Scholz concedes energy insecurity a danger to German social peace

Chancellor Olaf Scholz has insisted that “no one will be left alone” with rising energy costs but conceded that Russia’s war on Ukraine is endangering the social peace in Germany.

He was speaking on Monday in the Baltic city of Lübeck, two hours west of where the Russian Nord Stream pipeline comes ashore. The 11-year-old pipeline was shut down on Monday for annual scheduled maintenance by its owner, Russia’s state-controlled energy company Gazprom, and is likely to be out of action for 10 days.

Senior German officials fear the pipeline will never be switched back on, bringing chaos to the continent.

On Monday, German energy companies warned that – unlike during previous scheduled maintenance of Nord Stream 1 – Russia has not increased gas deliveries via an older, overland pipeline through Ukraine and Poland.

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Italy and Austria reported further drops in their scheduled gas deliveries on Monday, following previous cuts in supply last month.

In Lübeck, Mr Scholz insisted his government was working overtime to cushion spiralling prices and on energy alternatives to Russian gas.

Gas deliveries

“The worries that people have on account of the war has left heads and hearts a-flutter,” he said. “We are not yet through this, people are worried, but we have to stand together.”

In Prague, his economic and energy minister Robert Habeck agreed a plan to share, if necessary, gas deliveries with the Czech Republic and Austria. “If the situation deteriorates further, we have to act in solidarity and co-ordinate more closely,” he said.

Last week, the energy minister shifted Germany to stage two of its energy emergency plan, one step away from crisis rationing that would prioritise gas and other energy for homes and hospitals, and only then for industry.

On Monday, Germany’s chemical lobby called this plan into question, suggesting that “securing jobs and thus income is important for families and more important for society than ensuring private gas supplies completely”.

“What’s the point if households could continue to get gas but could no longer pay for it?” asked Christian Kullmann, head of the Chemical Industry Association (VCI).

With economists warning that a full gas cut-off could tip Europe’s largest economy into recession, German industry lobby chief Siegrid Russwurm said on Monday his members were “prepared for the worst and hoping for the best”.

Russian dependency

“We cannot play down the crisis,” he added, “but things now rest with the man in the Kremlin.”

Germany’s energy crisis has focused attention on its growing dependency on Russian gas and oil in the last decade, as Berlin began to pivot away from nuclear energy towards renewables.

But Monday’s shutdown of Nord Stream 1 – and Berlin’s refusal to certify the second, completed Nord Stream 2 pipeline – has cast attention, too, on the parlous state of Germany’s strategic gas reserves.

Taken together, the country’s storage facilities are just two-thirds full because many of its largest reserve facilities are empty.

These empty facilities were owned by German chemicals company BASF until 2015, when it sold them to Gazprom. Last October, ahead of the winter heating season, one Gazprom-owned facility near the Dutch border was just 9.45 per cent full.

Last March, its storage capacity fell to 0.95 per cent, prompting Germany’s energy network agency to sound the alarm. A new federal law requires German gas facilities to be 90 per cent full by winter but, with prices rising amid scarce supply, the federal energy agency has drawn up several emergency scenarios.

“There are several scenarios in which we would slip into emergency situation without enough gas,” said Klaus Müller, Germany’s energy agency chief. “Avoiding this emergency scenario now depends on us saving gas and optimising our heating.”