Germany declares second emergency gas level

The German economy and climate protection ministry declared the second stage of its emergency gas plan on Thursday morning following continued cuts to gas supplies from Russia.

"We have a disruption to the gas supply in Germany, which is why it is necessary to declare this alarm level," economy and climate protection minister Robert Habeck said.

Russian gas supplies through the Nord Stream pipeline were first disrupted on 14 June and two days later were further reduced to 40pc of maximum capacity. If flows continue at this reduced level, lifting stocks to 90pc of capacity by December "can hardly be achieved", the minister warned. Aggregate German inventories were at 58.7pc of capacity on Wednesday morning, according to data from the GIE transparency platform.

Supply security in Germany is still guaranteed but this should not give the country "a false sense of security", the minister warned. "What needs to alarm us is the perspective of not having enough gas during the winter," Habeck said.

Gas flows will be further reduced when Nord Stream undergoes annual maintenance on 11–21 July, Habeck added.

"Gas is now a scarce commodity," the minister said. "Prices are already high and we must brace ourselves for further increases."

The government has now called on operators of coal-fired power plants to prepare those units — as set out under the gas replacement act — for a return from standby in order to reduce gas consumption in the power sector. The legislation is in the parliamentary process but should be enacted on 8 July, after which the power plants can be brought into the market.

But the government will not yet make use of the so-called price adjustment mechanism under the energy security act, which would allow energy suppliers to pass on any price increases to end consumers.

"This mechanism may be necessary in certain situations to prevent the energy supply from collapsing," Habeck said. "But it also has its downsides, so we're also working on alternative concepts."

By Florence Schmit