Natural gas supply: Industry in concern

Everyone is afraid that there will be no gas: consumers as well as corporations and medium-sized companies. Concerns have increased in recent days because Russia has cut gas supplies. Federal Minister of Economics Robert Habeck (Greens) now wants to take measures to save gas. The minister announced at the weekend that consumption in the electricity sector and in industry should be reduced and the storage tanks should be filled more quickly.

For months, companies and their lobbyists have been warning of a gas embargo against Russia because of the war of aggression in Ukraine. So far, that hasn’t happened – but when Russia cuts supplies, the effect is similar: there is a lack of gas.

The hesitant implementation of a “half-hearted oil embargo” gives Russia the opportunity to put pressure on the West, despite declining revenues, commented Karl Haeusgen, President of the German Engineering Federation VDMA, on the latest developments on Sunday. “We are moving towards a very difficult situation.” It is therefore right to organize lower gas consumption now. “We particularly support the plan to encourage reduced gas consumption in industry through tenders. This directs the reduction to where the least damage occurs,” says Haeusgen.

According to Habeck’s plans, such an auction model should start in the summer. It is intended for use in the event of supply bottlenecks and is supposed to work like this: If industrial customers forgo agreed delivery quantities, they are bought back by the so-called market area manager, the company Trading Hub Europe – within a price range that is determined with the Federal Network Agency. Storage tanks could then be filled with the gas, for example. “Everything that we consume less helps. Industry is a key factor here,” said Habeck.

The possible intervention in power generation is effective but very sensitive, Haeusgen said. In the short term, more coal-fired electricity from reserve power plants could help, “but the climate transformation goals must not be lost sight of.” This included investments in hydrogen-capable reserve power plants and a significantly faster expansion of renewable energies. Just like the generation of electricity, the production of heat in industry must also be secured for as long as possible, which is why gas-fired power plants in combined heat and power generation should be considered separately.

“The issue of gas deliveries from Russia worries us,” says Wacker Chemie. The group has been working for some time on “various scenarios to get by with less gas in production.” The supply of raw materials is secured at high prices. For raw materials and energy, the group expects additional costs of around 1.1 billion euros this year compared to the previous year. The chemical industry is considered to be particularly energy-intensive, but it also needs natural gas as a raw material. BASF did not want to comment on the planned measures on Sunday. A spokeswoman said that the industry association VCI is in ongoing contact with the Ministry of Economic Affairs about the potential for savings when using natural gas.

Germany must now “quickly and pragmatically” use all opportunities to save gas where it can be replaced, said VCI general manager Wolfgang Große Entrup according to the announcement. Especially when switching from gas to coal, all capacities should be able to be used without discrimination. Große Entrup welcomed Habeck’s announced gas auction model to save on industrial gas as a “market economy instrument”.

According to the association, the further reduction in gas supplies from Russia via the Nord Stream 1 pipeline will not yet lead to acute supply problems in the chemical-pharmaceutical industry. With a share of 15 percent, the industry is the largest consumer of natural gas in Germany. The industry requires around 135 terawatt hours of gas a year, 100 of which as an energy source. Only one to two terawatt hours can be saved by using alternative fuels.

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