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The association of German utilities is calling on the federal government to create a system for early warning about a potential drop in gas supply, noting that there are “serious indications that the gas supply situation is about to deteriorate.”
Germany depends on Russian gas for around half of its needs, with many industries using gas and about half of all households heating with gas. The Russian war in Ukraine exposed Germany’s—and Europe’s—vulnerable reliance on gas and other energy flows from Russia. Europe has been reluctant to impose an embargo or sanctions on Russian energy because of its high dependence on supply from Moscow.
In the wake of the Russian invasion of Ukraine, Germany announced it was changing course “in order to eliminate our dependence on imports from individual energy suppliers,” German Chancellor Olaf Scholz said. Germany will build two LNG import facilities, at Brunsbuettel and Wilhelmshaven, and look to speed up the installation of renewable energy capacity to have 100-percent renewable power generation by 2035.
However, unplugging the German energy system from its dependence on Russia will not happen overnight, Chancellor Scholz has said several times over the past weeks, warning that a halt of Russian energy supply would plunge Europe and Germany into a deep recession.
Now the association of the German utilities, BDEW, said that an early warning system is needed as “There are concrete and serious indications that the gas supply situation is about to deteriorate,” Kerstin Andreae, chairwoman of the BDEW Executive Board, said on Thursday.
Following Vladimir Putin’s announcement that future gas deliveries will have to be paid for in Russian rubles, the German association cannot rule out an impact on gas flows, Andreae added.
On Wednesday, Putin said that Russia would start charging the countries it considers “hostile” in rubles for its natural gas.
“I have taken a decision to switch to ruble payments for our natural gas supplies to the so-called hostile states, stop using the compromised currencies in such transactions,” Putin said.
The Russian President—whose list of “hostile” states includes the United States, all EU member states, Switzerland, Canada, Norway, South Korea, Japan, and many others—has ordered the Bank of Russia, the central bank, to develop a system for payments in rubles within a week.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.