World
Explained: Germany's Energy Woes And The Curious Case Of Nord Stream 1's Turbine
- Russia's state-run energy company, Gazprom, has said that it’s choking the flow of natural gas to Germany starting 27 July to 20 per cent of its typical capacity.
Nord Stream
At a time when Europeans are suffering from the heat wave, they are being confronted with an entirely opposite problem i.e. ensuring there is enough heat for the winter that lies ahead.
Gazprom, Russia's state-run energy company, has said that it’s choking the flow of natural gas to Germany starting Wednesday (27 July) to 20 per cent of its typical capacity.
The move to cut existing flows on the Nord Stream 1 pipeline in half to just 20 per cent of capacity comes after Russia already lowered the capacity to 40 per cent last month.
This has become a major source of anxiety for European leaders, who are already worried about an energy crunch in the coming winter.
Gazprom claims it needs to lower capacity so it can fix a turbine in the 760-mile undersea pipeline.
According to a spokeswoman for Germany’s Economy Ministry, there was “no technical reason” for the reduction.
In other words, Gazprom has put the volume cuts down to problems with turbines maintained by Germany’s Siemens Energy at a factory in Canada. However, Berlin and gas market analysts say "Russia is using the issue of turbine repairs as a pretext for cutting flows."
Ever since the war in Ukraine broke out , Russia has been slapped with multiple tranches of Western sanctions. In response, Russia has pulled back gas shipments to the EU and cited technical issues as a justification.
The EU believes that Russia is using its energy exports as a weapon to hit back at the West for the economic pressures it’s had to endure as a result of the western sanctions.
Energy exports are certainly a powerful weapon. Before the war in Eastern Europe began, Germany relied on Russia for about 55 per cent of its natural gas needs, giving Russia a significant geopolitical leverage.
Russia's move comes at a time when German business confidence has already fallen to its lowest level in more than two years.
Europe’s largest economy is teetering on the brink of recession, as per a report from the FT.
Germany has been under pressure due to rising inflation and its dependence on Russian energy.
"Europe is struggling to fill gas storage facilities, leading to warnings of rationing for industry and concerns about shortages for domestic users," says the report.
After Gazprom's announcement that the volume of gas flowing to Europe would be cut, gas prices in Europe rose by 10 per cent.
They are now trading at €177 per megawatt hour, which is five times higher than the price a year ago. "Gas flows will drop to 33mn cubic metres a day of gas from 4am GMT on Wednesday, Gazprom said, down from a full capacity of more than 160mn cubic metres and half of current flows. The group resumed partial gas supplies through NS1 last week after a planned outage for repairs," according to the report.
There are fears in Europe that Russia will cut gas exports to Europe completely. This has led to the European Commission telling EU member states to cut their consumption by 15 per cent. This idea of the European Commission however has been met with resistance. Many EU capitals have pushed back again this target, saying that it is 'too much'.
It seems Germany is paying the prize for an incoherent foreign policy. Earlier, when the Americans raised a red flag about Germany's energy dependence on Russia, the Germans smirkingly ignored it.
Then, instead of sticking with their foreign policy of good relations with Moscow, they changed tracks and joined the western bandwagon of getting involved in America's proxy war and weaponising the global financial system.
With the Greens in charge of German foreign policy now, one should hardly expect any improvement. Incoherent policy goals with a dollop of hypocritical moral preening contrary to German national interest will continue to persist. German politicians who led Germany to this vulnerable position will not face any public scrutiny.
It is not surprising that a time when every observer gets that Germany needs to invest in nuclear energy, and learn from neighbouring France, the German Foreign Minister Baerbock says "Nuclear power is not an answer to the question of gas security in Germany".
The German polity, which faces negligible scrutiny from the German society, is determined to uphold its ideological dogmas with religious zeal and it will not allow facts (such as the safety record of nuclear energy in comparison to other forms of energy) to get in the way.
It appears that rationing in housing societies, dimming of street lights, etc. will continue.
