BONN, Germany — The temperature outside Klaus Mueller’s office almost resembles spring, exactly the kind of mild weather that helped Germany get through the winter without Russian natural gas.
But
Germany’s chief utility regulator is not ready to sound the all clear on an energy
crisis spawned by the war in Ukraine, even with natural gas reserves abundant
and prices well down from their peak.
Too much
could go wrong — especially if consumers and companies grow weary of the
conservation habits they learned during a winter fraught with fear of rolling
blackouts and rationing, Mueller, head of the Federal Network Agency, said in
an interview Wednesday with The Associated Press.
Plus,
there’s next winter to think about.
Other
risks, such as a pipeline accident or a sudden cold snap, could set back plans
to keep natural gas storage as full as possible as Europe learns to live
without the cheap Russian gas that fueled its economy for decades.
Mueller
would only concede that he’s “optimistic” this winter will end without a
further gas crunch, especially after Germany cut gas use by 14% in 2022 through
lowering thermostats, switching to other fuels or halting energy-intensive
industrial production. Gas use fell 19% in the last six months across the whole
27-nation European Union.
“But at
the same time, we’re focused already on winter 2023-24, and we know that
Germany, and large parts of Europe, will have to get through the next winter
without Russian pipeline gas,” he said. And “the risks are in plain sight.”
While
he’s thankful for warmer-than-usual winter weather that cut gas use for
heating, “will next winter be so mild? No one can say,” Mueller said.
“Second,
we have to see if the industrial firms and private households are tired of the
efforts related to conservation — or will they redouble their efforts based on
experience thus far? We’re pushing for the second to be the case,” he said.
Mueller
says he hopes the public responds to an approach based on transparency — not
exaggerating risk but not sugarcoating it either. Yet the experience with
measures such as masking and social distancing during the COVID-19 pandemic
show “that always being told what to do is not especially popular.”
Key for
the months and years ahead is a push to use heat pumps instead of gas heating,
still the case in roughly half of German homes. Above all, higher prices will
force homeowners and businesses to adapt simply to lower their costs.
Gas
prices have fallen to under 50 euros ($53) per megawatt hour — the lowest level
in nearly a year and a half — from a record 350 euros per megawatt hour in
August, according to FactSet. But they are still well above the 18 euros per
megawatt hour in March 2021, just before Russia started massing troops on
Ukraine’s border.
Mueller
said it will take six months to a year for lower prices to filter through to
less expensive utility bills for consumers. Asked whether prices two or three
times their pre-crisis level are the “new normal,” Mueller avoided the phrase,
saying there are too many uncertainties that could affect gas prices going
forward.
Mueller,
formerly head of the Federation of German Consumer Organisations and
environment minister from the Greens party in northern Germany’s
Schleswig-Holstein region, took over the network agency in March 2022, just
days after Russia invaded Ukraine on Feb. 24.
Natural
gas prices had already risen on fears of lost supply, although Western
sanctions against Moscow initially spared oil and natural gas. There were
concerns about Europe’s dependency on Russian gas used to heat homes, generate
electricity and fire up industrial processes like making glass and fertilizer.
What
followed was a scramble to find alternative pipeline supplies from friendly
countries like Norway and to line up floating terminals that can import
liquefied natural gas that comes by ship from suppliers including the U.S. and
Qatar.
Russia
had already limited supplies in the run-up to the invasion, leaving storage
low. Then it started cutting back supplies, first to countries that wouldn’t
meet a demand to pay in Russian currency. On Aug. 31, it cut off the major Nord
Stream 1 pipeline to Germany, citing technical problems.
There’s
still a bit of Russian gas — about 7% of supply — flowing to Europe through
Ukraine to Slovakia and via Turkey to Bulgaria.
The race
to find new supplies was expensive — 10 billion euros went toward the floating
terminals, and consumers are seeing painfully higher bills and inflation. But
gas storage was full by December. Drawn down over the winter, storage
facilities will have to be filled again over the summer.
One of
Mueller’s first responsibilities as regulator was overseeing the establishment
of a 24-hour crisis center next to his agency’s skyscraper headquarters in
Bonn, Germany’s capital until the 1999-2000 move to Berlin.
That’s
where the agency would have decided which companies would get priority access
to energy if supplies failed and the government declared a gas emergency. The
center, equipped with diesel generators and stocks of food so it could operate
even in a blackout, never had to be used.
Asked
when he realized Germany had made it through the winter, Mueller said he was
reassured by the full storage levels around Christmas. But complete relief is
yet to come.
“When
it’s really spring here will be the moment when we will have made it,” he said.
“We’re still a couple of weeks away, and I’d rather stay cautious.”
https://apnews.com/article/disaster-planning-and-response-only-on-ap-germany-europe-bonn-13f80cc74fa2969f10d338b746073e8c