Network Agency in Germany warns of the failure of hundreds of thousands of gas boilers

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The Federal Network Agency has specified what happens in the event of a regional gas shortage.  The Association of Cities calls for state aid for municipal utilities, Robert Habeck speaks of a “quasi-economic warfare dispute”.

The President of the Federal Network Agency, Klaus Müller, warns of permanent consequences for private natural gas consumers if there is a local gas shortage during the energy crisis.

“The moment the pressure in the gas network in a region falls below a certain minimum, the fuse in hundreds of thousands of gas boilers would suddenly kick in”, Müller told the newspapers of the Funke media group.

“They would have to be manually activated again by trained specialists if gas was available in the region again.  Nobody can wish for such a scenario because it would take a very long time to restore the gas supply.”

It will therefore always be the goal of the Federal Network Agency to order reductions in industrial consumption if necessary, said Müller, “so that this scenario does not occur”.  Almost every second of the approximately 43 million homes in Germany is being heated with gas.

According to the head of the Network Agency, the gas flows in Germany are currently more or less evenly distributed.  “That could change if we only receive gas from Norway, the Netherlands or Belgium.”

Therefore, the reservoirs are already being filled so that the south can also be adequately supplied.  “For example, we are currently not only focusing on the largest German storage facility in Rehden in Lower Saxony, but also on the storage facility in Wolfersberg in Bavaria”,  said Müller.

The reservoirs are crucial to prevent the shortage scenario described in an emergency situation.  On average, the gas storage facilities are currently a good 61 percent full; However, as a result of the reduced gas supplies from Russia, the levels are only rising slowly.

“Swimming pools probably do not belong in the critical area, just like the production of chocolate biscuits.”

Klaus Müller on possible restrictions in the event of a gas shortage

And while some reservoirs are more than 90 percent utilized, in North-West Europe's largest storage facility in Rehden, it is only 21 percent - and in Wolfersberg only 12 percent, according to data from the network operator association, Gas Infrastructure Europe.  The federal government is now providing 15 billion euros so that the fuel can be purchased and stored.

Nevertheless, Müller is not sure that it will be possible to fill the storage tanks to the targeted average level of 90 percent before winter.  “If the gas flow from Russia is reduced for a longer period of time for political reasons in the course of maintenance, we have to talk more seriously about savings.”

In a gas shortage, “products and offers that fall into the leisure and well-being area would be of secondary importance,” says Müller.  “Swimming pools probably do not belong to the critical area, just like the production of chocolate biscuits.”

 Association of Cities calls for state aid for municipal utilities

There is growing concern in the municipalities that municipal utilities will get into commercial difficulties in view of the high gas prices - and that security of supply would be endangered as a result.  “The pressure on the public utilities is increasing every day," said the general manager of the German Association of Cities, Helmut Dedy, the German Press Agency.

If the public utilities were to pass on the sharply rising purchase prices, many households would be overwhelmed by the costs.  On the other hand, if the municipal utilities did not pass on the prices, many could slide into bankruptcy, said Dedy.  “The supply of many households would no longer be secure.”

The federal government must therefore immediately put the municipal suppliers under the protective umbrella for companies.  To do this, the state must quickly grant liquidity support to affected municipal utilities through guarantees and loans - and initiate an insolvency moratorium in the short term in order to suspend the obligation to file for insolvency.

Municipal utilities operate the basic supply of the population at the local level: for example with energy, but also with services such as local public transport, waste and sewage disposal or the operation of swimming pools.

Federal Economics, Minister Robert Habeck warned of a "price explosion" for gas if there were a total failure in Russian supplies.

Annual maintenance work on the Nord Stream 1 Baltic Sea pipeline, which usually lasts ten days, begins on July 11.  Then there will be no gas flows through the line.  Whether Russia will open the gas tap again after the maintenance is uncertain.

“Quasi-economic warfare dispute”

In order to assess the risk, one would have to be able to look into the head of Russian President, Vladimir Putin, Habeck said on Saturday evening at an event of "Zeit".  “But you see a pattern and that can lead to this scenario”.  One is dealing with “a quasi-economic warfare dispute”.

With a view to suppliers such as Uniper, Germany's largest gas importer, which has fallen on hard times, Habeck said: The companies that have imported a lot of Russian gas "have a real problem".  They would have to fulfil their supply contracts with public utilities, for example, and buy much more expensive gas elsewhere.

There are two options: Either the state supports the companies with tax money. “Or the companies are allowed to pass on the prices.”  Habeck has not activated Paragraph 24 of the Energy Security Act, which would allow companies to do this regardless of price guarantees.  The government is currently favoring other options to save Uniper and other utilities.