Germany warned residents and businesses Thursday that the country is in a natural gas crisis that could worsen in the coming months.
“The situation is serious and winter will come,” Germany’s economic minister, Robert Habeck, said at a press conference in Berlin. He said the government had triggered the second phase of its three-stage energy and gas program. The next step will allow the government to start gas distribution.
“We’re in a gas crisis, even if we don’t feel it yet,” he said. “Gas is a rare commodity in the future. Prices are already high and we need to prepare for further increases. This will affect industrial production and will be a heavy burden for many consumers.”
This announcement will be made a week after Gazprom, Russia’s national energy giant. Reduced the amount of natural gas It seemed to be the latest move to punish Europe for sanctions and military aid against Ukraine, providing Germany with 60 percent.
Gazprom has accused the reduction of turbines in compressor stations that were sent to Canada for repairs and were not returned due to sanctions. However, Mr Habeck called the reduction of Gazprom a deliberate economic attack by Russian President Vladimir Putin.
“Obviously, Putin’s strategy is to create anxiety, push prices up, and divide us as a society,” he said.
Recent developments are that the gas crisis is gaining dangerous momentum that can have unpredictable consequences for the wider economy, and that the government is not moving fast enough to stop it. Raised concern.
Biraj Borkhataria, an analyst at investment bank RBC Capital Markets, said: “”Policy makers seem to have noticed that they cannot act fast enough given the speed of the event. “
Russia’s actions in Germany could have a “contagion and knock-on effect” across Europe because of the gas market ties, Borkhataria said. So, for example, limiting flows to Germany can affect UK prices.
Russia is also causing financial damage to corporate customers. One concern is that utilities with contracts to buy gas from Gazprom will find that they are running out of fuel and will have to buy additional supplies at a much higher price to meet their obligations. Yes, it leads to loss.
Klaus Dieter Mobach, CEO of Uniper, said: In the statement, the German utility. Uniper states that it has received only 30% to 60% of the requested volume.
Due to the shortage, gas prices have risen abnormally, about six times higher than they were a year ago. Habeck warned that such high prices have forced energy providers to lose money, which could threaten the entire energy market.
“If this negative is too big to hold up, there is a danger that the entire market will collapse at some point,” Habeck said, similar to how the collapse of Lehman Brothers caused the global financial crisis. doing.
Mr. Mobach has so far welcomed the government’s emergency plan as a “feasible means” to deal with the gas situation, but “if supply conditions remain the same or worsen,” broader measures are available. Warned that it was necessary.
Since late March, when Germany entered the first phase of the plan, the government has focused on increasing gas storage, which has a capacity of more than 58%. However, activating the second phase of the emergency plan means that the government considers the risk of long-term supply shortages high.
On Wednesday, the German government approved a € 15 billion, or $ 15.7 billion, loan facility for utilities to buy natural gas to fill their storage facilities. In addition, the government plans to launch a program to help gas systems deal with it by encouraging businesses to temporarily stop using gas. Unused fuel will be available to other industrial users at the lowest prices.
However, the government has decided not to allow gas suppliers to pass on soaring energy costs to their customers after companies oppose the measure.
German companies were looking for alternative energy sources and ways to save gas, and Mr Habeck said they were able to reduce their use by about 8 percent in the last few weeks.The government has also passed a law permitting the resumption of utilities. Coal-fired power plant It was closed or was scheduled to be phased out. The Netherlands and Austria have taken similar steps.
Nord Stream 1, the main pipeline that supplies Russian gas to Germany, is scheduled for regular maintenance for about two weeks from July 11th, and the flow will stop, so Gazprom will take advantage of this situation. Delivery may be suspended for a longer period of time.