The increasingly fluctuating gas supply volumes from Russia and the collapse of the most important natural gas trading company have alarmed the federal government’s crisis team. It decides on the gas emergency plan. If it officially detects “a disruption in the gas supply”, the alert level comes into effect – with massive effects on companies and the people who work there.
Gas deliveries to Germany, the core of the energy supply for industry, are becoming more critical every day – and the next stage of the “gas emergency plan” is therefore more likely to come into force. Since 2019, the emergency plan has regulated what happens if the gas supply in Germany collapses.
The so-called early warning level is currently in effect. A crisis team working at the responsible Federal Network Agency is constantly monitoring the situation. In the past few days, the experts had to realize that the situation was getting worse by the hour. This brings us closer to the second step provided for in the emergency plan: the alert level.
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It comes into effect when “a disruption in the gas supply or an exceptionally high demand” shakes up the market. And the first thing is happening right now: especially through the most important pipeline Nord Stream 1, through which Russia pumps gas directly to Germany, only flows almost 60 percent of the amount of gas that is theoretically possible.
At the same time, the key natural gas trading and storage company in Germany, Gazprom Germania in Berlin, which employs 1,500 people, has collapsed due to Russian sanctions and has to be cushioned with a loan of possibly up to ten billion euros from the German state bank KfW.
Gazprom Germania is a key company for the gas supply in Germany, is the reason given by the federal government for the loan, which goes beyond any framework that KfW otherwise secures.
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Against this background, the Federal Network Agency now writes in its daily assessment of the situation: It is monitoring the situation closely and is “in constant contact with companies in the gas industry”. And she expressly urges everyone to save gas wherever possible. According to the assessment, “the security of supply is still guaranteed”.
Nevertheless, the situation is coming to a head because the state-owned Russian energy company Gazprom in St. Petersburg is apparently arbitrarily turning off the gas tap. Gazprom justifies the collapsing delivery volumes with a missing compressor, which cannot currently be installed by Siemens, the company commissioned to do so.
In fact, Siemens shipped this compressor to Canada for service, from where it is currently not being returned due to sanctions against Russia. However, the Federal Network Agency considers the Russian reference to the missing component to be an excuse: “We cannot confirm a causal connection between the gas compressor missing on the Russian side and the large reduction in deliveries at the moment,” she writes. This makes it clear that the Federal Network Agency, which reports to the Ministry of Economic Affairs, no longer believes in the reliability of Russian supplies and that the “disruption to the gas supply”, which is the prerequisite for the declaration of the alert level, is getting closer.
In such an alarm phase, the network operators can still regulate the stabilization of the supply via supply and demand. The market is not completely dead yet. However, they can stop the flow of gas without immediately breaking the contract. The companies affected by the supply fluctuations then pay a lower amount to the operators of the gas networks. However, you no longer have production security, which can lead to massive disruptions in the companies.
In addition, when the alarm is on, it is possible to fall back on the German gas storage facilities at any time, which actually have to be filled at the moment so that there is enough gas for everyone in winter. According to the Federal Network Agency, the gas storage capacity is currently almost 56 percent of the possible volume.
If even these measures are not enough to regulate the gas supply, the third stage of the emergency plan would come into effect: the real “emergency phase”. It is characterized by the fact that no more gas would be available on the market for free sale. Then the disconnection of individual consumers is no longer a decision that is somehow negotiated, but the state – and in this case the Federal Network Agency – allocates the gas.
This could happen if Russian deliveries stopped. Because it is still the case that more than half of the gas consumed in Germany is imported from Russia. An end to imports would reduce the available quantity accordingly. Even if negotiations with other possible suppliers have been going on for months and possible alternatives are being examined, the loss of Russian gas imports could only be partially, but not completely, compensated for in the short term.
Private households and social facilities such as hospitals or gas-fired power plants, which are required for generating electricity, should at least continue to be supplied during the emergency phase – as long as gas is still available. “In such a situation, household customers are subject to special legal protection and are given priority,” says the Federal Network Agency.
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