German economy minister raises gas supply warning

German Economy Minister and Vice-Chancellor Robert Habeck on Wednesday triggered the early warning level for gas supplies as Moscow continues to demand to be paid in rubles.

This move is the first of three warning levels, and it entails the creation of a crisis team in his office to deal with stability of the country's gas supply. Germany's gas storage is currently filled to about 25% capacity, Habeck said.

"There are currently no supply shortages," he explained. "Nevertheless, we must increase precautionary measures in order to be prepared in the event of an escalation on the part of Russia."  

Habeck called on businesses and individuals to try and reduce their energy consumption as much as possible as Germany tries to wean itself off dependence on Russian gas.

The three-stage emergency plan details ways to conserve gas, secure supplies and make sure households have adequate amounts of fuel.

Meanwhile, Austria announced that it is activating its early-warning phase of emergency regarding Russian gas supplies given Moscow's demand for payment in rubles.

Putin demands 'unfriendly' states to pay in rubles

Last week, President Vladimir Putin had announced that Russia would supply gas to Germany and other "unfriendly states" only against payment in rubles, a move likely intended to prop up the currency that has tumbled in value due to Western sanctions over Moscow's invasion of Ukraine.

Western countries have said they will not comply with Russia's demand.

Moscow on Tuesday reiterated that it will only be accepting payment in rubles for gas deliveries to the European Union.

Russian Deputy Foreign Minister Sergei Ryabkov said on Wednesday that requiring payment for energy exports in rubles rather than dollars or euros is not a breach of contract.

It's just Russia adapting to unprecedented pressure, TASS news agency quoted him as saying.

Ryabkov said he expected Russia and the European Union to reach agreement on their differences in the next few days, TASS reported.

EU says it prepared for possible Russian gas supply disruptions

Following Habeck's announcement, the European Commission said it was prepared for possible interruptions in gas supplies from Russia.

"We as a commission have been preparing for a very long time," EU climate policy chief Frans Timmermans told a news conference.

"We will of course, work closely with member states to have everybody be prepared for any sort of situations," he said.  

Timmermans did not give further details.

How German industry reacted

German industry representatives have reacted positively to the alert announcement.

The umbrella association for the energy and water industry, BDEW, said it was an important step in light of the looming threat of a disruption to gas supplies.

"Although there are currently no shortages of gas, all parties involved need to have a clear road map of their rights and obligations in the event of a supply disruption," said BDEW head Kerstin Andreae.

The head of the Federal Network Agency, Klaus Müller, also called for consumers and businesses to play their part in dealing with the situation. He underlined the need for reducing energy usage and to prepare "for all scenarios."

The German chemical industry association, VCI, also raised concerns. VCI chief Christian Kullmann told the Reuters news agency that he fears an "industrial conflagration" in Germany. 

"If our industry ran out of gas, we would have to shut down production facilities," Kullmann said. "Complex chemical plants cannot simply be switched off and on again like a microwave oven." 

Monika Schnitzer from the German Council of Economic Experts said that Germany needs to prepare for a decision by Moscow to stop delivering natural gas to the country.

"This is a possibility we need to prepare for," she told DW, stressing the unpredictable nature of the current situation.

She also urged individual households to reduce energy consumption. Every step to decrease usage helps "if the worse is to come," Schnitzer said.  

Germany's heavy reliance on Russian gas

Germany is heavily reliant on Russian gas for its energy needs, with over half of its supplies of the fossil fuel coming from Russia, making Europe's largest economy particularly vulnerable to the economic impact of the war in Ukraine.  

In recent weeks, Germany has accelerated plans to reduce its dependence and diversify its supplies. 

If the situation escalates and Germany is forced to implement its highest warning level, the government would likely take over distribution to ensure adequate gas supplies for "protected customers," which means households and hospitals, among other essential services.

fb, sri/kb (AP, dpa, AFP, Reuters)