Germany upbeat on energy security; Russia cuts gas to France

German flag Source: iStock/photosvit

German Chancellor Olaf Scholz said Tuesday that his country is well-prepared to tackle a possible energy shortage because of Russia's squeeze on European gas supplies, even as fears grow about the juggernaut of rising prices that will likely hit consumers across the continent this winter.

He spoke at the start of a two-day government retreat, attended also by Spanish Prime Minister Pedro Sanchez, which was focused on the impacts of Russia's invasion of Ukraine on the energy supply in Europe.

Scholz cited Germany's decisions to reactivate oil and coal-fired power plants, mandate the filling of natural gas storage facilities and lease floating liquefied natural gas terminals. A decision on extending the operating life of Germany's three remaining nuclear power plants is also expected soon.

“All of this and many further measures have contributed to us being in a much better situation as far as supply security is concerned than could have been foreseen a couple of months ago,'' Scholz told reporters at the government's guest house in Meseberg, north of Berlin.

“We will be able to cope quite well with the threats that we face from Russia, which is using gas as part of its strategy in the war against Ukraine.''

Scholz noted that gas storage facilities are already over 80% full, more than they were at this time last year, and the government is expected to agree on a further package of measures in the coming days to help German consumers cope with steeply rising energy prices.

Russia's state-controlled energy company Gazprom further reduced gas deliveries to the French company Engie, raising fears that Moscow might cut off gas completely as political leverage over the war in Ukraine.

Gazprom informed Engie of a reduction in gas deliveries, starting Tuesday, because of ``a disagreement between the parties on the application of several contracts,'' according to the statement from the French energy company. Deliveries for Engie from Gazprom have significantly decreased since Russia invaded Ukraine on Feb. 24, with recent monthly supply of 1.5 TWh, which compares to Engie's total annual supplies in Europe above 400 TWh, the statement said.

Engie had already secured the volumes necessary to meet its commitments to its customers, the statement said, adding that it has also put in place measures to “significantly reduce any direct financial and physical impact'' that could result from Gazprom's interruption in gas supplies.

Russia has cut off or reduced natural gas to a dozen of European Union countries. Since spring, EU leaders have been appealing to the public to use less gas over the summer to build storage winter. The bloc has proposed member states voluntary cut their use by 15 per cent. It's also seeking the power to impose mandatory cuts across the 27-nation bloc if there is risk of severe gas shortage or very high demand.

France, like other European countries, is trying to beef up its gas reserves for winter and fill up its storage by early autumn to avert an economic and political crisis.

Finland, Sweden, Estonia, Latvia, Lithuania, Poland and Denmark aim to increase the capacity for offshore wind seven-fold in the Baltic Sea to just under 20 gigawatts from the current under 3 gigawatts, the Politiken newspaper wrote.

The crisis has prompted some European countries to call for previously shelved energy projects to be revived, such as a gas pipeline linking the Iberian Peninsula and the rest of Europe.

© 2022 The Canadian Press

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