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Germany enters phase 2 of emergency gas plan

June 23, 2022

Germany is looking to lower gas demand to ward off long-term shortages as Russia throttles the gas flow. Gas prices for consumers could rise even more — and even be rationed — as a consequence.

Compressor station for gas in Mallnow, Germany
This compressor station in Mallnow, Germany, is supplied mostly with Russian gasImage: Patrick Pleul/dpa/picture alliance

Germany's Economy Minister Robert Habeck on Thursday announced that the country will enter the second phase of its three-stage emergency gas plan.

The move to "alarm" level comes amid the threat that Russia, Germany's top gas supplier, could stop supplying the fuel amid tensions over Moscow's invasion of Ukraine.

What does Phase 2 mean?

In the second phase, utilities are theoretically permitted to pass on high prices to customers, thus helping lower demand in a bid to prevent long-term supply shortages.

However, this would not happen automatically, requiring the official say-so of the Federal Network Agency (Bundesnetzagentur), which is the regulatory authority for gas and electricity.

The announcement of second phase is a prerequisite for the government's plans to employ more coal-fired electricity plants to avoid gas use in electricity production.

Only under Phase 3, "emergency" level,  would the Bundesnetzagentur be called upon to ration gas. Private households enjoy special protections and would receive gas for as long as possible, while industry would have to put up with shortages.

Hospitals, inpatient care facilities, facilities for the care and support of disabled people, as well as the fire brigade, police and the armed forces would also have protected status.

Germany has been in the first phase of its emergency plan since the end of March.

Russian supplier Gazprom cut flows via the Nord Stream 1 pipeline to just 40% of capacity last week, and experts say it is only a matter of time until the supply is cut completely.

Russia using gas as 'a weapon against Germany'

What do German politicians say?

Economy Minister Habeck, describing the situation as "serious," called Russia's reduction in the gas supply "an economic attack on us."

He said Russian President Vladimir Putin wanted to sow uncertainty, drive up prices and create rifts.

"We are in a gas crisis," Habeck said. "From now on, gas is a commodity in short supply. The prices are already high and we have to reckon with further hikes," he added.

He said the top priority now was to fill storage facilities. Alternative suppliers were being sought and renewable energy sources were being developed, he said, also calling for more efforts to save gas.

Thomas Silberhorn, a member of the German Bundestag with the opposition Christian Social Union, told DW he agreed with the government that Russia was cutting supplies on purpose.

"I fully agree it's an economic attack not only on Germany, but on the entire European Union internal energy market," said Silberhorn. "Of course, it is aimed at keeping prices high and blackmailing Germany and the European Union. And that's why we have to become completely independent from Russian oil and gas as soon as possible."

"The difficult months will come in winter. That's why we have to be cautious and very consistent in our strategy."

Is scarcity Putin's weapon in Ukraine war?

tj,rc/kb (Reuters, AFP, dpa)