The Need to Revisit Germany’s Plans for Energy Security

The Need to Revisit Germany’s Plans for Energy Security

When Russian troops started a military invasion of Ukraine on the 22nd of February 2022, the world stood still and watched. Within a short time, the Ukrainian government mobilized its military troops and its nation and turned them into a force of resistance, hoping for international support. However, Ukraine until today is not a member of the European Union (EU) and is therefore unable to benefit from the EU Lisbon Treaty’s mutual defense clause [Article 42(7)].

Yet, the quick, supportive international response speaks for itself: immediate UN, NATO, and EU crisis meetings, global demonstration, weapon support, and sanction mechanism toward Russian economic welfare and its regime. Especially, sanctions including the ban on all Russian transport, the technology sector and the financial institutions, the freezing of international assets to exclusion of banks from the Swift financial communication system. While more sanctions against Russia and against Ukrainian separatist regions come into focus, the topic of energy access and supply comes front and center. The US already banned any import of Russian coal, oil, and gas, and now focuses on the acceleration of its own national production. It becomes clear that in the short- to mid-term, Europe, especially Germany, will not be able to follow the US lead. And dependency is why.

The Effects of the Ukraine Crisis on Energy Policy and Practices:

Germany is at the forefront of criticizing and sanctioning Russia’s invasion, delivering weapon support and shelter opportunities for refugees as well as stopping Nord Stream 2, an important gas pipeline project with Russia. However, an immediate boycott of Russian energy deliveries is not a realizable scenario.

The global rise in energy prices and logistic costs, triggered by the war, can already be felt: The price for diesel fuel has exceeded 2€/L diesel for the first time in Germany. As chancellor Scholz stresses himself, Germany is, and stays, highly dependent on Russian imports of gas, crude oil, and hard coal. Respectively, they account for about 40%, 35%, and 50% of the country’s overall yearly consumption.

Russia’s current threat to stopping these energy supplies, made Germany’s government realize the country’s need to accelerate its efforts in establishing a new energy policy. The primary focus will be on speeding up the renewable energy transition to counteract any mid-to long-term dependencies. One example is a new law directive introduced on the 1st of May, to respond accurately to the energy storage issue: Leaning on past assessments and forecast of longevity of energy storage of gas and coal, Germany wants to introduce a binding tank reserve level, rather than leaving this decision to the companies themselves. Currently, there are no strategic reserve requirements for gas and coal in Germany. Therefore, it is up to companies to decide on their yearly reserves. Habeck, Germany’s Economic Affairs and Climate Action Minister, requests a mandatory level for storage facilities of a minimum of 90% in winter times.

Securing energy supplies is becoming Germany’s top priority. Habeck, therefore, is assessing all considerable options. Such options include the prolonging of Germany’s coal-fired power plants. Although the phase-out of coal is already deeply embedded in Germany’s Net Zero strategy (with a targeted phase-out in 2038), concerns on short-, to mid-term energy security are now calling this ambition into question. Thus, to meet energy demands, the government considers increasing coal consumption within the next years and therefore putting the timely phase out plan at risk. Also, the postponement of the government’s nuclear phase-out plan is currently under discussion (which was to be completed by 2022, while three nuclear power plants are yet in operation).

Further, the government announced a strategic rollout of a new energy stream, the vast import of liquified natural gas (LNG). For this purpose, a new LNG terminal will be built in Northern Germany and will have a regasification capacity of eight billion cubic meters per year. While the establishment of the terminal is already time-intense, the current distribution infrastructure is not tailored for a significant shift to LNG, making the delivery to end-users difficult. Also, these endeavors are coming with environmental hazards: LNG production and storage can be environmentally harmful and come with high carbon intensity. Therefore, it raises questions about the fuel’s suitability as a long-term energy stream on the path to Net Zero.

Also, new energy streams to replace Russian energy supplies in the mid-to long-term are currently being explored through the development of new partnerships. The Economic Affairs and Climate Action Ministry is looking into buying more gas from other countries, especially the Middle East. It recently announced a new long-term energy partnership with oil mogul Qatar, including supplies of LNG and renewable energy.

The Effect of the Crisis on Efforts by Germany to Promote or Implement Climate Policies

Germany’s climate policies seem to be currently under siege with awareness of the need to meet the country’s immediate demand for energy that has been exacerbated due to the Russia/Ukraine crisis and the pandemic.

On the one hand, Christian Linder, Germany’s finance minister, just announced 200-billion-euro funding until 2026 for renewable energy expansion and transition technologies. Among others, the funding aims to rapidly expand hydrogen production, e-car charging infrastructure and general scale-up of renewable power sources. Further, a set of laws is said to come into force by July, to mobilize the goal of an exclusive electricity supply from renewable sources by 2035.

On the other hand, the serious consideration of a delay in coal phase-out plans, or even a coal comeback, is putting the spotlight on the risk of shifting away from the country’s committed Net Zero plan. And this plan comes with a timeline, which is already extremely tight. Even before the Russian invasion of Ukraine, the consumption of coal increased massively, as the surging post-pandemic economic recovery led to high power demand in Europe. Until now, renewables are unable to meet the power demands and such energy upswings. It seems obvious that the climate strategies to lower dependency on countries like Russia and the policy measures countries need to take to reduce emissions are alike. It remains to be seen how Germany’s road to energy independence and Net Zero adjustments evolves.

The Effect of the Crisis on the Climate Progress Indicators

The overall amount of GHG emissions

The overall GHG emission will likely increase, especially in the energy- and transport sector (Though, this will only be validated once the GHG tracking for the specific sectors is accessible for this specific period).

Number of Hybrid Plug-In Electric Vehicles

As supply chains are globally interrupted through the war, strong delays in production and delivery are highly likeable, strongly affecting the sales market (on this note, the demand of EVs might increase, as the current dependency on fuel for cars might motivate common car drivers to switch their diesel cars to EVs).

Gross Amount of Renewable Energy Usage in Electricity Consumptions[1]

As current energy demand is high this could also affect the energy demand coming from RE (though, this will only be validated once the RE usage is accessible for this specific period).

CO2 Price Increase for Transport and Buildings

Not currently influenced.

Generally, military conflicts cause more mortality and disability than any major disease. We could take countless examples from Vietnam to Iraq to both World Wars of our history and accumulate the number of deaths and disasters they had caused to humanity and its environment.

If we relate the current war to the oil crisis in 1974, 1979, and 1980, we see how the dramatic and sudden energy shortages can affect developed economies and what long-term impact it had on people’s health and security. On the other hand, if we look at the recent COVID-19 crisis, which impacted the whole world, major shifts in people’s mind toward environmental consciousness and biodiversity protection took place. The clean- and climate tech investment space saw a major boost in financial backing with the whole investment industry fundamentally shifting its importance towards this space. This should not mean that it should take wars and conflict to create a shift away from the status quo. It should not need devastating horror, death, and military destruction to refocus on the essence of importance. It is common sense that wars have been, and are leading, to horrible devastation, hardly reversible.

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This Post was submitted by Climate Scorecard Germany Country Manager Cimberley Gross


[1] Gross electricity consumption comprises the final energy consumption of electricity, as well as the associated conversion and transmission losses. It is defined as a reference value for the share of renewable energies according to the energy concept and in EC Directive 2009/28/EC on the promotion of the use of energy from renewable sources and, along with the consumption of heat and fuels, is an important component of final energy consumption- Federal Environmental Agency

Image Copyrights © Anton Vaganov/​Reuters and © Julian Stratenschulte /dpa


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