Habeck has previously warned that the situation will be “very tight in the winter” without precautionary measures to prevent a gas shortage.
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Germany has said it is moving to the so-called “alert level” of its emergency gas plan, as the reduction in Russian flows exacerbates fears of a shortage of winter supplies.
Economy Minister Robert Habeck announced on Thursday that Germany would move on to the second phase of its three-stage plan. This means that Europe’s largest economy now sees a high risk of short-term gas supply shortages.
Germany has seen a sharp drop in Russian gas supplies, which has led the country to warn that the situation will be “very tight in the winter” without precautionary measures to avoid a shortage of supply.
“We must not be fooled: cutting off gas supplies is an economic attack on us [Russian President Vladimir] Putin, “Habeck said in a statement, according to a translation.
“We are defending ourselves against this. But it will be a stony path that we must now take as a country. Although we do not really feel it yet: we are in a gas crisis,” he added.
Habeck said gas had now become a scarce commodity and warned that an extraordinary rise in prices could persist. “This will affect industrial production and become a major burden for many consumers. It’s an external shock,” Habeck said.
According to Germany’s gas emergency plan, the alert level phase is activated when there is “an interruption of gas supply or an exceptionally high gas demand which causes a significant deterioration in the supply situation of gas, but the market is still able to handle this disruption or demand, without resorting to non – market – based measures. “
This phase does not require state intervention measures. These start the “emergency phase” of the third stage, if the government considers that the fundamentals of the market are no longer applied.
European policymakers are currently struggling to fill underground storage with natural gas supplies to provide homes with enough fuel to keep the lights on and houses warm before the cold returns.
The EU, which receives about 40 percent of its gas through Russian pipelines, is trying to quickly reduce its dependence on Russian oil in response to the Kremlin’s attack on Ukraine for months.
Germany, which is heavily dependent on Russian gas, had previously tried to maintain strong energy ties with Moscow.
“Coal is burning again”
Germany declared the first phase of its gas emergency plan on March 30, about a month after the Russian invasion of Ukraine triggered an energy crisis in Europe.
The “early warning phase” acknowledged that while there were still no supply disruptions, gas suppliers were invited to advise the government as part of a crisis team. Habeck then called on all gas consumers, from industry to households, to reduce their consumption as much as they could.
Along with Italy, Austria and the Netherlands, Germany has indicated that coal-fired power plants could be used to offset the cut in Russian gas supplies.
Coal is the most carbon-intensive fossil fuel in terms of emissions and therefore the most important substitution target in the shift to alternative energy sources.
Germany, Italy, Austria and the Netherlands have indicated that coal-fired power plants could be used to offset the cut in Russian gas supplies.
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Habeck said last week that the government’s decision to limit the use of natural gas and burn more coal was a “bitter” move, but the country must do everything possible to store as much gas as possible.
“Coal is on fire again,” Ole Hansen, head of commodity strategy at Saxo Bank, told CNBC’s “Squawk Box Europe” on Thursday. “Producers had been moving towards a lower-demand future, but it’s obviously not what we’re seeing right now.”
Speaking ahead of Germany’s move to the alarm phase of its emergency gas plan, Hansen said the statement would reaffirm Europe’s plight, with coal seen as a “short-term solution” to replace the reduced flows of Russian gas.