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ENERGY

EXPLAINED: What are Germany’s alternatives to Russian gas?

With the country facing an energy crisis this winter after Russia cut natural gas deliveries, we look at what alternatives Germany has and how clean they are.

This aerial view taken with a drone shows solar panels on the roof of a logistics company's freight processing hall in Aurach, southern Germany.
This aerial view taken with a drone shows solar panels on the roof of a logistics company's freight processing hall in Aurach, southern Germany. (Photo by Christof STACHE / AFP)

Even as a country with a strong environmental tradition, Germany is set to struggle this winter as it searches for green alternatives to Russian gas for both its heating and electricity needs.

Around half of German households use natural gas for heat and, with Russia having cut supplies by 80 percent, the average household is now looking at having to pay more than €500 a year extra for natural gas starting from October.

Experts are warning of a “winter of rage” characterised by protests and even riots. The gas levy, in which German gas suppliers are passing on a hike of 2.419 cents per kilowatt hour to consumers, has the federal government looking at ways to ease the burden – including possibly scrapping VAT on the levy.

Though gas use is down 14 percent so far this year, with Germans taking shorter, colder showers, and cities like Berlin and Cologne turning the lights off on some of their most famous landmarks at night, the real test will come this winter. 

So what alternatives does Germany have to Russian gas?

READ ALSO: EXPLAINED: How much will Germany’s gas levy cost you?

Renewables

Already, nearly half of all electricity produced in Germany comes from renewables, particularly solar power, after large investments in capacity from 2009 to 2012.

German economist Christian Odendahl argues that this figure would probably be higher today if those investments had continued.

“During sunny days like today, renewables would probably generate 100% of our power,” he tweeted.

At the same time, less than 20 percent of the energy Germans are actually consuming currently comes from renewables. Meanwhile, gas makes up 27 percent of the energy Germans actually use. Despite the increased renewable capacity – there’s still a long way to go before it will be able to replace gas.

READ ALSO: How Germany is saving energy ahead of uncertain winter?

Nuclear Energy

Germany’s current energy crisis has moved German politicians and public opinion towards something previously unthinkable: more support for nuclear energy. 41 percent of Germans are now in favour of long-term nuclear energy use.

Over three-quarters want to continue using it for at least a little while longer, while only 15 percent want to shut down the country’s three remaining nuclear power plants by the end of the year.

Opposition to nuclear energy is one of the reasons the German Green party – currently a member of the traffic light coalition government – was originally founded and gained popularity. The move to shut down nuclear power in Germany by the end of 2022 has found wide public and political support for decades, with opinion polling shifting only recently.

The government is currently debating whether to extend the life of existing nuclear power plants beyond the end of this year.

Alternative natural gas and coal

On a trip to Norway this week, Chancellor Olaf Scholz thanked the Scandinavian country for increasing its gas deliveries to Germany by about 10 percent – amidst warnings that Norway was already sending Germany about as much as it could deliver.

At the same time, work has begun on five temporary terminals for importing liquefied natural gas (LNG) on ships from gas-producing countries like the United States and Qatar. Some of the temporary terminals, which are located in Wilhelmshaven, Brunsbüttel, Stade, and Lubmin on the northern German coast, could be finished as early as the end of this year.

There are also plans to start construction on two permanent terminals at Wilhelmshaven and Brunsbüttel before the end of this year.

Environmental groups, however, are already protesting against the construction of the terminals.

At the same time, German coal plants resumed operations in early August, amidst concerns both moves could put Germany’s climate goals in jeopardy.

READ ALSO: Could Germany’s gas supplies last the winter?

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MONEY

German cabinet approves €300 energy relief payment for pensioners

The German cabinet has approved a one-time payment in December for pensioners to provide relief for rising energy bills.

German cabinet approves €300 energy relief payment for pensioners

The €300 payment is to be paid out by December 15th, Labour Minister Hubertus Heil, of the Social Democrats, said on Wednesday following the cabinet meeting. 

The cabinet also decided on a higher upper limit for people with so-called midi-jobs, which is a type of marginal employment in between a mini-job (which is generally exempt from taxes and social contributions) and full-time employment. 

Politicians in the coalition government, made up of the SPD, Greens and FDP, agreed on the measures in September as part of their third energy relief package.

Heil said the state was “standing by people” at a time when the cost of living was rising. 

Why are pensioners receiving a special payment?

Germany has put together several major relief packages to help people financially since the start of the energy crisis. 

One of the most high profile support measures, which was announced back in March this year, was a €300 taxable payment given out to people in employment. That was paid out in employees’ September pay packets. 

READ ALSO: Everything Germany is doing to help relieve rising energy costs

However, the government was slammed at the time as millions of pensioners were left out from the relief. It was only valid for taxpayers in tax brackets I to V.

According to the Federal Ministry of Social Affairs, a lump-sum energy payment will now be paid to all those who are entitled to a statutory old-age pension, pension for reduced earning capacity or surviving dependents’ pension, or to pension payments under the Civil Service or Soldiers’ Pensions Act from December 1st until December 15th. 

Pensioners have to live in Germany to be entitled to the payment. According to the ministry, the payment is made automatically – people do not have to apply for it.

The energy allowance is not counted towards income-related social benefits and is not subject to social security contributions, the ministry emphasised. The government estimates the costs of the payout at about €6 billion.

Relief for people with low incomes

The increase in the upper earnings limit for people with midi-jobs is being increased from €1,600 to €2,000, the cabinet decided. This is also part of the third relief package put together by the coalition government to support people in the energy crisis. 

“The sharp rise in prices for energy and food is a heavy burden on citizens,” said Heil, adding that the measures in the package will cushion some of these costs. 

The increase in the midi-job threshold alone would relieve the burden on employees subject to social security contributions with low wages by €1.3 billion, without having to forego social protection, he said.

“In this way, we are providing targeted relief for people with low incomes,” said Heil.

Unlike mini-jobs, midi-jobs are not exempt from social security contributions. However, they are subject to staggered reduced rates. Employees in midi-jobs do not have to pay full social security contributions until they reach the upper limit of €1,600 at present – and €2,000 in future.

READ ALSO: The rules in Germany around ‘mini’ and ‘midi-jobs’

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