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Germany upbeat on energy security

Germany is well-prepared to tackle a possible energy shortage due to Russia’s squeeze on European gas supplies, Chancellor Olaf Scholz declared on Tuesday, even as fears grow about the rising prices that will hit consumers across the continent this winter.

He spoke at the start of a two-day government retreat, attended also by Spanish Prime Minister Pedro S?nchez, which focused on the impact that Russia’s invasion of Ukraine has had on Europe’s energy supply.

Scholz cited Germany’s decisions to reactivate oil- and coal-fired power plants, mandate the filling of natural gas storage facilities, and lease floating liquefied natural gas terminals. A decision on extending the operating life of Germany’s three remaining nuclear power plants is also expected soon.

“All of this and many further measures have contributed to us being in a much better situation, as far as supply security is concerned, than could have been foreseen a couple of months ago,” Scholz told reporters at the government guest house in Meseberg, north of Berlin.

“We will be able to cope quite well with the threats that we face from Russia, which is using gas as part of its strategy in the war against Ukraine,” he said.

Scholz noted that gas storage facilities are already over 80 per cent full, more than they were at this time last year, and the government is expected to agree on more measures shortly to help German consumers cope with steeply rising energy prices.

Russia’s state-controlled energy company Gazprom further reduced gas deliveries to the French company Engie, raising fears that Moscow might cut off gas completely as political leverage over the war in Ukraine.

Gazprom informed Engie of a reduction in gas deliveries, starting on Tuesday, because of “a disagreement between the parties on the application of several contracts,” according to the French energy company. Deliveries for Engie from Gazprom have significantly decreased since Russia invaded Ukraine on February 24, with recent monthly supply of 1.5 TWh, or terrawatt hours, which compares to Engie’s total annual supplies in Europe above 400 TWh, the company said.

Engie had already secured enough gas to meet its commitments to its customers, the statement said, adding that it has also put in place measures to “significantly reduce any direct financial and physical impact” that could result from Gazprom’s interruption in gas supplies.

Russia has cut off or reduced natural gas to a dozen European Union countries. Since spring, EU leaders have been appealing to the public to use less gas over the summer to build storage for winter. The bloc has proposed that nations voluntary cut their use by 15 per cent. It’s also seeking the power to impose mandatory cuts across the 27-nation bloc if there is risk of severe gas shortage.

France, like other European countries, is trying to beef up its gas reserves for winter and fill up its storage by early autumn to avert an economic and political crisis over energy. The French government rolled out an “energy sobriety” plan in June, targeting a 10 per cent reduction in energy use by 2024.

French Prime Minister Elisabeth Borne on Monday urged businesses to make energy-saving plans, warning that companies would be hit first should the government be forced into rationing gas and electricity because of severe shortages.

In an effort to wean themselves off Russian gas and reduce the climate impact of the energy sector, European countries have significantly ramped up efforts to build wind, solar and other renewable energies.

Seven Baltic Sea countries – Finland, Sweden, Estonia, Latvia, Lithuania, Poland and Denmark – announced on Tuesday a sevenfold increase of wind power production by 2030 in northern Europe, as a way to free the region from its dependence on Russian natural gas.

The countries agree to set combined goals for offshore wind in the Baltic Sea region of at least 19.6 GW by 2030. The present capacity of the Baltic Sea region is currently under 3 gigawatts. Under the plan, up to 1,700 new offshore wind turbines would produce power equivalent to almost 20 nuclear power plants, providing enough electricity for up to 30 million households.

“(Russian President Vladimir) Putin is using energy as a weapon and has put Europe on the brink of an energy crisis with skyrocketing prices,” Danish Prime Minister Mette Frederiksen said.

Estonian Prime Minister Kaja Kallas said the new plan also will allow the countries “to have more affordable energy prices”, while her Latvian counterpart, Arturs Krisjanis Karins, said “this can be done if we’re working together”.

“That is amazing. Up to 20 gigawatts by 2030,” Ursula von der Leyen, president of the European Commission, said during the one-day Baltic Sea Energy Security Summit in Copenhagen. “It is already one-third of the overall EU ambition for offshore wind capacity by 2030.”

The energy crisis has prompted some European countries to call for previously shelved energy projects to be revived, such as a gas pipeline linking the Iberian Peninsula with the rest of Europe.


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