Germany will significantly increase its use of highly polluting coal to preserve its pre-winter energy supply, as Russian cuts in gas exports threaten deficits in Europe’s largest economy.
The German government said on Sunday it would pass emergency laws to reopen shut-down coal plants to generate electricity and auction off gas supplies to industry to encourage companies to curb consumption. The measure illustrated deep concern in Berlin about the possible shortage of gas during the winter months.
“This is bitter, but in this situation it is essential to reduce the use of gas,” said German Economy Minister Robert Habeck, a member of the Green Party.
Russia this week reduced the capacity of the main gas export pipeline to Germany by 60 percent, causing an impact across the continent as Western officials became convinced that Moscow is arming its gas exports in Germany. response to EU sanctions following the large-scale invasion of Ukraine.
Italy, which has also seen its gas supply drop from Russia, is expected to announce emergency measures in the coming days if supplies are not restored.
Habeck said Berlin was working on a new law to temporarily recover up to 10 gigawatts of idle coal-fired power plants for up to two years; this would increase Germany’s dependence on coal for electricity generation by a third.
“The situation is serious,” Habeck said. “Obviously Putin’s strategy is to upset us, drive up prices and divide us… We will not allow that to happen.”
The plan is inconsistent with Germany’s climate policy; it aims to phase out coal by 2030, as it is much more carbon-intensive than gas.
The remaining three active nuclear power plants in Germany have a capacity of 4 gigawatts and are expected to go off the grid later this year. Its useful life will not be extended, as the government has concluded that technical and safety barriers are too high.
Before the Russian invasion in February, Germany imported 55% of its gas from Russia.
In recent days, Russian-controlled gas exporter Gazprom has reduced supply volumes through the Nord Stream 1 (NS1) gas pipeline across the Baltic Sea to Germany, blaming Canadian sanctions that left the pumping equipment maintained by Siemens Energy stranded in Montreal.
Germany and its allies in Europe have rejected Gazprom’s claims, arguing that any technical problems were a pretext for Moscow’s retaliation against EU sanctions. Gazprom has not used alternative pipeline routes to offset the supply shortfall through NS1.
European gas prices, which are now approaching record levels, rose further last week in response to recent supply cuts.
Rising energy prices are fueling inflation and a cost-of-living crisis across Europe, which central banks are struggling to tackle without dropping the region’s economy into recession.
German Chancellor Olaf Scholz described the country’s dependence on Russian energy as “a mistake of Germany’s economic policy” and told the DPA that previous governments had not created alternative gas supply routes.
Germany plans to install four floating liquefied natural gas (LNG) terminals and has prioritized filling gas storage tanks that can be used in the winter. They are currently 56% full and Habeck wants to reach 90% by December.
“We need and will do everything we can to store as much gas as possible,” Habeck said, calling it “the top priority” and adding that “otherwise it would be very difficult in the winter.”
Germany aims to reduce normal consumption by about a fifth without resorting to rationing, while increasing the supply of Norwegian gas pipelines and LNG imports.
However, this could leave supplies dangerously tight, especially if it is a particularly cold winter. Average temperatures in Germany are 6 ºC or less from November to April, according to the German gas regulator.
Analysts say German storage, if filled to 90 percent, could only cover two or three months of normal winter consumption if Russian supply is cut off completely.
Germany will also introduce an auction mechanism for industrial gas users, Habeck said. Companies that reduce consumption will be compensated, a person familiar with the government’s plans told the Financial Times, but details are still being finalized.
Last year, gas-fired power plants accounted for 15 percent of German power generation. At the end of May, Germany had 31.4 gigawatts of coal-fired power plants and 27.9 gigawatts of gas-fired power plants on the grid, according to regulatory data.
The 10 GW of coal capacity that will be put back into the grid represents just under 5% of Germany’s total production capacity.