The federal government is preparing to declare the national gas emergency plan on alert within a few days. WELT learned this from circles in the energy industry. This second stage of the emergency regulation could immediately and significantly increase the price of natural gas for all consumers.
According to information from WELT, the State Secretary in the Federal Ministry for Economic Affairs and Climate Protection (BMWK), Patrick Graichen, prepared the energy industry for the upcoming step on Monday. The suppliers should “assume” that the alarm level will be declared within five to ten days, confirmed four people familiar with the process when asked by WELT. With the announcement, Graichen addressed the 55 members of the board of the Federal Association of Energy and Water Industries (BDEW).
The ministry would neither confirm nor deny the facts when asked. The representatives of the energy industry also kept a low profile: “BDEW committee meetings are generally not open to the public,” the association explained when asked: “The BDEW therefore does not provide information about the course and content of such meetings and does not comment on any speculation in this regard.”
However, according to WELT information, companies in the energy industry have been preparing for the upcoming alarm level ever since. The federal government has reacted to lower Russian gas supplies since last week. Under the pretext of technical problems, the Gazprom group had reduced deliveries through the important Nord Stream 1 supply pipeline to 40 percent. Economics Minister Robert Habeck (Greens) has been talking about a “serious situation” since then.
The condition for the declaration of the emergency plan’s alert level is the “serious reduction of gas flows” or the “prolonged technical failure of important infrastructures”. The “high risk of long-term undersupply” can also trigger the alert level. These criteria appear to be met. After the alarm level, only the “emergency level” follows, which is declared when there are physical bottlenecks in Germany.
In this case, the market would be suspended. The Federal Network Agency (BNetzA) would then take over the planned economic supply of the individual industries and customer groups according to relevance and need in its role as “federal load distributor”. Because private consumers are considered “particularly protected customers”, this would initially affect the industry.
So far, the alert level has only had consequences within the energy industry. But with the amendment to the Energy Security Act (EnSig) in mid-May, gas suppliers were given “the right to adjust their gas prices to their customers at an appropriate level” as soon as the BNetzA publishes the alarm level in a press release.
Suppliers who are forced to buy expensive natural gas as a substitute due to the failure of Russian deliveries can then pass on their additional costs directly to their customers. The extent of these additional purchases is currently not clear.
It is therefore also uncertain how high the price increase will be after the alarm level has been declared. According to reports, the energy sector, industry and the federal government are still discussing whether another separate regulation from the Ministry of Economics is required to pass on the purchase costs.
It is not entirely clear why the federal government wants to trigger the alert now. Politicians may want to protect consumers from extreme additional payments when they receive their next annual gas bill. Since wholesale gas prices have increased approximately six-fold, consumer advice centers estimate that a three-person household could face an additional payment of EUR 2,000.
Other estimates assume even higher additional payments and correspondingly increasing advance payments. This is likely to overwhelm many private households. The Federation of German Consumer Organizations is already calling for a ban on gas locks for defaulting payers.
Russia had already terminated the supply contracts with its German subsidiary Gazprom Germania after the federal government placed the company under trusteeship. Since then, the federal government has had to buy replacement gas on the market as a trustee so that Gazprom Germania can still service its supply contracts with municipal utilities. In order to protect consumers from the consequences of Gazprom Germania’s insolvency, the federal government has already made a loan of around ten billion euros available to this company alone.
If Moscow escalates the situation with other gas importers as well, this will probably overstrain the possibilities of the development bank KfW or the federal budget. There would then be no alternative to immediately passing on the purchasing costs to the end consumer in order to prevent a cascading collapse of the utility industry.
“Everything on shares” is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.