Will Europeans freeze this winter? And how much will you have to pay for heating? In Russia, the media has long been writing about the emerging gas shortage in Europe. But what is the truth? Is it an unpleasant winter?
In Russia, Gazprom’s homeland, the media has long been writing about the emerging gas shortage in Europe, and the image of “freezing Germany” has become popular on Russian social media. But what is the real situation and is it really an unpleasant winter for households in the European Union (EU)?
How much gas does Germany have? And the other countries?
Let’s look first at the EU’s gas storage facilities. Are they really almost empty on the eve of winter? Agence France-Presse (AFP) reported, citing the Association of European Gas Infrastructure Operators (GIE) in Brusselsthat by 20 September 2021 EU gas storage facilities are up to around 71% full. This is significantly less than in previous years, when they were filled to 90 percent or more, but still shows that some formulations in the media for “empty” or “half-empty” gas storage facilities still do not correspond to the truth, writes “Deutsche Welle“.
V Germany, which consumes, imports and stores the largest volumes of natural gas in the EU, storage facilities are filled to an average of up to 64%. As the differences in the stored volumes are significant. In Reden – the largest gas storage facility in Germany and in the entire EU – only 5% of the usual volumes remain available. Sebastian Bleschke, executive director of the German Association of Gas Storage Operators (INES), had said that a year ago the same storage was up to 87% full.
The Reden gas storage facility belongs to Gazprom and is connected to the Nord Stream gas pipeline via the North German gas pipeline (NEL), leading from Lubmin near the Baltic Sea to Reden in the state of Lower Saxony. This intermediate gas pipeline, about 440 kilometers long, is also under the control of the Russian company. In other words, the Reden underground storage facility is virtually entirely dependent on Russian gas supplies, and they are currently running particularly slowly.
All this raises the suspicion that in order to fulfill its contractual obligations to European customers, Gazprom has been purposefully selling off gas from its reserves in the EU throughout the summer in order to create an artificial deficit in the autumn to raise prices and put pressure on over Berlin and Brussels to give a quick and unconditional permit for the operation of Nord Stream 2. And that would run counter to the requirements of the EU’s Third Energy Pact.
Germany may experience a shortage of natural gas in January-February 2022, but the available reserves of about 70% are likely to reach the end of winter, unless it turns out to be particularly harsh and icy. Even if Russia fulfills its contractual obligations to a minimum, Norway would be able to increase the quantities delivered. Demand in Bulgaria, Italy and Greece could be met by gas from Azerbaijan arriving via the TAP pipeline. There are other alternatives, such as supplies of compressed natural gas (CNG) from the United States and a number of African countries.
Prices in Germany are rising
The prospect of gas shortages, which so far is only hypothetical, has nevertheless caused unprecedented price increases in a number of European countries. In Germany, average gas prices for end customers have already risen by an average of 11% to 13%, according to the Verivox portal. For an average household, this means an increase in heating costs by an average of around € 191 per year or € 16 per month.
Again, according to Verivox, electricity in Germany has risen in price over the past 12 months by an average of 5.7%. However, households in Germany have the right to freely switch their gas and electricity suppliers, which creates significantly higher competition between companies and to some extent restrains the growth of prices in this area. It is important to know something else: more than half of the final price of electricity for consumers consists of various fees, taxes and deductions. So in the event of an extreme situation, the German government can always use these instruments to sharply reduce electricity prices by temporarily waiving certain fees. A similar measure has been implemented, for example, in Spain as well as in Berlin as part of anti-crisis measures against the pandemic.
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