Wed, 06 Jul 2022

The measures in question kick in when there is a major disruption in supply or demand

Germany is preparing to enter the second phase in its gas emergency plan within five to 10 days, Die Welt reported on Tuesday, citing sources familiar with the matter.

The so-called "alarm phase" is triggered when there "is a disruption in the gas supply or an exceptionally high demand for gas which leads to a significant deterioration of the gas supply situation, but the market is still able to cope with this disruption or demand without the need to take non-market based measures," according to the German Economic Ministry's 3-stage plan.

The Federal Association of Energy and Water Industries refused to confirm or deny whether the next step of the emergency plan was due to take effect when asked by Die Welt.

Gas regulator Bundesnetzagentur has recently outlined details of an auction system to be debuted in coming weeks aimed at reducing gas consumption among manufacturers. The agency's head has expressed concern that current gas supplies will last Germany through the winter. At the same time, the CEO of Germany's largest energy utility, Markus Krebber, hinted at an apocalyptic scenario as "there is currently no plan... at European level" to "redistribute the gas if we were fully cut off."

If imposed, the measures will allow utilities to pass on gas costs to consumers. While it is unclear how high those price increases will be, one source suggests the average three-person household could face an increase as high as €2,000.

The price of fuel has skyrocketed in recent months following the launch of Russia's special military operation in Ukraine, which led the EU to impose massive sanctions on Moscow. However, while those sanctions were intended to punish Moscow economically, they have had the reverse effect, increasingly affecting European families. A recent poll found as many as one in six Germans reported skipping meals to make ends meet.

The potential imposition of new emergency measures comes after Russia Gazprom's move last week to cut natural gas supply to Germany by 60%. While Berlin slammed the Russian gas company's decision as "political," Moscow explained "there is simply nothing to pump with," pointing out that Gazprom was unable to safely maintain gas flow without a turbine that had been sent by Siemens Energy to Canada for repair and not returned.

"This is a man-made crisis created by the EU," Kremlin spokesperson Dmitry Peskov said on Monday. "We have gas, it's ready to be delivered, but the Europeans have to give back the hardware. And repair the hardware in line with their commitments."

Should the final stage of Germany's emergency gas plan be triggered, the state will be placed in charge of rationing gas. This would happen if there is an "is an exceptionally high demand for gas, a significant disruption in gas supplies or another significant supply situation and all relevant market-based measures have been implemented, but gas supply is insufficient to meet the remaining gas demand so that additional non-market based measures need to be taken, in particular to ensure the supply of gas to protected customers," according to the Economic Ministry.

(RT.com)

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