Germany’s energy crunch explained

Berlin keeps blaming the crisis on Russia, with the US trying to take advantage of the situation

Germany has been struggling to meet its energy needs for around a year as it seeks to reduce what it calls a dependence on Russian energy imports. Berlin’s officials still blame the troubles their nation faces on Moscow and its alleged “energy war” against the West. 

On Friday, an energy transition minister of the German northern state of Schleswig-Holstein, Tobias Goldschmidt, accused Moscow of “starting an energy war” and “reducing gas supplies”. Federal Economy Minister Robert Habeck, who repeatedly stated that energy “independence” from Russia was worth all the troubles, called massive energy imports from the country a “big mistake” at the World Economic Forum in Davos earlier this week.

Why did Russia start reducing gas supplies to Germany?

In June 2022, Russia’s energy giant Gazprom reduced gas flows through Nord Stream 1 – a major pipeline delivering natural gas to Germany under the Baltic Sea – first by 40% and then by 60%. 

The decision was prompted by technical issues as Germany’s Siemens company did not return a turbine for gas-pumping units at a Nord Stream 1 compressor station in time. Gazprom then said it had to further reduce gas supply to 20% of the total capacity over the summer as four out of five turbines at the station required maintenance. Siemens could not provide the turbine due to the expansive sanctions regime the US and the EU introduced against Russia, Gazprom added.

Siemens accused Gazprom of “lying” but still admitted that only one out of five turbines needed for the gas flow was operational in August 2022.

What happened to Nord Stream pipeline?

On September 26, Nord Stream pipelines were damaged in a series of underwater explosions off the island of Bornholm, within the economic zones of Denmark and Sweden. Both strings of Nord Stream 1 and one string of Nord Stream 2 pipeline were rendered unusable by the blasts.

 

Sweden, Denmark and Germany launched a probe into the incident but refused to share its results with Russia. Gazprom investigators were only allowed to inspect the blast site once in late October 2022. Moscow called the incident an “act of terrorism” and pointed the finger at Washington. 

Western officials were quick to blame Russia itself for the incident. Later, the Washington Post admitted there was “no evidence” implicating Russia in this case. No official investigation results were presented and no suspects officially named.

Fate of Nord Stream 2

Russia’s Nord Stream 2 pipeline was completed in September 2021. However, it was in the process of certification by Berlin and Brussels up until February 2022. Germany repeatedly claimed the project did not meet the EU standards despite previously defending it. 

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US actively working to delay certification of Nord Stream 2 – Nuland

The project also faced tremendous pressure from the US from the very onset. Washington declared it a threat to Europe’s security and imposed sanctions on companies involved in its construction.

Nord Stream 2 also faced vehement opposition from Ukraine and Poland, which both serve as transit counties for Russia’s overland gas network. Kiev and Warsaw feared losing leverage with the emergence of an alternative transit route. 

German Chancellor Olaf Scholz, who initially backed the project, indefinitely halted its certification after Russia recognized Ukraine's Donbass republics as independent in February 2022.  

What does Russia do now?

Moscow still considers Europe to be a viable market for Russia, Deputy Prime Minister Aleksandr Novak said in December 2022. The nation is also ready to resume gas supplies to Europe through the remaining Yamal-Europe Pipeline. The pipeline is now used by Poland for reverse gas transit from Germany. 

Russian gas is also still being supplied to certain European buyers via a transit line through Ukraine and the TurkStream pipeline through Türkiye.

What happens in Germany?

German energy giants RWE and Uniper filed lawsuits against Gazprom, demanding compensation for the missing gas supplies. Gazprom said that it does not recognize the violation of contracts in Uniper’s case.

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US taking advantage of EU energy crisis – Paris

Some German officials, including Saxony’s prime minister, Michael Kretschmer, have called for Nord Stream pipelines to be restored. Germany must preserve the option to “buy something other than expensive liquefied natural gas after the war,” he argued last week. 

The opening of several LNG terminals in Germany has been met with protests over the past few weeks by locals and eco-activists who objected to the lack of safety checks and environmental protections amid the sped-up approval process. 

The US is still trying to take advantage of the situation in Germany as well as in other EU nations. In October, Washington called the Nord Stream explosion a “tremendous opportunity to become Europe’s largest LNG supplier.” French Finance Minister Bruno Le Maire then blasted America for selling its LNG “at four times the price that it sets for its own industrialists.” “The conflict in Ukraine must not end in American economic domination and a weakening of the EU,” he warned at that time. 

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