In Germany, gas could become scarce in winter. In an emergency, it is up to the Federal Network Agency to decide who gets how much. Companies flood the authority with letters of request. But according to which criteria is the decision made?
It’s a worst-case scenario: Russia turns off the gas supply. It’s going to be a cold winter, people have to heat a lot. And in Germany gas is becoming scarce. The warehouses are expected to run empty, calls for voluntary savings are no longer enough. So it has to be rationed. The Federal Government’s “Gas Emergency Plan” is taking effect: Economics Minister Robert Habeck, who switched from “early warning” to “alert level” on June 24, is going to “emergency level” because the market mechanisms are no longer sufficient to guarantee the supply.
Then the state intervenes. But how exactly? The authority that is currently organizing this is the Federal Network Agency. Or in official German: “In the event of a gas shortage in Germany or EU member states, it would be the task of the Federal Network Agency to regulate gas consumption.”
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The worst-case scenario has become more likely since last week, because the Russian gas company Gazprom is only allowing 20 percent of the possible volume to flow through the Nord Stream 1 pipeline. So far, the Federal Network Agency has expected 40 percent. This amount would probably have been enough to avert a shortage. Now it’s getting really tight. The Bruegel think tank has calculated that, according to the current status, the storage facilities in Germany will run empty in February if Germany does not save 22 percent of its gas consumption.
Some authorities hide behind high walls when things really get down to business. Not so the Federal Network Agency. She is apparently aware of her extremely high responsibility in these difficult times. And this is twofold: On the one hand, complex decisions must be made as quickly as possible in order to be optimally prepared for an emergency. On the other hand, the best possible information strategy is part of it, in order to give people the feeling that sensitive issues are being dealt with.
Despite the high workload on the agency, our inquiry was answered quickly and comprehensively: “The Federal Network Agency is not working on a shutdown sequence. The aim is to be able to react effectively to the lack of gas and to cause as little social, ecological and economic damage as possible,” said a spokeswoman. For this purpose, all available information including the requested company data would be analyzed.
The Federal Network Agency has a clear catalog of criteria according to which every gas consumer is to be evaluated. This includes, among other things, the consequences of limiting gas consumption. Or how big the plant is and what lead time has to be taken into account for a gas purchase reduction. The analysis takes into account both economic and ecological damage. Regional backgrounds also play a role: Since many sources flow in from the east, west and north, Bavaria and, to a lesser extent, Baden-Württemberg would be particularly affected in an emergency.
The following examples show how complex the task is to evaluate the companies and all their products in terms of their importance for social life: One glass manufacturer mainly supplies breweries, while another pharmaceutical company supplies medical products professionally. One chemical company needs gas to produce precursors for bags of crisps. The other makes artificial fertilizers, without which the food crisis will only get worse. Before the crisis, not everyone would have known that dairies urgently need gas. Today, the dairy industry is warning, with understandable reasons, that they urgently need the raw material to produce butter, yoghurt, cheese and the like.
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The term “protected customers” is important. These are the institutions whose supply should be guaranteed by the gas supply company as a priority even in the event of a partial gas supply interruption or in the event of an exceptionally high gas demand. This group includes all households and social services defined according to an EU Norm: Politicians keep emphasizing that nobody has to freeze at home as long as the gas bill is paid.
The exciting question, especially for the economy, is: How does the Federal Network Agency find out which institution should be prioritized to what extent among “non-protected customers”. To put it another way: which company reduces the gas supply earlier and which later? This is anything but easy. For weeks, the authority has been flooded with letters from thousands of companies explaining why their products are important to society and why production must be maintained.
The Federal Network Agency is aware of the seriousness of the responsibility, because it may involve tens of thousands of jobs. When less gas flows and production has to stop, things can quickly become uncomfortable for companies and their employees. A concrete example is Deutsche Bahn: It generates part of its electricity from two gas-fired power plants. Without their electricity, trains might have to run more slowly or connections might have to be cancelled.
The authority has long since carried out a query among large consumers. On this basis, the so-called “Gas Safety Platform” will be created, which is scheduled to go into operation at the beginning of October. This is a data portal in which all major gas consumers – from ten megawatt hours to be precise – have to register. Their aim is to “provide the Federal Network Agency with up-to-date data online in a database in the event of a gas shortage”. Company data is not publicly available.
The “Gas Safety Platform” is intended to provide important information in the event of an emergency. In the event of a crisis, this data basis supports the Federal Network Agency in deciding on the necessary supply reductions by providing an overview of the consumption situation, potential savings and recommendations from the network operators as to the regions in which load reductions would achieve the targets. In addition, the platform serves as a communication tool between the players, so that gas consumers and the other parties involved are informed quickly.
All large gas consumers with a connection capacity of at least 10 megawatt hours, gas network operators and all those responsible for balancing groups, such as gas suppliers or gas traders, must register on the “Gas Security Platform”. The threshold of 10 MWh/h only covers a limited number of consumers, but they account for a large part of German gas consumption and should enable efficient management in the event of a crisis.
Klaus Müller, head of the Federal Network Agency, recently said in an interview with Der Spiegel: “In the event of a gas shortage, I won’t be able to make any good decisions. I hope there will only be a few bad ones.” His authority seems to be well prepared for this. And each of us can help to make his job easier: by saving every unnecessary kilowatt hour of gas.
The article “This is how it is decided who can still get gas in an emergency” comes from WirtschaftsKurier.
