Gas flames of a stove are pictured in a private home in Bad Honnef near Bonn, Germany, March 30, 2022. REUTERS/Wolfgang Rattay/File Photo
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- KfW provides EUR 15 billion loan to fill gas storage well
- Introduction of an auction system to reduce industrial gas consumption
- Coal-fired power plants could add 10 GW of capacity
- Discussions about the second stage of the crisis are ongoing – sources
FRANKFURT, June 19 (Reuters) – Germany on Sunday announced its latest steps to increase gas storage levels to prepare for the next winter season amid fears Russia, which has been cutting supplies in recent days, will cut supplies or even stop altogether.
After the Russian invasion of Ukraine, Germany, which relies on Moscow for most of its gas, is trying to fill up its gas storage facilities and phase out Russian energy imports.
Germany’s economy ministry said the new measures would include greater reliance on coal-fired power plants, as well as an auction system that would begin in the coming weeks to incentivize industry to use less. Continue reading
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It also includes 15 billion euros ($15.8 billion) in credit lines for the German gas market operator through state lender KfW (KFW.UL) to fill gas storage facilities faster, a government source who asked, unnamed, said to become.
Economics Minister Robert Habeck said that depending on the situation, the ministry responsible for the security of energy supply in Europe’s leading economy would take further measures.
Two people familiar with the matter said on condition of anonymity that this could involve the launch of the second phase under Germany’s gas emergency plan.
The second phase, which kicks in when there is a high risk of long-term gas shortages, would allow suppliers to pass high gas prices on to customers, thereby helping to reduce demand. Continue reading
Germany’s chemical industry association VCI, which represents the industry hardest hit by the gas supply cuts, said the reduced supplies have not yet caused acute problems.
PAINFUL BUT NECESSARY
The measures announced on Sunday follow a package unveiled earlier this year to provide Germany’s energy companies and economy with support payments to deal with the Ukraine crisis, which has led to rising electricity costs.
“The tense situation and high prices are a direct result of (Russian President Vladimir) Putin’s war of aggression against Ukraine,” Habeck said in a statement.
“Furthermore, it is obviously Putin’s strategy to unsettle us, to drive up prices and to divide us. We will not allow that. We will hit back decisively, precisely and deliberately.”
The economy ministry said reintroducing coal-fired power plants into the mix could add up to 10 gigawatts of capacity in the event of a critical gas supply situation, adding legislation to that effect will be tabled in the upper house of parliament on July 8.
“It’s painful, but reducing gas consumption is an absolute necessity in this situation,” said Habeck, a Green Party member who has campaigned for a faster phase-out of high-carbon coal.
“But if we don’t do that, we run the risk that the storage tanks will not be full enough at the end of the year for the winter season. And then we can be politically blackmailed.”
Germany is aiming for storage levels of 80% by October and 90% by November.
Data from Gas Infrastructure Europe shows that German gas storage levels stood at 57.03% on June 17, up from 29.69% on February 24, the day Russia invaded Ukraine.
($1 = 0.9526 euros)
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Reporting by Christoph Steitz and Andreas Rinke; Edited by Barbara Lewis
Our standards: The Thomson Reuters Trust Principles.