Gas Alert: What Consumers Should Know Now

Since last week, Russia has been pumping far less gas to Germany than had already been agreed – making it difficult to fill gas storage tanks for the winter. The already high wholesale prices have risen significantly since then. Sufficient reasons for the federal government to declare the second of three alert levels in the gas emergency plan.

What does the alert level declaration mean for consumers?

The announcement has no immediate effect on supply: home customers can continue to cook with natural gas, and gas heaters can continue to heat water. Heating does not play a role in the warm months. “The gas supply in Germany is stable at the moment. The security of supply in Germany remains assured for the time being,” the Federal Network Agency says in its daily management report.

But Al-Kabeer: “The situation is tense, and the deterioration of the situation cannot be ruled out.”

Is gas more expensive now?

Yes, this is to be expected, but not because of the alert announcement. Wholesale prices have risen steadily since the massive cuts were announced last week.

Natural gas to be delivered at the important Dutch trade hub TTF in July would cost around 135 euros per megawatt-hour on Thursday afternoon, up from 127 euros the day before. On Monday of a week, that is, before the throttling, the price was still good at 83 euros. That was also high. In the past, long-term contracts were often made for 20-30 euros.

If suppliers, such as utilities, did not demand enough cheap gas from wholesalers in the past, they had to buy it from the exchange – at current prices. Customers are charged additional costs – resulting in higher gas prices with delays.

Are municipal utilities and other gas suppliers allowed to raise prices now?

no not yet. However, under certain conditions, the Energy Security Act allows utility companies in the warning and emergency phases “the right to adjust prices.” If the mechanism is activated, suppliers can pass on their current incremental costs to their customers within just one week. This is to prevent them from going bankrupt. So the old contracts will become obsolete, even with a price guarantee – and they will be too expensive for customers.

But before that, the Federal Network Agency must have officially set a “significant reduction in the total amount of gas imported into Germany”, which has not yet happened. For now, it doesn’t look like that might happen any time soon. Federal Economy Minister Robert Habeck said Thursday that the mechanism has a downside as well. So we are working on alternatives. However, Habek said several times that this mechanism “has not yet been activated”.

What can home clients do now?

For example, Stadtwerke Münster has asked private homes and merchants to support filling gas storage tanks for the winter. “Gas consumption can be reduced, for example, by very simple measures such as sealing doors and windows with sealing tape, insulating heating pipes, or installing a thermostat for a digital cooler.” An optimized and maintained heating system helps save energy. Habeck also called for it.

Can consumers hope for more convenience?

yes. Because it’s hard to imagine that the federal government would pave the way for a massive increase in energy prices without citizen help. But the Traffic Light Coalition’s partners are still struggling with each other. As the SPD and the Greens push for more relief for citizens, FDP leader and Finance Minister Christian Lindner insists on complying with the debt brake again next year. It places severe limits on federal borrowing. Leaders of the three coalition partners discussed the potential mitigation on Wednesday night, but made no decisions.

Maintenance work on Nord Stream 1 in July

With a sinking feeling, the industry and government are looking forward to the maintenance of the Nord Stream 1 gas pipeline, which begins July 11. This process, which lasts several days, is actually an annual routine. But the question this time is whether Russia will actually turn on the gas tap again in ten days.

Coal-fired power plants must compensate for potential supply failures

The Federal Network Agency has already calculated various scenarios for the level of gas storage filling – even if the most important Russian natural gas pipeline in Germany will soon cease to operate. Before that, the Federal Council is also supposed to pass a law on July 8 that would make it possible to use coal-fired power plants to generate electricity. It should reduce gas consumption.

How dependent is Germany on its European partners in the gas crisis?

Germany is highly dependent on other European countries for its energy supply. From Habeck’s point of view, the question of individual national efforts is out of the question – after all, gas flows through other countries to Germany. “Without them we can pack up right away.”

In an emergency, countries should help each other

If things get really tight – and the emergency level in the gas emergency plan is reached – Germany and neighboring countries must also help each other under European law. In the event of less serious bottlenecks, Germany also concluded the so-called solidarity agreements with Denmark and Austria.

These details are regulated so that Germany can exchange gas with these countries quickly and easily. In fact, EU countries have had to conclude these solidarity agreements for years.

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