The gas supply situation in Germany remains tense. The Federal Government is therefore stepping up its preparations for the winter. Federal Minister for Economic Affairs and Climate Action Robert Habeck is presenting a further energy security package today to supplement the broad-based measures which have already been taken. The heart of the new package consists of measures to save gas and fill the storage facilities. The background to this is that, even following the maintenance work on the Nord Stream 1 pipeline, the flow of gas from Russia is significantly reduced even though there are no technical reasons not to use the full capacity and Russia has obligations to supply the gas.
“Russia’s war of aggression against Ukraine has placed Germany in an energy crisis which is being deliberately caused by the aggressor, Vladimir Putin. There are no technical reasons why Nord Stream 1 should not be operating at full capacity following the maintenance work. The low capacity utilisation of around 40% therefore speaks a clear political language and confirms that we cannot rely on the gas being delivered. Putin’s goal is to sow uncertainty, to drive up prices, to split our society and to weaken support for Ukraine. We will not bow to this, but will respond with concentrated and resolute action. We are making preparations to get through the winter,” said Minister Habeck.
The Federal Government has already launched a host of structural measures over the last few months to reduce dependence on Russian gas and to boost security of supply. These include the establishment of LNG infrastructure in Germany, including the procurement of floating terminals, the diversification of gas supplies, the filling of the gas reservoirs, measures to cut gas consumption in the electricity sector and industry, the acceleration of the expansion of renewable energy, and backing for the energy supply companies (cf. (in German) Third Energy Security Progress Report of 20 July 2022).
“We have made good progress, not least because the business community and households are supporting our efforts. This is something we can build on – and we are now doing that. The situation remains tense, so we are stepping up our efforts. Gas consumption needs to fall further, and the reservoirs need to fill up. We all need to work together to achieve this,” said Habeck. He stressed this point: “We will need plenty of stamina. Because we need to prepare not just for this winter, but also the next one. We are making great strides forward on reducing our dependence on Russian gas, but we can already predict that 2023 will still be a challenging year. Gas remains a scarce resource, and we should be correspondingly careful in the way we use it.”
Three elements in the energy security package
The energy security package basically consists of three elements: efforts to fill the gas reservoirs will be stepped up further, the consumption of gas to generate electricity will be cut, and efficiency and conservation measures will be expanded. The measures will gradually be implemented in the coming months and following the summer break in close coordination within the Federal Government.
I. Filling the gas reservoirs:
In order to ensure that the storage facilities are filled, the storage levels prescribed by law will be increased further. Specifically, a new interim target of 75% is introduced to apply on 1 September 2022. The intention of the rules is that, even if gas flows remain low, gas should not be taken out of the storage facilities, but that the facilities should continue to be filled. Further to this, the previous requirements on storage levels are increased further: from 80% to 85% on 1 October, and from 90% to 95% on 1 November. The extra 5 percentage points signify, as a maximum on 1 November of a calendar year, approximately 1 billion cubic metres of gas (approx. 12 TWh). The ministerial ordinance needed for this is being coordinated by the ministries and will enter into force in the coming days.
II. Reducing the amount of natural gas used to generate electricity
In order to cut the consumption of gas to generate power, the Federal Government has already decided to use more coal-fired power plants. Hard coal-fired power plants can be brought back out of the grid reserve. A corresponding ordinance is already in force. There will now also be an ordinance which activates a lignite-fired reserve from 1 October. The lignite-fired power plants will then be able to return to the electricity market and replace gas-fired power plants. This will be backed by a gas conservation ordinance which prevents gas from being used unnecessarily to generate power. This ordinance is currently being prepared, and will enter into force if there are signs that we need to reduce the amount of gas used to generate electricity even further. Systemically relevant gas-fired power stations will not be affected.
Further to this, rail capacity to transport fuel is to be secured. In this regard, Federal Minister for Digital and Transport Volker Wissing stated: “In view of the current challenges in the field of energy supply, we are working full steam ahead on various options to secure and increase the rail transport capacities. In a first step, we are adapting the conditions for the use of the rail network in order to give priority to oil and coal shipments when free track is assigned. If this is not enough, we can enact statutory instruments under the Energy Security of Supply Act to give priority to shipments at the capacity allocation level. Even slots already allocated would then be made available for energy shipments.” The Federal Transport Ministry and the Federal Economic Affairs Ministry are working closely together on this.
Renewable energy is also to make a greater contribution towards displacing natural gas from the electricity generation sector. In particular, the generation of biogas is to be expanded, not least via a suspension of the prescribed maximum annual output for the installations. In the case of solar power, there are plans to delete the 70% cap on existing installations so that they can also feed in more electricity. This will apply to new installations from 1 January 2023. These measures will require changes to the law, the details of which are being coordinated within the Federal Government.
III. Efficiency and conservation measures
It is important for gas consumption to also fall in factories, offices and households. To this end, the Economic Affairs and Climate Ministry is planning new rules on the basis of the revised Energy Security of Supply Act (section 30). Some of the measures will be limited to six months, others to two years, in order to respond to the needs of the next winter.
Energy conservation is to be improved in companies. Companies which have introduced an energy and environmental management system are to implement those energy conservation measures which pay off within two years. This will basically affect large companies which consume more than 10 GWh of energy and which for example are entitled to statutory privileges in terms of caps on electricity tax or provisions to prevent carbon leakage.
To cut energy consumption, it makes sense to stop heating spaces where people do not regularly spend time, e.g. corridors, large sheds, foyers and technical areas, unless there are safety requirements necessitating heating. In the case of public institutions and office buildings, this is to be regulated in ordinances. The measure is to run for six months. Also, the Economic Affairs and Climate Ministry will be talking with the social partners about further potential savings at work, in close cooperation with the Federal Labour Ministry.
More energy can still be saved in residential buildings. The Economic Affairs and Climate Ministry is already providing information about voluntary, small but effective measures (turning down the heating a little, brief ventilation periods rather than having partially open windows with the heating fully on, and only heating those rooms which are actually used). By doing this, people can already help to cut consumption and save costs in the autumn and winter (cf. energy switching campaign). Also, government funding is currently available for energy-related improvements to buildings (e.g. the replacement of windows).
There are still more ways to cut consumption. For example, tenants are to be given more scope to save energy. In some cases at present, there are contractual obligations to heat rented accommodation to a minimum temperature – i.e. if tenants wish to turn down their heating, they are in breach of their rental contracts. For this reason, these contractual obligations are to be temporarily suspended – in close coordination with the relevant federal ministries – so that tenants wishing to save energy and turn down their heating are allowed to do so.
Anyone who has their heating system checked and optimised can save energy and money. For example, the inlet temperature can be reduced, or the heating turned down at night. All owners of gas heating systems should undertake this check. To ensure that this happens, it will be made mandatory – with sufficient grace periods. Talks on the implementation of this have begun with the Central Association for Sanitation, Heating and Air Conditioning (ZVSHK).
Greater efficiency can also be achieved via hydraulic balancing because this ensures optimal distribution of the water in the radiators. In future, all owners of buildings with central heating – primarily multi-family buildings – are to do this, if they have not already done it in recent years. Since this is a maintenance job, the owner / landlord is responsible for the costs. Also in the case of buildings with central heating, the replacement of inefficient, unregulated heat pumps is to be made mandatory – another investment that pays off. This is because unregulated heat pumps like heating circuit pumps or circulation pumps use a lot of energy. The replacement of the heat pumps pays off over the period of use, generally several times over.
Finally, there is to be a prohibition on home-owners using gas to heat private swimming pools. In addition to the high level of energy required for the heating, the cessation of heating can also bring about savings on water circulation and filters.
Minister Habeck said: “The measures are necessary, appropriate and targeted. We will flesh out the details in close coordination with the other relevant ministries. Initial discussions have commenced, and I am most grateful to my colleagues,” said Minister Habeck.
Klara Geywitz, Federal Minister for Housing, Urban Development and Building, said: “As is so often the case, optimising the technology offers plenty of potential. Right from the outset, I have always said that we need to start by optimising the heating systems. We need to make the most of the technical reserves in our buildings. This was a particularly important point for me in our cooperation on these measures with the Economic Affairs and Climate Ministry. From the end of July, we in the Federal Ministry for Housing, Urban Development and Building will set up a major funding programme for modernisation, not least to bring swimming pools and facilities for young people in line with the latest climate technology.”
Habeck announces talks with Energy Conservation Alliance
Habeck will again invite the Energy Conservation Alliance, which was set up in June and consists of associations of civil society, consumer protection, commerce and municipalities, to discuss additional efficiency measures.
“Over the last few weeks, we have already seen how many energy-saving ideas there are in cities and municipalities, commerce and society. Everyone has recognised how serious the situation is. Municipalities are cutting the temperature in open-air and indoor swimming pools, heating in public buildings is to be turned down, heating systems replaced. A lot is already happening, and now it is important to bring the ideas together, to spread them around, and to come up with fresh ideas. This is a phase in which all areas can make a contribution. We as policy-makers, resolutely implementing the necessary structural measures, as well as commerce, the Länder, the municipalities and society at large. The combined total of all the contributions will help us to get through this winter and prepare for the next one. It will be a challenging, stony path, but we can navigate it successfully,” said Habeck.
The minister also pointed out that saving energy is a key response to the high prices. “The pressure of costs is enormous, particularly for people on lower incomes. We have already launched two relief packages which are having an effect. Nevertheless, we need to do more, particularly if the prices continue to rise. The Federal Government is engaged in talks about this.”
The measures being taken by the Federal Government to save more energy fit in with the European Commission’s efforts to cut energy consumption across the EU. According to this, the Member States are to voluntarily cut their gas demand by 15%. However, the European Commission is given the possibility to declare a “Union Alert” which would make this cut mandatory. “The energy supply only works on a European basis. It is therefore right for all the EU Member States to cut their consumption and to be willing to help one another,” said Habeck. The EU has come up with a list of possible measures that the Member States can take to cut their gas demand. These include fuel switching measures, the development of auction procedures in the industrial sector, and information campaigns on how consumers can save gas and energy.
The energy security package can be found (in German) here.