The gas emergency plan has been activated since March because of the war in Ukraine. So far, the first stage is effective, two more are possible. But when could they come into force and what happens then? Private households would recently be affected by savings – unlike companies.
As early as March, the federal government had activated the gas emergency plan and declared the early warning level due to threatening supply problems in view of the Ukraine war. Recently there has been speculation as to whether the next warning level could be declared soon. The “Frankfurter Allgemeine Zeitung” reported on the corresponding preparations by the federal government – but they denied it. “The legal regulations and specifications apply to the stages of the gas emergency plan. We make decisions based on these specifications and do not speculate about them. Decisions are made based on the current situation and the current picture of the situation,” said the Ministry of Economic Affairs. Security of supply is currently guaranteed, but the situation is serious.
What is the Gas Contingency Plan?
The gas emergency plan is based on a European regulation to ensure a secure gas supply from 2017. Three escalation levels give the government different degrees of scope for action. The first level is the early warning level, followed by the alert level and the emergency level. The emergency plan had never been used in Germany before.
What does the early warning level mean?
The early warning level means that the federal government, under the direction of the Ministry of Economic Affairs, is closely monitoring the situation on the gas market. A crisis team made up of authorities, energy suppliers, transmission system operators and representatives of the federal states meets regularly and advises the government. Gas suppliers and network operators provide the federal government with regular assessments of the situation.
However, the state is not yet actively intervening in the gas market – on the contrary, gas suppliers and network operators must procure more gas as part of so-called market-based measures, fill the storage facilities as best as possible and optimize gas flows.
What are the next steps?
At the alert level, the frequency of crisis talks is increased, and the authorities can ask freight forwarders and gas customers to voluntarily supply more gas or use less gas.
If the federal government declares the emergency level, it can actively intervene in market activity: the Federal Network Agency then decides who will receive how much gas. Private consumers or social institutions such as hospitals, among others, enjoy special protection – these must be supplied with gas “as far as possible”, explains the Ministry of Economic Affairs.
What is the current supply situation in Germany?
According to the Network Agency’s current management report, the situation is “tense” and the authority is in constant contact with the companies in the gas industry. However, the supply is stable and the security of supply is still guaranteed. The reservoirs were recently filled to a good 58 percent. The network agency renewed the call to “save as much gas as possible”.
Is the supply of consumers secured?
Private customers also enjoy special protection in the emergency phase. According to the Energy Industry Act, a private customer is anyone who uses energy for their own consumption in the household or whose annual consumption for professional, agricultural or commercial purposes does not exceed 10,000 kilowatt hours. Gas suppliers must guarantee the natural gas supply to these customers for a period of at least 30 days and take appropriate precautionary measures. However, further price increases cannot be ruled out.
To what extent are companies affected?
The Federal Network Agency makes the decision on prioritizing the gas supply of companies in the event of an emergency. The aim of this prioritization is to secure the vital need for gas while taking into account the protected customers and minimizing the consequential damage.
According to the Federal Network Agency, it is preparing for the emergency level. In such a case, it is important to “limit damage”. For this purpose, the network agency collected data on gas consumption in Germany and defined criteria for the sequence of possible shutdowns or reductions.
In addition to the urgency of the measure, the size of the company, the lead times – because some companies need more time for the orderly shutdown – and the associated economic damage are also important. Finally, the costs and the restart as well as the importance of the supply for the general public play a role. There is no specific order.
Gas consumption in German industry is high: According to the Federal Statistical Office, around 31 percent of the energy consumed is covered by natural gas. Gas also plays an important role as a precursor product, particularly in the chemical industry. Almost 37 percent of gas consumption in industry in 2020 was used for the manufacture of chemical products, food and animal feed production accounted for a further eleven percent of gas consumption. The metal industry consumed 10.3 percent.
