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ENERGY

When will effects of the Russian gas shut-off be felt in Germany?

Fears that Russia would turn off gas deliveries to Germany came true this month. Here's how households could be affected.

A gas metre in an apartment building.
A gas metre in an apartment building. Photo: picture alliance/dpa/dpa-Zentralbild | Jan Woitas

What’s going on? 

After dramatically reducing the supply of gas into Europe over summer, Russia took a step that many had been fearing for months and turned off the taps this September.

According to the Kremlin, the gas shut-off has to do with technical work required on the Nord Stream 1 pipeline connecting Russia with Germany and the rest of Europe. State-owned energy company Gazprom said it had discovered oil leaks in the pipeline while carrying out maintenance and claimed that “the reliability of the operation, of the whole system, is at risk,” requiring the pipeline to shut down.

The Russian gas giant had previously claimed it was unable to deliver gas supplies at full capacity through Nord Stream 1 due to a missing Siemens Energy turbine that had been undergoing repairs in Canada.

However, Germany – where the turbine is now – has claimed that Russia is blocking the return of the turbine in order to weaponise the energy supply. 

In addition, Siemens Energy has said in a statement that the alleged oil leaks would not interfere with the operation of the turbine and were therefore not a valid reason to pause gas deliveries via Nord Stream 1. 

READ ALSO: Russia halts gas supplies to Germany

What’s the real reason for the gas shut-off?

Many suspect it’s a tactical maneuvre designed to strong-arm the West into dropping the sanctions imposed on Russia and lessening its support for Ukraine. 

At the weekend, Russian ex-president Dmitry Medvedev (56) justified the Russian gas supply stop due to the “unfriendly behaviour” of the German government. Writing on Telegram on Sunday, Medvedev described Germany as “an unfriendly country” that had imposed sanctions “against the entire Russian economy” and was supplying “lethal weapons” to Ukraine.

Meanwhile, the Kremlin has said it would “definitely” resume gas deliveries if Europe agreed to drop the economic sanctions, which are believed to be having a major impact on the Russian economy. 

Does that mean there’s no gas coming from Russia whatsoever?

A tiny bit is still flowing into Germany via the Ukraine pipeline, but not in any meaningful quantities.

Most recently, gas deliveries from Russia equated to about 40 gigawatt hours (GWh) per day, compared to the approximately 350 GWh most recently supplied via Nord Stream 1 at just twenty percent of its usual capacity.

By comparison, around 2,800 GWh per day are currently being delivered from Norway, Belgium, and the Netherlands. 

Can Germany still fill up its gas reserves? 

So far this year, Germany has managed to beat its target of filling its gas storage facilities to 85 percent by the start of October, but experts aren’t sure whether it can still meet its targets in November.

Currently, the gas storage facilities are 86 percent full, with the government aiming to fill them up to 95 percent of capacity by November 1st.

It then wants to keep at least 40 percent of the gas in reserve until February 2023, providing additional security throughout the year and over the following winter. 

Gas storage facilities in Saxony-Anhalt.

Gas storage facilities in Saxony-Anhalt. Photo: picture alliance/dpa | Klaus-Dietmar Gabbert

Since the start of the Ukraine invasion in February, Germany has been scrambling to reduce its dependence on Russian energy products. While in April and May, Russia accounted for more than a third of Germany’s gas supplies, August saw the Russian share reduced to just nine percent, while Norway supplied 38 percent of the nation’s gas. 

It means that the end of Russian gas supplies leaves Germany in a less vulnerable position that it would been otherwise. However, experts believe that, without any deliveries from Russia, filling the storage facilities to 95 percent by November 1st will be a challenge. 

How long will the current reserves last?

When the gas reserves are filled to their full capacity, it can generally supply the nation’s energy needs for up to three months over winter.

At 90 percent full, the gas storage facilities can deliver 220 Terawatt hours of energy, which equates to just under two months during colder periods. 

Of course, a lot depends on how cold the winter is and how much businesses and citizens heed the government’s call to reduce their energy usage. At present, the Economics Ministry is hoping that financial incentives might convince industries to find ways to slash their energy use and contribute to energy savings of around 20 percent against last year.

Are there any other backup plans in place? 

Yes. At a European level, countries are relying on each other to show solidarity if supplies start to run low in some regions but not others. 

So far, Austria, Denmark, and France have all agreed to supply gas to Germany in an emergency. 

In addition, the government has been busy building numerous liquefied natural gas (LNG) terminals in the North Sea to assist with gas deliveries. 

READ ALSO: Germany plans more LNG capacity as Russian gas dwindles

How will ordinary people be affected?

So far, the main way that ordinary households have been affected by the energy supply issues is through soaring costs on the energy market.

From October, gas customers will have to pay a levy on top of their ordinary bills and will also see prices go up as suppliers pass on much of their increased costs to consumers. 

A gas hob is lit with a match.

A gas hob is lit with a match. Photo: picture-alliance/ dpa/dpaweb | Stephanie Pilick

Current laws state that private households would be among the last to have their energy turned off in the event of an emergency. 

However, some will have already been affected by the new energy saving rules announced by the government at the end of August, which include a ban on heating private pools and a ‘cold showers only’ rule at public swimming pools. 

READ ALSO: What to know about Germany’s new energy saving rules

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HEALTH

How much more residents in Germany might have to pay for health insurance

People in Germany saw an increase in health insurance costs at the start of the year. It's now expected that they will be hiked up again next year.

How much more residents in Germany might have to pay for health insurance

Health insurance organisations are warning that costs will be hiked up again soon due to concerns over funding. 

Doris Pfeiffer, CEO of the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband), told Germany’s Tagesschau that insurance funds are expecting a billion-euro deficit.

She said it was a tough year “because we don’t have particularly good prospects”.

For people paying statutory health insurance, things could become more expensive next year. Around 90 percent of people in Germany are covered by statutory health insurance.

The contribution rate is fixed by law and stands at 14.6 percent. The additional contribution that the health insurance funds set for their members was raised to 1.7 at the start of this year. 

The latest increase gave statutory insurance funds the ability to charge up to 1.7 percent on top of the standard 14.6 precent contrinution, though not all insurance funds chose to do so.

The costs are split between the employer and employee, so workers in Germany would pay half of any increase. 

READ ALSO: Reader question: How can I change my German health insurance provider?

How much could additional costs rise next year?

Due to the funding issues, health insurers expect an increase of up to 0.6 percentage points to the additional contribution threshold. What this would mean for the insured depends on a few variables such as their income and their insurer.

Someone earning €2,000 gross per month, for example, would have to pay €6 extra per month if their insurer opted to increase additional contributions by this amount. Meanwhile, a gross income of €4,000 would mean €12 extra per month. The employer’s share would be added to this. 

health insurance cards

Many health insurance cards in Germany double as a European Health Insurance Card (EHIC), meaning that they can be used across Europe. Photo: picture alliance/dpa | Jens Kalaene

“That may not sound like much at first glance,” said Pfeiffer. “But there are people who earn very little for whom this is a lot – supermarket cashiers, lorry drivers.”

It comes following a rise in fees at the start of the year. From the start of 2024, additional contributions for statutory health insurance rose by around 0.1 percent in Germany.

Why are costs increasing?

The German healthcare system is one of the most expensive in the world.

As German society ages more, costs continue to rise – and the Covid pandemic didn’t help matters. The National Association of Statutory Health Insurance Funds estimates that this year alone it will cost around €314 billion to provide care for everyone who is insured. 

The money is mainly spent on hospitalisation costs and medical treatment.

READ ALSO: Why long-term care insurance fees are likely to rise in Germany next year

Health Minister Karl Lauterbach (SPD) has so far not presented any concrete proposals on how he intends to relieve the burden on health insurance funds in future.

Instead, the system is likely to face further expenditure. Lauterbach’s hospital reform is expected to drive up costs, while proposals to pay GPs more in order to combat the shortage of doctors would also push up expenses. 

READ ALSO: German ministers greenlight plan to improve healthcare at GPs

Pfeiffer called for a plan to tackle the rising costs.

“We now finally need an approach that puts this healthcare system on a new footing,” she said.

In the coalition government’s initial agreement back in 2021, the parties vowed to support health insurance funds with more tax revenue.

But as difficult budget negotiations take place, it doesn’t look like this will happen. 

This is causing friction among the coalition made up of the Social Democrats (SPD), Greens and Free Democrats (FDP). 

Green budget politician Paula Piechotta, for instance, is unhappy about this.

The opposition CDU/CSU also taken the opportunity to swipe at the government.

“This is not acceptable,” said CDU health politician Sepp Müller. “The tense situation in the social security system cannot continue to be ignored.”

However, it should be noted that there was no plan to help provide more money to statutory health insurance under the previous Health Ministry headed by the CDU’s Jens Spahn. 

When the SPD’s Lauterbach took over in 2021, there was already a funding gap of billions of euros. 

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