Gas prices in Germany surged last month due to Russia’s move to sharply reduce supplies to Germany. Germany, Europe's biggest economy, is witnessing the biggest energy crisis it has faced since the oil price shock of 1973.
So, how is Germany coping with it?
Hot water is being rationed in Germany. Street lights are being dimmed and heated swimming pools are being shut as the country begin to comprehend the energy crunch.
The impact of the energy crunch is being felt in every aspect of national life, be it industry or home, office or wellness centres.
Consumer bills are going through the roof even as gas importers and utility providers are fighting to stay afloat.
“The situation is more than dramatic, Germany’s social peace is in great danger," said Axel Gedaschko, head of the federation of German housing enterprises GdW.
Many fear the situation will get worse as tensions with Russia over Ukraine continue to simmer with no sign of any side backing down.
On Monday (11 July), Russia will shut down its main pipeline to Germany, the Nord Stream 1. Russians say they are shutting it down for 'maintenance'. Many Germans fear it will not be reopened any time soon.
Germany last month took a crucial step towards rationing gas when the nation's Economy Minister, Robert Habeck activated the second stage of the country’s gas emergency plan.
"The situation on the gas market is tense and unfortunately we can’t guarantee that it will not get worse, We have to be prepared for the situation to become critical," he said.
He added that he himself is now taking shorter showers. The Minister has pleaded to the population to save energy. His pleas haven't been unheard.
Two days ago, Vonovia, the country’s largest residential landlord announced that the temperature of its tenants’ gas central heating will be lowered to 17 degree Celsius between 11pm and 6am. An odd time to lower the temperature. The move is expected to save 8 per cent in heating costs.
A housing association near the Czech border is rationing the supply of hot water to its residents. Hot water will only be available between 4am-8am, 11am-1pm and 5pm-9pm.
Many other housing associations are moving in the same direction.
Helmut Dedy, head of the German Association of Towns and Cities, said "Every kilowatt-hour we save helps to fill the gas storage a bit more".
He has pleaded to town councils around the country to take emergency measures. Turn off traffic lights at night; shut off hot water in council buildings, museums and sports centres; adjust air conditioners; and stop illuminating historic buildings, he said.
Many are heeding to his pleas. A district near Frankfurt has switched off hot water in its 86 schools and 60 gyms from mid-September. The measure will save €100,000 in energy costs.
Swimming pools in Dusseldorf are being shut down. Meanwhile, in Berlin, the thermostat on open-air swimming pools is being turned down by 2 degrees.
In Cologne, street lights are being dimmed by 70 per cent.
Wood burning stoves and fireplaces are back in action. Sales of firewood, wood pellets and coal, as well as of gas canisters and cartridges, have witnessed a surge.
According to a report from FT, the GdW has said that the Ukraine war "will push up energy prices for consumers by between 71 per cent and 200 per cent, amounting to additional annual costs of between €1,000 and €2,700 for a one-person household and up to €3,800 for four people, compared with 2021 levels."
Costs might increase even more as a result of a new law working its way through the German parliament.
This law would allow the government to impose an emergency levy on all gas consumers. The purpose is to spread the cost of higher prices more evenly.
"It is designed to prevent gas importers becoming insolvent, a scenario ministers fear could cause a Lehman Brothers-style meltdown of the whole sector. Uniper, the largest importer of Russian gas in Germany, is already in talks with officials on a state bailout that experts say could be as large as €9 billion," the report says.
Consumers in Germany, be it industrial of residential, are all cutting their energy use.
As per a study, industrial gas consumption declined by 11 per cent in March and April this year, compared with the same period in 2021, and by 6 per cent in private households.
“The decline in demand that we’ve seen up until now is unfortunately far from adequate to completely close the supply gap threatening us this winter,” said one of the authors of the study.
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