On March 30, Germany launched the first phase of a plan designed to secure the country’s gas supply. Economy Minister Robert Habeck said he feared a deterioration in Russian gas supplies due to the war in Ukraine.
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This announcement comes at a time when the Kremlin has announced that it wants to be paid in rubles for its energy exports. Berlin rejected this request, while Germany is more than 50% dependent on Russian gas and coal imports.
A three-level plan
Robert Habeck sought to be reassuring, saying that gas stocks were 25% full. According to him, the announced measure is simply to monitor consumption and available reserves more closely.
The plan has three levels: that of early warning, launched on March 30, that of alert and that of emergency. The first two involve market-based solutions, implemented by gas suppliers. The last involves direct state intervention. The text specifies that it is possible to go directly to the second or last level if the situation requires it.
An initial recourse to the market
Early warning corresponds to a situation where there are “concrete, serious and reliable evidence that an event is likely to cause a serious deterioration in the supply of gas likely to lead” at the following levels. According to the German government, this is the case with the war in Ukraine today.
To go to the alert level, the second provided for by the plan, a “disruption of supply or exceptionally high demand results in a material deterioration in the supply of gas to customers”. In this situation, however, the State considers that “the market is still able to handle this disruption or high demand on its own.”
In case of failure, the State gets involved
Finally, the country moves to the last phase of its plan, the emergency level, when all the measures available to the private sector have been implemented and the gas supply is still insufficient. It then becomes necessary to resort to direct state intervention.
The text describes in detail the concrete elements making it possible to trigger the different phases of the plan. Among the situations that may justify an early warning situation are mentioned the disruption of a major source of supply, a serious technical incident preventing the gas infrastructures (such as pipelines) from functioning or an extreme cold snap.
The measures available to companies are varied. In particular, they can buy gas on the world market or draw on domestic gas stocks. It is also possible to interrupt the distribution of gas to certain points, such as storage areas.
A precedent in 2012
It is also possible to have recourse to a rebalancing in the internal distribution of gas. In 2012, a cold spell, for example, led to very high demand for gas in Europe, while deliveries to the south of the country were lower than expected. By redirecting part of the gas from the north of the country to the south, it had been possible to maintain the supply at a usual level.
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If these provisions are not sufficient, the State can implement even more drastic measures. For example, it can restrict the production of electricity in gas plants, disconnect certain users to give preference to individuals or even prohibit the sale of gas abroad.