Upper house

Germany announces moves to increase gas storage as Russia cuts supply

Gas flames from a stove are pictured at a private house in Bad Honnef near Bonn, Germany March 30, 2022. REUTERS/Wolfgang Rattay/File Photo

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  • KfW to provide 15 billion euros in credit to fill gas storage – source
  • Set up an auction system to reduce industrial gas consumption
  • Coal plants could add 10 GW of capacity
  • Discussions around the second level of crisis underway – sources

FRANKFURT, June 19 (Reuters) – Germany announced its latest moves on Sunday to boost gas storage levels to prepare for the upcoming winter season amid fears that Russia, which has cut deliveries in recent days, reduce or even completely interrupt supplies.

Following Russia’s invasion of Ukraine, Germany, which depends on Moscow for most of its gas, is seeking to fill its gas storage facilities and phase out Russian energy imports.

Germany’s economy ministry said the new measures would include increased reliance on coal-fired power plants as well as an auction system starting in the coming weeks to incentivize industry to consume less. Read more

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It also includes 15 billion euros ($15.8 billion) in credit lines for German gas market operator, through public lender KfW (KFW.UL), to fill gas storage facilities faster. gas, said a government source, asking not to be named.

Economy Minister Robert Habeck said that depending on the situation, the ministry, which is in charge of the security of energy supply in Europe’s largest economy, will take additional measures.

Two people familiar with the matter, speaking on condition of anonymity, said this could include the launch of the second phase of Germany’s gas emergency plan.

The second phase, which starts when there is a high risk of a long-term shortage of gas supply, would allow utilities to pass on high gas prices to customers and thus help reduce demand. Read more

The German chemical industry association VCI, which represents the sector most at risk from gas supply cuts, said the cut in supplies had not yet caused acute problems.


The measures announced on Sunday follow a package unveiled earlier this year to provide German energy companies and the economy with support payments to manage the Ukraine crisis, which has led to soaring electricity costs.

“The tense situation and high prices are a direct consequence of (Russian President Vladimir) Putin’s war of aggression against Ukraine,” Habeck said in a statement.

“Also, it’s obviously Putin’s strategy to make us uncertain, drive up prices and divide us. We won’t let that happen. We will fight back decisively, precisely and thoughtfully.”

The Economy Ministry said bringing coal-fired power plants back into the mix could add up to 10 gigawatts of capacity in the event of a critical gas supply situation, adding that a corresponding law would be submitted to the chamber. high of Parliament on July 8.

“It’s painful, but it’s a pure necessity in this situation to reduce gas consumption,” said Habeck, a Green Party member who has pushed for a faster exit from carbon-intensive coal.

“But if we don’t, we run the risk that the storage facilities will not be full enough at the end of the year towards the winter season. And then we are blackmailed at the political level.”

Germany is targeting storage levels of 80% by October and 90% by November.

Data from Gas Infrastructure Europe shows German gas storage levels were 57.03% as of June 17, down from 29.69% on February 24, the day Russia invaded Ukraine.

($1 = 0.9526 euros)

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Reporting by Christoph Steitz and Andreas Rinke; edited by Barbara Lewis

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