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ENERGY

ANALYSIS: Just how quickly could Germany wean itself off Russian gas?

A new report from the German Institute for Economic Research claims it could be possible for Germany to be free of its dependence several months earlier than the government claims. Here's how that could work.

ANALYSIS: Just how quickly could Germany wean itself off Russian gas?
A gas line on the construction site of a house. Photo: picture alliance/dpa | Sebastian Willnow

Prior to the war in Ukraine, Germany got 55 percent of its gas imports from Russia and was due to double import capacity with the Nord Stream 2 pipeline. 

As tensions mounted, however, Chancellor Olaf Scholz pulled the plug on the project and since the start of the war, Germany has been trying to find alternatives to Russian gas. At the latest estimates, around 47 percent of Germany’s gas comes from Russia. 

What measures have already been taken?

As the war in Ukraine has escalated, the German government has been seeking alternatives to Russian gas, such as building new liquified natural gas (LNG) docking stations, making deals with other gas suppliers – such as Qatar – and encouraging households to be frugal with heating their homes. 

READ ALSO: Germany to ‘fast-track’ gas terminals as part of Qatar deal

Despite these measures, German Economics Minister Robert Habeck recently said that he still assumes that Germany will need until mid-2024 to become independent from Russian gas. 

Is there no way to speed this up?

There may be. According to a new report by the German Institute for Economic Research (DIW), Germany could actually manage to do without Russian gas by the end of 2022. 

“If the energy savings potential is maximised and at the same time supplies from other natural gas supplier countries are expanded as far as technically possible, Germany’s supply of natural gas will be secured even without Russian imports in the current year and in the coming winter of 2022/23,” the study says.  

READ ALSO: Germany activates emergency gas plan to secure supply

How could this be done?

The study states that a faster departure from Russian gas dependency does not mean that Germany has to build its own LNG terminals. Instead, the existing ones in the Netherlands, Belgium and France could be used to transport more liquefied natural gas to Germany via the European pipeline network. This, it claims, could eliminate more than a quarter of Russian imports. 

The report also advocates ramping up natural gas imports from traditional supplier countries such as Norway or the Netherlands, and claims that more imports from Norway alone could save about one-fifth of the current Russian imports by more than 50 billion cubic meters per year.

More efficient use of the German and European pipeline system to connect Germany with southern Europe, where supplies arrive from North African countries such as Algeria and Libya, could also ease the situation in the future.

“Admittedly, the additional supply is not sufficient to replace all of the previous Russian natural gas imports,” the DIW admits but, if combined with a decline in natural gas consumption, then Germany’s energy supply would be secure.

Demand could be reduced by between 18 and 26 percent – for example, by completely replacing natural gas in power generation, which the study claims could eliminate up to half of Russian supplies.

In the case of private households, the use of natural gas can only really be saved by reducing demand. Therefore, the report says that energy-saving campaigns are needed as soon as possible, and “measures that increase energy efficiency and facilitate the switch to renewable heat (in combination with heat pumps) must be implemented as soon as possible.”

READ ALSO: Why Germany has urged households and businesses to cut back on gas

Member comments

  1. In which reality was their report based on? Turn of most power plants to be replaced with renewables and heat pumps.

    Its not really a problem with inflation sky rocketing come next winter only the super rich could eat and heat. Wont need so much gas if no one can afford it. Can the DIW work in reality instead of fantasy

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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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