German Industry Looks for Exemptions as Gas Rationing Looms Large
- August 10, 2022
- Posted by: Quatro Strategies
- Category: Energy
Bundesnetzagentur, Germany’s network regulator, which would be in charge of gas rationing in the event of a supply emergency, has received exemption requests from across industry. The requests show the German industry’s fears of production cuts and losses in case of a rationing measure. Germany is at phase two of a three-stage emergency plan following a reduction in gas flows from Russia. Stage three would be a rationing of gas, which would be a major problem for industry, considering it accounts for a quarter of the country’s gas demand.
Chancellor Scholz said on Tuesday that he didn’t expect soaring gas prices to come down as quickly, as governments across the world see natural gas as a transitory fuel on their decarbonization path.
As the industry and regulators are scrambling to work out a plan in case rationing kicks in, individual sectors have been asking for leniency and some companies have even started changing work practices to reduce energy consumption.
However, the regulator said blanket exemptions are not provided for in the current law. Still, it added that it maintained dialogue with industry to prepare for a gas supply emergency.
Big gas consuming sectors that have raised their voices publicly are the glass, steel, pharmaceutical and chemical industries.
Around 120 of Bundesnetzagentur’s staff are working on crisis prevention and management.
Nord Stream 1, which normally carries one third of Russian gas exports to Europe, has been flowing at 20% capacity. Russia blames technical issues emanated from Western sanctions for the cut-off, while the EU thinks it is political.
German network regulator said it is trying to put together a shutdown list for industry based on six criteria, which include a company’s size, economic damage as well as costs and how long it would take to restart specific facilities.
When it comes to the crunch, private households will have some but not all-encompassing priority over industry, while hospitals, care facilities and other public sector institutions with special needs would be last to be disrupted.
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