As Germany considers all possible scenarios should Russia decide to cut off all its gas exports to the West, the city of Hamburg could be facing possible rationing of hot water and limited heater usage–according to its environment senator.
The comments come after Russia, Germany’s main source of gas, has cut down exports through the Nord Stream 1 gas pipeline by 40%.
“In an acute gas shortage, warm water could only be made available at certain times of the day in an emergency,” said Hamburg Senator for the Environment Jens Kerstan in a local newspaper.
In March, Berlin enacted the first part of the three-step emergency plan that includes early warning, alert, and emergency levels. The move comes after Russia demanded all its exports be paid in rubles as the Kremlin attempts to breathe life into the currency.
Then, the country activated the second step a month ago, which includes putting all market players, including TSOs and gas suppliers, under more pressure on judicial use of energy resources.
State interventions come in when the plan moves to the third and final step, which is expected to be triggered when “gas supply is insufficient to meet the remaining gas demand,” even after “all relevant market-based measures have been implemented.”
The third step would include the possibility of rationing warm water and limiting the maximum heating temperature. According to the plan, households and essential industries such as hospitals will be prioritized. However, Kerstan sees a technical challenge to the prioritization.
“It will not be possible everywhere to differentiate between commercial and private customers in the event of a gas shortage,” he added.
In a scenario study released by the European country’s Federal Network Agency, only by reducing gas exports and keeping import levels from the Nord Stream 1 pipeline can the country achieve its set gas storage level goals.
Deutsche Bank CEO Christian Sewing earlier forecasted that the country would potentially head for a recession “if imports or supplies of Russian oil and natural gas were to be halted.”
Earlier this year, Berlin shunned calls to revive its nuclear energy industry and stop decommissioning plants. Economy Minister Robert Habeck said that the country instead should focus on building an LNG terminal.
Earlier this month, Germany was said to be planning to restart its coal-fired power plants to conserve its natural gas supplies.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.