Gas: to avoid rationing, Germany must reduce its consumption by 20%

Gas: to avoid rationing, Germany must reduce its consumption by 20%

 Gas: to avoid rationing, Germany must reduce its consumption by 20%

 

Threatened by a major energy crisis next winter, Germany will have to reduce its gas consumption by 20%, said Sunday in the Financial Times the boss of the Federal Network Agency (BNA) Klaus Müller. "If we don't reach (this) target, there is a serious risk that we will run out of gas," he warned.

In addition to these savings, Germany will need an additional 10 gigawatts of gas to make up for missing volumes from Russia as the Nord Stream gas pipeline has been operating at only 20% capacity since mid-June, according to Klaus Müller . This would represent around 9% of the country's current consumption. To do this, the leading European economy is relying on liquefied natural gas (LNG) from the United States but also hopes to import gas from other European countries.


In the longer term, doing without Russian deliveries will result in “a very high gas price” likely to weaken certain industrial companies across the Rhine, according to Klaus Müller. "Part of the production could be relocated from Germany because the gas will have become too expensive," he warned.
Risk of rationing

Fearing a gas shortage in the coming months, the German government is already calling for sobriety. Over the weekend, the Economy Ministry ordered all businesses to reduce the temperature in their premises to no more than 19 degrees this winter.

Germany has already entered phase 2 of its gas emergency plan, which has three phases. If reached, Stage 3 would result in gas rationing to industrial enterprises. The BNA would then be responsible for identifying the activities whose supply would be reduced.
"You have to try to understand what effect cutting off gas to certain companies will have on the supply chain of critical products, what will be the consequences for jobs, for production, for value chains", underlined Klaus Müller .
Construction of LNG terminals

Germany will also be able to rely on its gas reserves. Currently, the tanks are 75% full, but the law requires reaching 85% by October 1 and 95% by November 1. Even if they were 100% full, these storages would only represent about two and a half months of gas consumption in the event of a total interruption of Russian deliveries and a relatively mild winter.

Europe's largest economy wants to permanently do without Russian gas by the summer of 2024. To achieve this, the government is looking for new sources of supply, particularly LNG. Four floating LNG terminals have also been leased and three permanent terminal construction projects have already been launched.