It’s a nightmare scenario — and it’s also a very real possibility, given German dependence on Russian gas and Russian President Vladimir Putin’s repeated reminders of the leverage his country holds when it comes to energy. German officials and many German citizens are imagining — and planning for — the worst.
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It’s a scenario that policymakers from Berlin to Brussels and beyond are racing to avoid. Germany is ground zero for these worries, given its dependency on Russia and the Nord Stream 1 pipeline.
“There are a lot of moving parts. It depends on what Russia does, it depends on winter, on how bad it is, and it depends on demand,” Timothy Ash, a senior strategist at the London-based financial services firm Bluebay Asset Management, told Grid. “It’s touch and go, put it that way. It looks like it is going to be a very difficult winter.”
The consequences could stretch well beyond energy. Europe has surprised many observers with its reaction to the invasion of Ukraine, implementing far-reaching economic sanctions on Russia, and sending billions of dollars in military and financial aid to the Ukrainian resistance — and doing so despite its long-standing dependence on Russian oil and gas. Perhaps the greatest surprise came from Germany in late February, when newly minted Chancellor Olaf Scholz proclaimed a “turning point” for his country’s foreign policy, tearing up prohibitions dating to World War II and shipping weapons to Ukraine.
“I think he will be looking for some kind of peace deal this autumn, and to prepare Europe for that he’ll probably further restrict energy supplies to create a gas crisis this winter, so Europe will try and force Ukraine to concede ground,” Ash said. “We have to assume Putin will be a bad guy.”
Preparing for the nightmare
That’s the bad news. The good news is that Germany — and the continent as whole — isn’t waiting for the nightmares to come. There are already several measures underway that would put Germany and other nations on a stronger footing before the weather turns. These involve boosting gas reserves, turning to available alternative energy sources, and imposing energy rations on businesses and individuals both. Some of these measures appear to be working.
But questions remain about whether the resolve will last, as Russia is currently supplying only about 20 percent of what it normally does through the Nord Stream pipeline. Moscow has blamed the reduction on maintenance issues caused by Western sanctions; the flow could decrease further later this month when Russia says it will shut the pipeline completely for three days — again, it says, for maintenance. The result: German regulators are warning that they might not meet their next goal of bringing storage levels to 85 percent by October and 95 percent by early November.
Still, the progress thus far has impressed many experts. “I think Germans should be concerned but not panicked,” Noah Gordon, a fellow in the Europe program at the Carnegie Endowment for International Peace, told Grid. “Fears of people freezing in their homes because of a lack of gas are overblown. … It’s a crisis, but it is not the end of the world.”
Meanwhile, the war has actually driven usage down by driving up energy bills. That has led many Germans to use less power — even where there are no government mandates or restrictions. And that has helped — both by moving Germany more swiftly toward its overall targets and by boosting storage levels.
“It now seems like price rises have actually reduced demand,” Ash, from Bluebay Asset Management, told Grid. “So now it’s looking a bit better.”
A comeback for coal
Now, some lawmakers are also looking at extending the life of the last of its nuclear reactors. Germany’s last three nuclear facilities are currently slated to shut down by the end of this year; former chancellor Angela Merkel pledged to phase out nuclear power following the 2011 meltdown at the Fukushima nuclear plant in Japan. But with a potential energy crisis looming, nuclear power — much like coal — is back in the conversation.
Energy wars — and the actual war
Critical questions remain — nearly all of them hinging on exactly how far Russia goes in using its leverage. As Ash told Grid, if supplies from Russia continue to fall, and the winter proves harsher than anticipated, “then I think Europe has more problems.”
“The great uncertainty is whether Russia will cut off all gas supplies or whether it will continue to just constrict them over time,” David Goldwyn, a former State Department coordinator for international energy affairs, told Grid.
The worst-case scenarios — a shutdown of Russian supplies and a particularly harsh winter — have led to concerns beyond the energy supply itself. In particular, the question of when and whether an energy crisis might affect German support for Ukraine.
“German and European support for Ukraine has really remained remarkably high considering the slowdown in economic growth and the historic spike in energy prices they are already suffering,” Goldwyn told Grid. He believes the support is strong enough to withstand whatever winter might bring. “Frankly, the more hostile or the more aggressive Russia is with respect to using energy as a weapon,” Goldwyn said, “I think the more popular support there is in Europe for the defense of Ukraine, because it is not solely about protecting Ukrainians, it’s about deterring the Russian threat, which can clearly be aimed and has been aimed at other countries.”
Gordon, from the Carnegie Endowment, is also optimistic, though there might be “some more grumbling,” as he put it. “People’s attention does go away … and a lot of the high price of gas has not yet been passed through to consumers because they fixed prices and then the meter gets read at the end of the year,” he told Grid. “There will be some shock when people get their bills.” What helps, Gordon believes, is the solidarity with Ukraine that many Germans feel because of their proximity to the war zone. “It really feels close when you are in Berlin,” Gordon said. “Support for Ukraine will remain high if the government can make sure that the higher cost of energy is spread around.”
“Ultimately what we’d all agree on is that Russia is not a reliable energy partner anymore for Europe,” Ash told Grid. “Europe will diversify; Russia will be cut out of European supply chains. But we still have to get through this winter, and it is going to be hard.”
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