Less and less gas is coming from Russia to Germany. Federal Minister of Economics Robert Habeck therefore announced the second stage of the gas emergency plan on Thursday. But what does that mean for consumers? The fact is: it will still be expensive.
The Nord Stream 1 gas pipeline between Russia and Germany is increasingly coming to a standstill. At the beginning of the year, more than 1,100 million cubic meters of gas flowed through the tube every day, but now it’s barely half that. Federal Economics Minister Robert Habeck appealed to consumers and companies to save gas. With a view to the imminent costs that German citizens will have to face, this is good advice. Because gas is getting more and more expensive.
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Experts expect cost increases, which in the end will hit the consumer hardest. With the gas warning level 2 recently activated by Habeck, the foundation has been laid for gas suppliers to soon be able to adjust the conditions. Price guarantees become obsolete, prices can easily be increased and the consumer has to pay.
When it comes to the nation’s gas situation, Habeck becomes clear: “Putin is using the gas supplies as a weapon against Germany,” he said. There is a disruption in the gas supply in Germany. “This is an economic attack by Russia.”
And the minister formulates the consequences of this just as clearly: “Prices are already high and we have to brace ourselves for further increases.” Around 60 percent less gas is being pumped through Nord Stream 1. The filling level of the German gas storage facilities is also currently around 60 percent. A good starting position, but still a long way from the 90 percent target in autumn.
Consumers have to be prepared for the fact that the electricity producers will make the so-called “price adjustment clause” effective and pass on price increases directly to the customer. This also means that tariffs are subject to change. However, the Federal Minister of Economics still has to agree to this.
Suppliers have to buy expensive natural gas due to the lack of Russian gas supplies. The prices traded on the energy markets are simply passed on to the customers.
It is still unclear to what extent the price demands of the electricity producers will take on exactly. In a sample calculation by “Welt” it is already clear that gas prices of 14 to 18 cents per kilowatt hour will be history. When calculating the end consumer prices, it was assumed that suppliers forgo Russian supplies of their gas completely and subsequently stock up on the energy market.
The calculation shows that German consumers would have to shell out 28 to 30 cents per kilowatt hour of gas if the full price that is currently being asked on the exchanges, including taxes and other levies, is considered.
The raw material prices for gas also differ from region to region. While a kilowatt hour of American natural gas currently costs 2.2 cents, it is currently 13.6 cents in Europe.
The bottom line is that the suppliers add part of the procurement price, sales and their own profit margin to the purchase price. According to the “Welt” newspaper, this increases the price of raw materials from 13.6 to around 20 cents. If you add up the grid fee (1.66 cents per kilowatt hour), the natural gas tax and the CO₂ price (each 0.55 cents), the concession fee (0.03 cents) and the value added tax (4.4 cents) you get the end result 27.6 cents per kilowatt hour of gas.
“For a household with a consumption of 20,000 kilowatt hours, the price increases that have already been implemented or announced mean additional costs of an average of 964 euros per year,” calculates Steffen Suttner from Check24 for “Bild”.
Experts do not believe that natural gas prices will start falling again any time soon. “The war in Ukraine will probably last longer and we won’t get together with Russia so quickly after the war. Other capacities are also rare. So we will remain at a high price level for several more years,” says Bruno Burger from the Fraunhofer Institute for Solar Energy Systems FOCUS Online.
Energy expert Lundquist Neubauer (Verivox) said to “Bild”: “The basic suppliers have already announced 150 price increases for June, July and August – by an average of 35 percent.” Neubauer expects “a larger wave of price increases in autumn at the latest”.
“Now at the latest, the government should do everything possible to replace natural gas in electricity production, i.e. put coal-fired power plants into operation and finally extend the life of nuclear power plants,” demands economist Volker Wieland at “Bild”. Record productions of electricity with natural gas, as recently in May, must therefore be a thing of the past.
Switching providers does not currently seem advisable for consumers. The prices are already 15 to 18 cents above the already higher average gas price of 13.8 cents (calculations by the Federal Association of Energy and Water Industries). The suppliers have already included the first factors from the calculation above.
Prof. Dr. Dirk Müller from the E.ON Energy Research Center says: “Due to the Russian attack on Ukraine, a significant shortage and further increases in the price of natural gas in Germany can be expected.” He advises simple behavioral adjustments and measures that involve little or no loss of comfort and costs are associated.
“Many gas-based heat generators have the option of activating a night-time lowering of the flow temperature.” This option is not always activated and can be set by the user, says Müller. “A night-time reduction to a room temperature of 17 degrees Celsius in all rooms between 11 p.m. and 6 a.m. can result in savings of eight to ten percent in heating energy requirements.”
You can read more about the gas shortage in Germany here:
In addition, you should activate the operating mode “only domestic hot water” in the summer with modern gas heating systems. “The heating circuits of the heat generator should only be switched on if the temperatures in the building are perceived as too low. Starting the heating period later leads to further savings.”
Reducing the interior temperature from 21 to 20 degrees can lead to heating energy savings of eight to eleven percent. “A further reduction significantly increases this savings effect. A reduction of up to 30 percent can be expected with a reduction to 19 degrees.”
And if you can, you should get a solar system and generate your own electricity, says energy researcher Bruno Burger. In principle, this is the only way out of the crisis anyway.