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ENERGY

Germany activates emergency gas plan to secure supply

Germany on Wednesday raised the alarm level under its emergency gas plan as fears rose that Russia could cut off supplies if Western countries refuse to make payments in rubles.

Minister for Economic Affairs and Climate Action Robert Habeck speaks in Berlin on Wednesday.
Minister for Economic Affairs and Climate Action Robert Habeck speaking in Berlin. Photo: picture alliance/dpa | Bernd von Jutrczenka

After G7 countries rejected the Russian demand, Economy Minister Robert Habeck said at a press conference he had called for the first “early warning” alert level under the plan, establishing a crisis team in the ministry to monitor the situation.

Habeck said it was a precautionary measure and that the security of supply of gas in Germany continues to be guaranteed. According to the emergency warning plan, there are three crisis levels. 

“There are currently no supply bottlenecks,” Habeck said in a statement. “Nevertheless, we must increase precautionary measures in order to be prepared in the event of an escalation on the part of Russia.”

Gas reserves were currently at 25 percent of capacity, the minister said during a press conference, adding that a stop to deliveries from Russia would have “serious” consequences, though supplies continued to flow.

With the declaration of the early warning level, a crisis team has convened, he said.

“The crisis team is analysing and assessing the supply situation so that – if necessary – further measures can be taken to increase security of supply. The federal government is doing everything it can to continue to ensure security of supply in Germany.”

Putin announced last week that Russia would only accept payments in rubles for natural gas deliveries to “unfriendly countries”, which includes all of the European Union.

But on Monday, Germany and other G7 countries agreed this demand was “not acceptable” and a breach of existing agreements. 

READ ALSO: Germany rejects Russian demand for gas payments in rubles

The Kremlin reiterated on Tuesday that it will only be accepting payment in rubles for gas deliveries to the EU.

“We are not going to accept a breach of the private contracts” for gas deliveries, Habeck said in a press conference on Wednesday.

Germany is highly dependent on Russian gas for its energy needs, with 55 percent of its supplies being delivered along pipelines from the country before the invasion of Ukraine.

Since the outbreak of the war, Germany has accelerated plans to wean itself off Russian gas and diversify its supplies.

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ENERGY

Should tenants in Germany be shielded from energy price hikes?

Gas prices have more than tripled in the past year, prompting tenants' rights advocates to call for more social support and a cap on energy costs.

Should tenants in Germany be shielded from energy price hikes?

The German’s Tenants’ Association is calling on the government to put together a new energy relief package to help renters deal with spiralling energy costs.

Gas has become an increasing scarce resource in Germany, with the Economics Ministry raising the alert level recently after Russia docked supplies by 60 percent.

The continued supply issues have caused prices to skyrocket. According to the German import prices published on Thursday, natural gas was three times as expensive in May 2022 as it was in May a year ago.

In light of the exploding prices, the German Tenants’ Association is putting the government under pressure to offer greater relief for renters.

READ ALSO: 

Proposals on the table include a moratorium on terminating tenancy agreements and a permanent heating cost subsidy for all low-income households.

The Tenants’ Association has argued that nobody should face eviction for being unable to cope with soaring bills and is urging the government to adjust housing benefits in line with the higher prices. 

Gas price cap

Renters’ advocates have also joined a chorus of people advocating for a cap on consumer gas prices to prevent costs from rising indefinitely.

Recently, Frank Bsirske, a member of the parliamentary Green Party and former head of the trade union Verdi, spoke out in favour of capping prices. Bavaria’s economics minister and Lower Saxony’s energy minister have also advocated for a gas price cap in the past. 

According to the tenants’ association, the vast majority of tenants use gas for heating and are directly affected by recent price increases.

At the G7 summit in Bavaria this week, leaders of the developed nations discussed plans for a coordinated cut in oil prices to prevent Russia from reaping the rewards of the energy crisis. 

In an initiative spearheaded by the US, the group of rich nations agreed to task ministers will developing a proposal that would see consumer countries refusing to pay more than a set price for oil imports from Russia.

READ ALSO: Germany and G7 to ‘develop a price cap’ on Russian oil

A gas price cap would likely be carried out on a more national level, with the government regulating how much of their costs energy companies can pass onto consumers. 

Strict contract laws preventing sudden price hikes mean that tenants in Germany are unlikely to feel the full force of the rising gas prices this year

However, the Tenant’s Association pointed out that, if there is a significant reduction in gas imports, the Federal Network Agency could activate an emergency clause known as the price adjustment clause.

This would allow gas suppliers to pass on higher prices to their customers at short notice. 

The Tenants’ Association has warned that the consequences of an immediate market price adjustment, if it happens, should be legally regulated and socially cushioned.

In the case of the price adjustment clause being activated, the government would have to regulate the costs that companies were allowed to pass onto consumers to prevent social upheaval. 

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