The gas brake is a bang – which still gives up too many puzzles. Above all, Germany has wasted too much time with shower tips and instructions for airing out since March. Because this aid package is not a plan for the energy supply.
You have to get that right first: The federal government is putting together what is probably the biggest aid package in the history of this country and the joy is restrained and slightly confused because nobody really sees through. Somehow there’s a discount for Christmas and the rest comes in the spring, and the industry, after all, hasn’t been forgotten either.
This gas price brake is historically high and at the same time peculiar: historical, because never before has so much money (96 billion euros) been spent on what is basically a targeted measure (relief in gas prices) in a limited period of time. And it is strange that no wave of relief rolls through the country, no deep sigh of liberation, but murmurs and calculations about what is to come.
There are also whispers that not even all the members of the expert commission, which collected the ideas under the chairmanship of Veronika Grimm, are sure of what was finally written in the paper that night. At least two different versions of the recommendations are circulating, along with tales of late solitary changes without general consultation.
Well then. Whether it’s a villa or a two-room apartment, according to these proposals, the state will relieve consumers in two stages, but only those with gas heating and district heating. If you heat with oil (and there are still 4.6 million oil heaters in use in the country) you will soon be paying your neighbor’s gas bill as well. After the down payment in December, a price brake will take effect for households and small companies from spring 2023 until at least the end of April 2024 – for a certain quota. Only 12 cents are due for this basic amount of gas, above that market prices apply. This measure alone will cost all taxpayers 71 billion euros.
The industry can also breathe a sigh of relief, which is a success – it now has security and the ability to plan into the next year. Uncertainty is poison for every industry. For companies with higher consumption, according to the proposal, the price for 70 percent of consumption in 2021 should be frozen at seven cents per kWh, above which market prices apply.
As with all aid packages, the government has to make a complicated trade-off. She wants to help and at the same time set incentives to save gas, she wants to be fair and yet not too complicated. So she always acts prophylactic, pragmatic and pedagogical. And here you have to be fair that such great solutions sometimes reach the wrong people. To put it bluntly, there is also a government discount for the heated swimming pool in December.
A clause is also causing a stir in the industry: “The consuming company can use the extracted gas volume for its own purposes or sell it on the market,” says the commission’s report. So companies could pocket the grant, shut down production, even stop it – or even plan to relocate abroad. Critics refer to the help as a “hibernation bonus”. Although the BDI, which sat at the rescue table in the form of Siegfried Russwurm, honestly assures that there is “a clear obligation to maintain the location”. It’s clear who wants to say no to 25 billion euros?
You now have to take a close look at what of the proposals will become law, and whether such misguided incentives will be mitigated by conditions and wording – you will not be able to prevent them completely, as we saw in the Corona crisis. The state is always rough or just. This time, too, there is a lack of data. Providers do not know exactly who and how many people live in their homes. So the help now often runs through landlords and administrators.
However, the EUR 96 billion, which is only part of the EUR 200 billion rescue package, does not solve the fundamental problem of our economy: natural gas remains scarce and expensive, and this package comes very late.
Let’s start with the second problem: why is a commission only proposing measures in mid-October when the gas shortage has been hitting us with full force since the spring? Why was so much time wasted? Of course, the gas storage tanks were successfully filled with a lot of tax money (15 billion euros), the LNG terminal in Brunsbüttel has been under construction since the end of September, the LNG ships will soon be in use, the emergency infusion is coming. But the rest of the time this country has wasted with shower tips and instructions for forced ventilation, with silly nuclear power plant debates and symbolic trips to distant countries to supposedly new gas suppliers.
The traffic light government, with its army of well-trained auxiliary bureaucracy, underestimated the drama. The FDP in particular should not have missed the fact that bakeries and butchers had to close after decades. Traveling on the Rennsteig to the glass industry or to the bakery around the corner would have brought a few insights and the insight that this crisis is not just about thermostats and shower heads.
This leads to the second problem, which is even more worrying. Because historians will bow to the rashes in the statistics and find that this country spent half a trillion euros between 2020 and 2022 to replace or maintain added value. Sure, it was necessary, but was it all inevitable? The first priority must be the goal of having an economy without state oomph.
The Chancellor’s broad-legged rhetoric of double boom (hopefully there won’t be a triple boom) is intended to drown out Germany’s weak response to the gas crisis since spring. It should have been much more robust earlier – for example that Germany will do everything possible to expand the offer: nuclear power plants remain on the grid, and not three, but six; Coal as a dirty bridge, and henceforth this country develops its own gas reserves. So some rhetoric for the supply side. A bit of “whatever it takes” when it comes to energy supply.
Instead, we even hesitate to sign long-term gas supply contracts because they are fossil fuels. The restructuring of our energy supply and economy remains inevitable, the decade up to 2030 must and will be “green” despite the gloomy prospects. But we should realize that we can’t continue playing Bullerby until then. You can subsidize gas until 2024 – even if these 96 billion euros take your breath away. But until then we don’t just have to save. But have a clear plan on how to replace the amount of energy that we no longer want to get from Russia.
As a reminder: We wanted to be two to three times faster by 2030 in order to achieve the major goals in the expansion of wind power and solar. That was ambitious. We shouldn’t convince ourselves that we’re going to be six times faster now.
This comment first appeared on Capital.de.
