5. April 2022 By Stephen Lorenzen, Georg Benhöfer and Lars Zimmermann
‘Emergency Plan for Gas’ – Robert Habeck declares early warning level
Robert Habeck, German Federal Minister for Economic Affairs and Climate Action, declared the early warning level of the Emergency Plan for Gas on 30 March 2022. In this blog post, we’d like to inform you of what this means for the security of supply in our country, what effects it can have on industry as well as private households, what the plan actually is and what processes it entails.
The natural gas supply situation in Germany is highly secure and reliable. In particular, this concerns supplying ‘protected customers’, for example, private households, which are of particular significance in the SoS Regulation (European Regulation on the Security of Gas Supply – Europäische Verordnung zur Versorgungssicherheit Gas, SoS-VO). Nevertheless, as in every other energy sector, it cannot be completely ruled out that in the event of a serious deterioration in the supply situation, intervention by the competent authorities will be necessary in addition to the measures taken by the gas supply companies (specifically, market-based measures and, if necessary, measures pursuant to Section 16(2) EnWG [German Energy Industry Act – Energiewirtschaftsgesetz]). Although the likelihood of such a severe supply crisis occurring is very low, provisions must nevertheless be made for such an event in order to ensure that all parties involved cooperate as necessary and that the appropriate measures are available. In light of the war in Ukraine, it’s now necessary for the competent authorities to intercede.
What is the Emergency Plan for Gas?
The ‘Emergency Plan for Gas for the Federal Republic of Germany’ deals with various scenarios and possible courses of action in the event that supplying the country with natural gas can no longer be guaranteed in an unrestricted manner. This serves to ensure the security of the gas supply in order to strengthen the internal gas market and make provisions for the event of a supply crisis.
The Emergency Plan has different warning levels before an emergency occurs, up to the scenario of a complete gas import failure. This enables the German federal government, states and authorities to know which steps must be taken as soon as one of these levels is reached.
Level 1: Early warning level
At this level, the Gas Emergency Plan calls for a crisis team to convene. This team is comprised of experts from the various ministries and employees of the relevant energy suppliers. At this level, the experts explain the current situation to the German federal government. This includes consumption data and the storage inventory in particular. The Federal Minister for Economics and Climate Protection triggers this level so that the measures described take effect immediately.
Level 2: Alert level
At level two, the German federal government obligates the energy suppliers to take the necessary steps. These steps include measures such as feeding natural gas from the storage facilities into the system and purchasing gas from alternative sources.
Level 3: Emergency level
At level three, intervention by the German federal government becomes inevitable. The private sector cannot achieve the desired goal using their measures, so now the German Federal Network Agency (Bundesnetzagentur, BNetzA) must intervene. It decides who will continue to be supplied with gas and who will not. Therefore, in this scenario, how gas is distributed is solely determined by the BNetzA.
Impact on industry and private households
The Gas Emergency Plan prioritises businesses that need protection. This means that in an emergency, the BNetzA gives priority to these recipients and supplies them with gas. These protected companies include German federal authorities that are necessary for public security and for the state apparatus to function properly. This also includes hospitals and companies that constitute critical infrastructure. German private households are also included and would continue to be supplied with gas in the event of an emergency. Industry and private companies, on the other hand, are not included. If level three is triggered, they are then no longer supplied with gas.
What does this all mean in terms of security of supply?
The Federal Ministry for Economic Affairs and Climate Protection stated in its press release from 30 March 2022: ‘The security of supply continues to be guaranteed. There are currently no supply shortages.’ (Press release from the BMWI [Federal Ministry of Economics and Energy – Bundesministerium für Wirtschaft und Energie])
Nevertheless, given the current situation in Europe, precautionary measures must be increased in order to be able to act quickly should Russia escalate matters. Should the supply become restricted or even disrupted, additional steps must be taken to ensure the security of supply in the medium term.
As the early warning level has been declared in Germany, it should be specifically ensured that
- 1. the affected companies prepare themselves for the current situation in order to contribute to crisis preparedness,
- 2. the affected institutions prepare themselves for a possible suspension of deliveries so that severe consequences can be mitigated and
- 3. the gas network operators and gas supply companies have a legally secure basis that can justify the measures to be taken in an emergency.
The overall supply to all German gas consumers is currently still guaranteed. This applies to household customers and social services, such as hospitals, as well as to district heating providers, electricity generation plants and the German economy. There’s still a sufficient amount of gas on the commercial market despite massive price fluctuations. Should level two or even level three occur, this situation may change. While affected companies and institutions can already take preparatory measures, end consumers can also rethink their energy consumption habits and thereby play a small part in making the occurrence of level three less likely, or at least in delaying it. Let’s get our woollen jumpers out of the cupboard, make ourselves a cup of tea and continue to attentively watch the situation.
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