Berlin — Russia stopped delivering gas through the Nord Stream 1 pipeline (NS1) that supplies much of western Europe on Wednesday, claiming the two-day shutoff was necessary for maintenance work. But the move will pile pressure on the continent’s largest economy as it prepares for a winter of energy rationing that could squeeze households and German industry.
Deliveries through NS1, which transports natural gas from fields belonging to Russia’s state-owned company Gazprom to the German Baltic coast, have dropped significantly since Vladimir Putin launched his invasion of Ukraine in February, leading Germany to implement an emergency plan that will see it attempt to fill gas storage facilities across the country to 95% capacity by the end of October.
The idea is to head off any potential energy shortages driven by the Ukraine war, as the colder months approach.
Berlin has scrambled to secure alternative gas supplies from Norway and Qatar, among other producers, and is rapidly procuring floating gas storage terminals that will supplement existing onshore facilities. Large companies have already been told to save as much gas as possible over the summer, and to prepare for possible cuts in supplies over the winter if households and hospitals need to be prioritized.
Germany isn’t panicking
A recent study published by the Universities of Bonn and Cologne found that Germany could handle even a complete, immediate stop to Russian gas supplies and get through the winter. That view is shared by German economics minister Robert Habeck.
Despite significantly lower volumes from Russia, “we have made better progress in filling the storage facilities than the law requires,” Habeck said Monday.
Currently, German gas storage facilities are almost 84% full. In comparison, last year’s peak storage level was 72%, on November 1, compared with 99% on that date in 2019.
According to the German government, if the tanks were filled to 100% capacity, the storage volume alone could meet the country’s gas needs through two to three months of average winter weather. Even before it ceased deliveries this week Russia was routing only about 20% of the maximum possible volume through the NS1 pipeline. Moscow has justified the limited flow by claiming that a repaired turbine, manufactured by Germany’s Siemens Energy, could not be delivered due to sanctions imposed over the Ukraine war. Germany disputes that pretext and considers Russia’s limited shipments political retribution for the international community’s sanctions.
Purchases of Russian gas have already fallen significantly. Before Russia invaded Ukraine on February 24, Germany relied on Russia for 55% of its gas supplies. In August, however, that proportion fell to 9.5%, according to a spokeswoman for the Federal Ministry of Economics. Habeck has said that Russian gas will not be fully replaced until at least 2024.
Coping mechanisms
According to the researchers at the Universities of Bonn and Cologne, Germany can get through the winter by taking three key steps:
- The consumption of gas to produce electricity must be reduced.
- Consumption for heating buildings must be reduced.
- Industry must reduce its consumption or find alternatives for gas
In the winter, much of Germany’s imported gas is used to heat buildings. The study sees a savings potential of around 15% in this area. Achieving that would mean dialing back thermostats in homes, offices and other buildings by about 5 degrees, on average. So, people accustomed to relaxing at home in t-shirts with the heating set at 70 could, for instance, be asked to put on sweaters and cope with 65 degrees instead.
Retailers, companies and the public sector could also make a contribution, for example by working from home and operating shorter store opening hours.
Cities across Germany decided a few weeks ago to turn off the lights in public buildings and outdoor spaces at night, leaving some famous sites shrouded in atypical darkness.
Slowing the wheels of German industry
Industry would need to save the largest amount of gas, at around 26%, or replace it with other energy sources. But here, too, the study authors are optimistic, noting that the sharp decline in industrial gas consumption this summer has underscored businesses’ ability to eke out savings. In many areas, production can be maintained with other energy sources if gas is replaced, by heating oil, for example.
Christian Seyfert, who heads the German Association of Industrial Energy Consumers (VIK), warned that the country’s industry will suffer the most this winter. “Overall the prospects for the German market and the industry are very dire,” he told CBS News. “That is due to inflation and the skyrocketing gas prices.”
“We need to reactivate coal plants and consider turning our nuclear power plants back on,” said Seyfert. “We have to do whatever it takes to support our already-strained economy.” Germany decided a couple decades ago to phase out nuclear power. Only three of its six nuclear power plants remain in operation, and they are due to go off-line by the end of 2022. Seyfert believes that shutdown should be postponed.
The latest official statistics show Norway has already replaced Russia as Germany’s biggest gas supplier, with its share climbing to 38% of all imports in August. Imports from the Netherlands and Belgium have also increased in recent months.
European Union representatives have been holding talks with the U.S., Qatar, Norway, Algeria and Israel to secure further supplies.
Elsewhere in Europe
Historically, Russia has accounted for about 35% of Europe’s overall gas supply, but that’s changing rapidly.
France enjoys some insulation from the European gas crisis as it relies far more on domestic nuclear power. It also has three liquified natural gas (LNG) terminals and a direct pipeline from Norway. Italy has concluded new gas supply agreements with Algeria, Qatar and Azerbaijan, and Russian imports now account for 21% of the country’s energy needs, compared to 29% last year.
Spain and Portugal are in an even better position as they rely very little on Russian energy and even supply gas to other EU countries. Spain is playing an increasingly important role in the European LNG market, with six terminals of its own.
Denmark and Sweden are largely energy self-sufficient.
Britain also has a stable supply from its own gas fields and European neighbors, and relied on Russia for only about 4% of its supply last year.
Secure, but not comfortable
But just because countries in Europe and across the world can secure sufficient supply, does not mean they won’t pay through the nose for it. Energy markets are global, and the sharp reduction in supplies from Russia to its neighbors, and the overarching security concerns amid the West’s standoffs with Russia and China, have already had a dramatic impact, sending prices soaring.
“The current situation facing the U.K. is not a question of security of gas supply, but of high gas prices set by international markets,” the British government says in a “fact-sheet” about energy and the Ukraine war.
So, while gas security may not be an immediate concern for the governments of Europe this winter, even if Russia keeps the tap turned off, many people and businesses will struggle to afford the fuel that’s available.
This article was first published in CBS News . All contents and images are copyright to their respective owners and sources.
