hydrogen will be important for security of supply in the medium term. Germany must become independent of fossil fuels. In the field of renewable energies in particular, it is important to remove obstacles to the approval and implementation of projects.
In the meantime, natural gas could be substituted as an energy source. For example, coal and nuclear power plants could remain on the grid longer than planned, the production volumes of natural gas from outside Russia could be increased to the maximum, or a strategic minimum volume for natural gas storage facilities could be set by law.
6. What does this mean for price development?
Energy prices are influenced by many different factors and forecasts are generally subject to many uncertainties. The war in Ukraine and possibly reduced or non-existent gas supplies from Russia are of course influencing factors. However, one should not be impressed by short-term fluctuations, but avoid peaks in purchasing with an energy purchasing strategy based on distributed procurement times.
7. What can companies do?
All measures to create transparency in energy consumption and to reduce consumption should be implemented.
For example, options for substituting natural gas with heat pumps or using waste heat can be considered. The temperature of the heating should be checked and adjusted to the lowest possible level within the legal framework. If a renewal of systems for cooling or heat supply of properties is pending, it can be checked whether the consumption of natural gas can be substituted or reduced through efficiency measures.
However, replacing natural gas with biogas or the unscheduled closing of open positions can only be recommended to a limited extent. The reason for this is that the current price level is high and in the event of a crisis, the supply would be controlled by the network operator (including a possible shutdown) regardless of the individual degree of coverage of the respective customer from an overall economic perspective.
8. Given the attack on Ukraine, should Germany become less dependent on natural gas from Russia?
The attack on Ukraine and the dependence on raw materials, which makes sanctioning violations of international law more difficult, show that this question must be answered with a clear “yes”.
But the following also applies for reasons of climate protection: Germany must become independent of fossil fuels as a whole. In the medium term, the massive expansion of renewable energies, a more diverse supply structure and the ramp-up of hydrogen will be important for a diversified energy supply.
The new federal government must create the right framework conditions for the rapid expansion of renewable energies. Germany needs more space for wind turbines and photovoltaic systems as well as faster planning and approval processes.
Grid expansion and conversion must also be accelerated through an investment-friendly regulatory framework so that the renewable electricity can get safely from the place of generation to the consumer (source: bdew).
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