How did Germany end its reliance on Russian energy?

Many readers will remember the disaster at Japan’s Fukushima nuclear plant in March 2011. This was a trigger for Germany to significantly scale back its commitment to nuclear power, with eight reactors permanently shut down in August of that year. At the time, it didn’t seem to be a problem: the gas and oil were flowing from Russia and powering the German economy – widely accepted as the engine which drove the rest of Europe.

Nothing illustrated Germany’s reliance on Russian imports more than the Nord Stream pipeline, running from north west Russia to Lubmin, a coastal resort in north east Germany.

There were occasional murmurings about Germany being too reliant on Russian imports, but nothing was done to address any potential problem. German Chancellor Angela Merkel seemed to have a good relationship with Vladimir Putin, and all seemed set fair.

Then – as we all know – on February 24th, the Russian tanks rolled across the Ukraine border. The invasion was swiftly followed by Western sanctions – and suddenly the German economy seemed to be built not on oil and gas, but on sand.
By April, supply chain problems were starting to be felt but, just as importantly, there were stark warnings from German industrialists and politicians.

Martin Brudermuller, CEO of BASF, the world’s largest chemical producer, warned of a ‘total collapse’ if supplies of Russian gas were cut. This was followed by Robert Habeck, the German Minister for Economic Affairs in Olaf Scholz’s new government, warning an ‘immediate embargo on Russian natural gas would threaten social peace in Germany.’

Later in the month, Germany unsurprisingly ruled out an immediate ban on Russian oil – and risked the wrath of its European partners by agreeing to Vladimir Putin’s demands to pay for Russian gas in roubles.

In his interview, Brudermuller had suggested that Germany ‘could be independent from Russian gas in four to five years.’ The obvious question was being asked – ‘how will Germany get through the winter if Russia turns off the gas? – and by the beginning of June, the Guardian was running an article headlined ‘We were all wrong: how Germany got hooked on Russian energy.’ ‘Why did it happen?’ asked the article, saying it had been a ‘terrible mistake’ for Germany to have been so dependent on Russian oil and gas.

Worse followed in late September when the Nord Stream pipeline was bombed in an act of sabotage. Who bombed the pipeline is still a matter of claim and counter-claim – but the closure of the pipeline could surely have only one result for Germany’s economy and people.

In fact, that wasn’t the case. Natural gas makes up around 27% of Germany’s energy mix. Before the war in Ukraine, just over half (55%) of the gas consumed in Germany came from Russia. By the end of June, Germany was only reliant on Russia for about a quarter of its gas needs – and in November, Chancellor Olaf Scholz was able to tell German MPs that “energy security for this winter is guaranteed.”

How did Germany manage to confound the prediction that it would take ‘four or five years’ to become independent of Russian gas?

As soon as Russia invaded Ukraine, Germany began a programme of sourcing gas from elsewhere – for example, from Norway and the Netherlands. This has been expensive, but clearly not as expensive as the damage to German industry if the gas was turned off.
German engineers have also built – in record time – the country’s first import terminal for liquified natural gas (LNG), allowing it to significantly increase imports from the US and Qatar.

The final part of the strategy has been to extend the life of three nuclear power plants, and – which must sit uncomfortably with Scholz’s coalition partners, the Greens – re-open five power plants which burn lignite, a low-grade coal.

Given the situation Germany faced in April, the turnaround represents a significant success story. It will be interesting to see if the country goes back to a reliance on Russian energy as and when the war in Ukraine eventually ends and Vladimir Putin is no longer in the Kremlin.

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