Proclamation of Alert Level on German Gas Market

On 06/23/22, BMWK declared second stage of the gas emergency plan, the so-called „alarm stage”, after coordination within the federal government. The gas emergency plan has three levels, the third being the emergency level. Security of supply is currently guaranteed, but the situation is tense.

  • The reason for the alarm level being declared is the cut in gas supplies from Russia that has been in place since June 14, 2022 and the persistently high price level on the gas market.
  • The gas storage tanks are 65% full (as of July 12th, 2022), which is more than the same time in 2021. However, should Russian gas deliveries via Nord Stream 1 remain at the low level of 40%, a storage level of 90% by December can hardly be achieved without additional measures.
  • This means that there is currently a disruption in the gas supply, which is leading to a significant deterioration in the gas supply situation; the declaration of the alert level is therefore necessary. The European partners have been informed of the move.
  • In order to reduce gas consumption in power generation, the federal government will call additional coal-fired power plants out of standby.
  • At the same time, the federal government made available a credit line of initially 15 billion euros for filling the storage facility, secured by a federal guarantee. In addition, a gas auction model is to be launched in the summer, which will incentivize industrial gas consumers to save gas.
  • In the face of the impending gas shortage, GER must be able to significantly reduce gas consumption in power generation in order to replace the missing gas and thus mitigate the consequences of the gas shortage. For this reason, the federal government wants to set up a gas replacement reserve on the generation side until 31.03.24. To this end, power plants that are already available to the electricity system as a reserve are being upgraded in order to be able to return to the market at short notice. This means that the short-term use of coal-fired power plants in the electricity sector is made possible on demand, should the need arise. Gas contributed about 15% to public electricity generation in 2021, the share is likely to be lower in 2022 so far. Through the measures to reduce gas consumption, the power generation offer can be expanded by up to 10 GW in a critical gas supply situation, which substantially reduces gas consumption for power generation.
  • Gas auction model for industrial consumption: With a gas auction model for industrial consumption - similar to an auction - a mechanism is also created that gives industrial gas consumers an incentive to save gas, which in turn can then be used for storage. The model is intended to ensure that as many gas quantities as possible are available for any bottleneck situations in the coming winter.

Nevertheless, drive energy transition and climate protection forward

  • Even if we have to make difficult climate-related decisions in the short term, i.e. above all for the winter/heating periods 2022/23 and 2023/24 (including reactivation of coal-fired power plants), this does not call into question our commitment to the Paris climate targets nor our national/European climate targets, esp. our goal of phasing out coal power by ideally 2030 and achieving greenhouse gas neutrality by 2045. These targets still stand and indeed we are working on measures to accelerate their achievement and to ensure that measures such as the reactivation of coal-fired power plants remain short-term, emergency measures that can be installed for the next two winters at the longest.
  • We are, for example, implementing the most ambitious piece of energy legislation in decades (so called “Osterpaket”). This package lays the foundations for climate neutrality by, amongst other measures, working towards a renewables share of 80% in the electricity sector by 2030, with the goal of reaching near GHG-neutrality in the electricity sector by 2035. To achieve this, we will triple the speed of renewables expansion in the electricity sector.
  • And that is not all — our government is working on additional measures (so called “Sommerpaket”) to accelerate deployment of wind energy, implement drastic improvements in the buildings sector, and strengthen industry decarbonization. All of these measures will enter into force by 01.01.2023.
  • In addition, the EU-COM's RePowerEU plan underscores this ambition at European level. The main goal of this plan is to quickly end Europe's dependence on RUS gas supplies. As part of this plan, the EU wants to raise the renewable energy goal to 45% of electricity production by 2030. The EU energy efficiency goal is to be increased from 9% to 13%. All of these goals are underpinned by strong energy transition measures, such as the expansion of renewable energy, process simplification in the expansion of renewable energy, etc. Within a year, RUS gas imports should fall by 2/3 and no more RUS oil should be imported.

Find more information on the website of the Federal Ministry for Economic Affairs and Climate Action

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