Gas: to avoid rationing, Germany must reduce its consumption by 20%

Threatened by a major energy crisis next winter, Germany will have to reduce its gas consumption by 20%, it said on Sunday in the financial times the head of the Federal Network Agency (BNA) Klaus Müller. “If we don’t reach (this) target, there is a serious risk that we will run out of gasoline,” he warned.

In addition to these savings, Germany will need an additional 10 gigawatts of gas to make up for missing volumes from Russia, as the Nord Stream pipeline has been operating at just 20% capacity since mid-June, according to Klaus Müller. This would represent around 9% of the country’s current consumption. To do this, the main European economy relies on liquefied natural gas (LNG) from the United States, but it also hopes to import gas from other European countries.

In the longer term, doing without Russian deliveries will result in “a very high gas price” that is likely to weaken certain industrial companies on the other side of the Rhine, according to Klaus Müller. “Part of the production could be relocated from Germany because gas will have become too expensive,” he warned.

Rationing risk

Fearing a gasoline shortage in the coming months, the German government is already calling for sobriety. Over the weekend, the Ministry of Economy ordered all companies to reduce the temperature in their premises to no more than 19 degrees this winter.

Germany has already entered phase 2 of its gas emergency plan, which consists of three phases. If reached, Stage 3 would result in gas rationing to industrial companies. The BNA would then be in charge of identifying the activities whose supply would be reduced.

Construction of LNG terminals

Germany will also be able to rely on its gas reserves. Currently, the tanks are 75% full, but the law requires that 85% be reached by October 1 and 95% by November 1. Even if filled to 100%, these storages would only account for around two and a half months of gas consumption in the event of a complete halt to Russian deliveries and a relatively mild winter.

Europe’s leading economy wants to permanently do without Russian gas by the summer of 2024. To achieve this, the government is seeking new sources of supply, in particular LNG. Four floating LNG terminals have also been leased and three permanent terminal construction projects have already been launched.