German Economy Minister Declares Emergency Situation

Germany enters phase 2 of its emergency gas plan after Russia slows down supply. Germany seeks to reduce gas demand to avoid long-term shortages, while Russia is slowing gas supplies. As a result, the price of gas for consumers may increase even more.

German Economy Minister Robert Habeck announced on Thursday that the country will enter phase 2 of its three-stage gas emergency plan.

Advancing at the level of <x0larm” comes after Russia, the biggest gas supplier in Germany, threatens to ban gas supply under tensions related to the invasion of Ukraine by Moscow.

What does phase 2 mean?

At Faza 2, utility companies are theoretically allowed to forward the higher prices to customers, helping to reduce demand to avoid long-term supply shortages. However, this will not happen automatically, since it will require the official approval of the Federal Network Agency (Bundesnetzagentur), which is the regulatory authority for gas and electricity.

Faza 2's announcement is a precondition for the government's plans to activate more coal-powered power plants to avoid using gas in energy production.

Only in phase 3, at the level of <x0 emergency”, would Bundesnetzagentur be allowed to ration gas. Families have special protection and would take gas as long as possible, while industry would face shortages. Hospitals, hospital care facilities, care facilities and support for disabled persons, as well as firefighters, police and armed forces would also have protected status.

Germany is in phase 1 of its emergency plan since late March.

Last week, Russian supplier Gazprom reduced supplies through the Nord Stream gas pipeline to only 40% of capacity, and experts say it is only a matter of time before the supply is fully cut off.

What did the economy minister say?

Habeccus called the situation “serious”. He said cutting off the gas supply from Russia was “an economic attack on us”.

He said Russian President Vladimir Putin wanted to sow uncertainty, raise prices and create disagreements.

“We are in a gas crisis,” said German Economy Minister. “From now on, gas is a merchandise with a lack. Prices are already high and we should expect further growth,” he added.

According to him, the top priority now is filling deposits.

Alternative suppliers are being sought and renewable energy sources are developing, he added, calling also for more efforts to save gas. /DW