German energy boss warns: Keep guard up on gas supply
BONN, Germany — The temperature outside Klaus Mueller’s office almost resembles spring, exactly the kind of mild weather that helped Germany get through the winter without Russian natural gas.
But Germany’s chief utility regulator is not ready to sound the all-clear on an energy crisis spawned by the war in Ukraine, even with natural gas reserves abundant and prices well down from their peak.
Too much could go wrong — especially if consumers and companies grow weary of the conservation habits they learned during a winter fraught with fear of rolling blackouts and rationing, Mueller, head of the Federal Network Agency, said this week.
Plus, there’s next winter to think about.
Other risks, such as a pipeline accident or a sudden cold snap, could set back plans to keep natural gas storage as full as possible as Europe learns to live without the cheap Russian gas that fueled its economy for decades.
Mueller would only concede that he’s “optimistic” this winter will end without a further gas crunch, especially after Germany cut gas use by 14% in 2022 through lowering thermostats, switching to other fuels or halting energy-intensive industrial production. Gas use fell 19% in the last six months across the 27-nation European Union.
“But at the same time, we’re focused already on winter 2023-24, and we know that Germany, and large parts of Europe, will have to get through the next winter without Russian pipeline gas,” he said. And “the risks are in plain sight.”
While he’s thankful for warmer-than-usual winter weather that cut gas use for heating, “will next winter be so mild? No one can say,” Mueller said.
“Second, we have to see if the industrial firms and private households are tired of the efforts related to conservation — or will they redouble their efforts based on experience thus far? We’re pushing for the second to be the case,” he said.
Mueller says he hopes the public responds to an approach based on transparency — not exaggerating risk but not sugarcoating it either. Yet the experience with measures such as masking and social distancing during the COVID-19 pandemic show “that always being told what to do is not especially popular.”
Key for the months and years ahead is a push to use heat pumps instead of gas heating, still the case in roughly half of German homes. Above all, higher prices will force homeowners and businesses to adapt simply to lower their costs.
Gas prices have fallen to under $53 per megawatt hour — the lowest level in nearly a year and a half — from a record $370 per megawatt hour in August, according to FactSet. But they are still well above the $19 per megawatt hour of March 2021.
Mueller said it will take six months to a year before consumers see less expensive bills due to the lower prices. Asked whether prices two or three times their pre-crisis level are the “new normal,” Mueller avoided the phrase, saying there are too many uncertainties that could affect gas prices going forward.