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ENERGY

EU agrees plan to cut Russian gas and protect Germany

The European Union agreed a plan to reduce gas consumption on Tuesday, an act of solidarity with Germany and a response to Russia's manipulation of supplies as an economic weapon.

Woman cooks on gas stove
A woman cooks on a gas stove. Photo: picture alliance/dpa | Annette Riedl

The plan, approved by energy ministers in Brussels, will see exceptions and carve-outs as some EU countries blanched at making too deep a sacrifice for Berlin and a few landlocked member states.

But Hungary was the only member state to oppose the plan, which passed on a majority vote, and the ministers’ Council of the European Union hailed the deal as a victory for EU unity.

“In an effort to increase EU security of energy supply, member states today reached a political agreement on a voluntary reduction of natural gas demand by 15 percent this winter,” the council said.

“The Council regulation also foresees the possibility to trigger a ‘Union alert’ on security of supply, in which case the gas demand reduction would become mandatory,” the statement continued.

“The purpose of the gas demand reduction is to make savings ahead of winter in order to prepare for possible disruptions of gas supplies from Russia that is continuously using energy supplies as a weapon.”

‘Dirty games’

Germany, the EU’s economic powerhouse, is hugely dependent on Russian gas and remains at the mercy of the supply from Gazprom for the years still needed to find alternative sources.

“It is true that, Germany with its dependence on Russian gas, has made a strategic mistake but our government is working… to correct this,” Germany’s economy minister Robert Habeck said as he arrived.

France said showing solidarity with Berlin would help in turn protect all of Europe, even though Germany takes a major share of the 40 percent of EU gas imports that came from Russia last year.

“Our industrial chains are completely interdependent: if the chemical industry in Germany coughs, the whole of European industry could come to a halt,” said French minister for energy transition, Agnes Pannier-Runacher.

The plan asks member states to voluntarily reduce gas use by 15 percent – based on a five-year average for the months in question – starting next month and over the subsequent winter through March.

Czech industry minister Jozef Sikela, whose country holds the rotating EU presidency, said the plan would deliver a strong answer to state-run Gazprom’s plan to cut gas deliveries to Europe.

Russian President Vladimir Putin “will continue to play his dirty games in misusing and blackmailing gas supplies,” Sikela said.

Gazprom has said it is cutting daily gas deliveries to about 20 percent of capacity from Wednesday.

READ ALSO: Serious situation: Russia to further cut gas deliveries to Germany

‘Wise strategy’

The EU member countries had already rejected an earlier European Commission proposal to give Brussels — rather than the member states — the power to impose gas use cuts in an emergency.

And the 15-percent target will also be adapted to the situation of each country through a series of exemptions, taking into account their level of stocks and whether or not they have pipelines to share gas.

“Nobody challenges the need for solidarity, but the means of solidarity can be very different and the initial proposal was not necessarily the most effective approach,” Spain’s minister for ecological transition, Teresa Ribera Rodriguez, said.

Exceptions are planned for island states such as Ireland, Cyprus or Malta and countries, such as Spain or Portugal, with limited links to the
interconnected gas supply grid.

READ ALSO: ‘Difficult winters ahead’: Germany sets out emergency energy saving measures

Gazprom said Monday that it was halting the operation of one of the last two operating turbines due to the “technical condition of the engine”, but Simson dismissed this claim.

“We know that there is no technical reason to do so,” she said.

“This is a politically motivated step and we have to be ready for that and exactly for that reason the pre-emptive reduction of our gas demand is a wise strategy.”

By Daniel ARONSSOHN, Dave CLARK

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PRACTICAL TIPS

How a quarter of German households can save on their electricity bills

Customers can save a high three-digit sum on their household electricity costs, according to calculations done by German price comparison portals. Here's why you may want to switch your tariff.

How a quarter of German households can save on their electricity bills

German households are overpaying for electricity by billions of euros each year, according to calculations carried out on the Verivox price comparison portal.

This is because nearly a quarter of households in Germany purchase electricity via the most expensive tariff group from their local supplier – the so-called ‘basic supply’, or Grundversorgung in German.

But in Germany, customers have energy tariff options, and saving hundreds on your energy bill can sometimes be as simple as checking your current tariff online and switching to a cheaper one in a matter of minutes.

Based on approximately ten million households consuming electricity from the basic supply, Verivox calculates that Germans are overpaying by about €5.5 billion annually. That’s because the average difference between basic supply rates and the cheapest local energy rates currently amounts to 20 cents per kilowatt hour (kWh).

What is the ‘basic supply’ for household energy?

Household electricity in Germany is purchased through different tariffs (Stromtarifs). Through these various tariffs, local energy companies offer different prices for electricity, depending on customer contracts.

The basic supply tariff for electricity can be thought of as the default. When a new house is connected to the energy grid, for example, its electricity will be provided via the basic supply unless the homeowner chooses another tariff option.

READ ALSO: How to change electricity and gas providers in Germany

The basic supply is intended to ensure that everyone has access to electricity, even if they haven’t shopped around for an energy provider on their own. It can also be advantageous in the short term because it can be cancelled at any time, as opposed to other tariffs which typically come with longer contracts.

But the basic supply is comparatively expensive. According to Verivox, basic supply electricity currently goes for an average of 44.36 cents per kilowatt hour (kWh), whereas the cheapest available rates on average come to 24.7 cents/kWh across Germany.

How much can you save?

At current rates, you can expect to save about 44 percent on your electricity bill if you switch from basic supply to the cheapest option with a price guarantee. 

That amounts to significant savings, considering that annual electricity costs regularly come to a few thousand euros in German households.

The Hamburger Abendblatt reported that a three-person household consuming 4,000 kWh would save an average of €786.

These prices will vary from provider to provider and from region to region. 

Keep in mind that choosing other tariff options often comes with some additional fees. Still, in many cases taking a look at different electricity tariff options can save households some money.

Also, switching tariffs is different from switching your energy provider. If you currently get basic supply electricity from Vattenfall, for example, you could potentially switch to a different tariff option while maintaining your business with them. But if you are between contracts, or currently on basic supply, you could also consider switching providers.

In this case, a comparison portal like Check24 can be useful to get an idea of which companies offer the best rates.

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