Germany’s decision to phase out nuclear energy, culminating in the shutdown of its last three reactors—Emsland, Isar 2, and Neckarwestheim—in April 2023, marked the end of over 60 years of nuclear power generation in the country .

This policy, accelerated after the Fukushima disaster in 2011, was closely linked to Germany’s ambition to achieve carbon neutrality by 2045 and to address public concerns about nuclear safety and radioactive waste .

Prior to the phase-out, nuclear power accounted for approximately 10-13% of Germany’s electricity generation, making it a significant zero-emission energy source within the national grid .

**Advantages and Disadvantages of the Nuclear Phase-Out** The primary advantage cited for the nuclear phase-out is the alignment with Germany’s long-term climate and safety goals.

The government and the Green Party argue that nuclear power is neither green nor sustainable, emphasizing the unresolved issue of radioactive waste and the risks associated with nuclear accidents .

The phase-out is also intended to accelerate the transition to renewable energy, with the government targeting 80% of electricity from renewables by 2030 and net-zero emissions by 2045 .

However, the disadvantages are substantial.

The removal of nuclear power has created a significant gap in the energy mix, previously filled by a stable, low-carbon source .

To compensate, Germany has increased its reliance on coal and natural gas, including keeping coal-fired plants operational or extending their lifespans, which directly conflicts with climate objectives and increases carbon emissions .

A 2019 study estimated the social cost of replacing nuclear with coal at approximately $12 billion annually, primarily due to increased mortality from air pollution .

This shift has been described as a public health emergency, with air pollution from coal contributing to respiratory illnesses and premature deaths, particularly in communities near coal plants .

**Coping Mechanisms in the Energy Market** The German energy market has faced significant challenges in coping with the loss of nuclear power.

The immediate effect has been a surge in energy prices, with one-year ahead electricity prices reaching nearly €1,000 per megawatt-hour—a 720% increase since early 2022 .

The natural gas import bill more than doubled in 2022, rising from €35.4 billion to €74 billion, despite a 30% reduction in import volumes, due to a 197.3% increase in average prices .

These price spikes have placed German manufacturers at a competitive disadvantage, prompting some to consider relocating operations abroad .

The energy market has also experienced frustration from industry stakeholders over what is perceived as a lack of a coherent government energy strategy, leading to declines in manufacturing and investment .

To address these challenges, the government has enacted several relief measures, including a €200 billion package to mitigate the impact on households and businesses, price caps on gas and electricity, and subsidies to manage energy costs .

Additional measures include a €65 billion relief package, windfall taxes on energy producers, and temporary reductions in sales tax on gas and heat deliveries .

Despite these interventions, inflation remains elevated, with energy prices being a primary driver .

**Impact of the Russian-Ukrainian War** The Russian-Ukrainian war has profoundly exacerbated Germany’s energy supply challenges.

Before the conflict, Germany imported about 55% of its natural gas from Russia, making it highly vulnerable to supply disruptions .

The war led to a dramatic reduction in Russian gas supplies, causing European gas prices to nearly triple compared to pre-conflict levels .

The halt of a major Russian gas pipeline forced Germany to urgently seek alternative energy sources, ramp up gas storage, and implement demand reduction measures .

The government also seized three Russian-owned oil refineries, including the Schwedt refinery, which supplied 90% of Berlin’s fuel and accounted for about 12% of Germany’s oil processing capacity .

The energy crisis has had severe economic consequences, including Germany’s first trade deficit in over three decades, largely due to soaring import prices for energy and food .

Rising energy costs have raised concerns about a potential recession and have adversely affected the competitiveness of German businesses, particularly in energy-intensive industries .

The government’s response has included plans to expand liquefied natural gas (LNG) import capacity and accelerate investments in renewable energy and hydrogen infrastructure .

**Renewable Energy Expansion and Emission Reductions** Despite these challenges, Germany has made progress in expanding renewable energy.

In 2023, the country achieved a 10.1% reduction in greenhouse gas emissions, attributed to growth in renewables and decreased coal and gas usage .

The government aims for a 64% reduction in emissions by 2030 compared to 1990 levels .

However, the growth of renewables faces obstacles such as bureaucratic hurdles and local opposition, particularly affecting onshore wind projects .

The government plans to quadruple offshore wind power generation by 2030, but industry experts express doubts about meeting these targets due to infrastructure limitations .

**Public and Political Sentiment on Nuclear Energy** Public opinion in Germany regarding nuclear energy is increasingly divided.

While the government, especially the Green Party, remains committed to the phase-out, recent polls indicate that a significant portion of the population now views nuclear power as a viable option for achieving climate targets and ensuring energy security .

For example, 65% of Germans now see nuclear power as necessary to meet EU climate targets .

The energy crisis and rising prices have fueled public discontent and political pressure to reconsider nuclear energy, with some sectors advocating for bringing reactors back online or extending the life of existing plants .

The Free Democratic Party (FDP), a coalition partner, has expressed concerns about the electoral risks of the Green Party’s anti-nuclear stance and has engaged in discussions about the feasibility of extending nuclear plant operations .

Prominent business leaders, such as Elon Musk, have criticized the closure of nuclear plants as a national security risk and have advocated for a return to nuclear energy .

Internationally, Germany’s position contrasts with France, which relies heavily on nuclear power and is pushing for its inclusion in the EU’s sustainable finance taxonomy .

This divergence has led to tensions within the EU, as Germany opposes the recognition of nuclear as a sustainable investment while France advocates for it .

**Comparative Context and Future Outlook** Germany’s nuclear phase-out stands in contrast to other EU countries.

France generates about 77% of its electricity from nuclear sources and is actively promoting nuclear as part of its energy strategy .

Other countries, such as Belgium and Spain, are also planning nuclear phase-outs, illustrating a division in EU energy strategies .

The German government remains officially opposed to nuclear energy, citing safety and waste disposal concerns, but internal political divisions and shifting public opinion indicate that the debate

Germany’s decision to phase out nuclear energy, culminating in the shutdown of its last three reactors—Emsland, Isar 2, and Neckarwestheim—in April 2023, marked the end of over 60 years of nuclear power generation in the country .

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Decarbonization center stage in Germany's 'climate election'

Campaign billboards in Germany. Green momentum is pushing climate change up the agenda in the run-up to the Sept. 26 vote.
Source: Sean Gallup/Staff/Getty Images News via Getty Images

Voters in Germany, Europe's largest economy, go to the polls Sept. 26 for a federal election with climate change and energy policy as key battlegrounds.

Sixteen years of coalition governments led by Angela Merkel's Christian Democratic Union, or CDU, initially saw rapid build-outs of wind and solar power, but more recently have been characterized by a lack of progress on climate issues, just as other countries have made bold strides forward.

A rise in popularity of the country's Green Party is now forcing the larger parties to take a harder line on issues from Germany's coal exit to the rejuvenation of its fledgling onshore wind market, setting up what is billed as "a climate election" by German think tank Agora Energiewende.

As a sign of the times, the Green Party's candidate for chancellor, Annalena Baerbock, joined the CDU's Armin Laschet and Olaf Scholz of the Social Democratic Party, or SPD, for a series of televised debates, breaking tradition from the usual two-person format.

"The next government will be the last to have an active influence on the climate crisis, and I am deeply convinced that we can do it," Baerbock said during a Sept. 12 debate. "It is an enormous opportunity for our country."

But even against this backdrop, the next administration may fall short on delivering what is needed to decarbonize the economy and limit global warming to 1.5 degrees C, as set out by the Paris Agreement on climate change.

"None of the election manifestos are compatible with the 1.5-degrees target; the Greens are closest," Claudia Kemfert, head of the energy, transportation and environment department at the German Institute of Economic Research and a member of the German Environment Ministry's expert council on environmental issues, said in a Sept. 8 email.

New climate law 'still insufficient'

In Germany's political system of proportional representation, governments are usually formed through coalitions of two or more parties. The Green Party's polling results have catapulted the once small party to the club vying for the chancellorship and the party is likely, though not guaranteed, to form part of a new coalition government.

The Greens are putting pressure on other parties to take a stand on climate issues, while their possible role in a future government means other parties can defer to them for much of the policy detail, according to Karla Klasen, an associate at law firm Osborne Clarke in Cologne. "The Social Democrats and the Greens barely differ on climate and energy; the Greens go into the details and have thought things through, while the SPD is copying," Klasen said in a Sept. 8 interview.

The new government will inherit an overhaul of Germany's climate commitments, forced through in May after a court ruling, which moved the country's net-zero target forward to 2045 and introduced fresh milestones in the years until then.

While governing coalition partners, the CDU and SPD, as well as the Free Democratic Party are sticking largely to the newly defined climate objectives in their election manifestos, the Green Party has pledged to accelerate the decarbonization of Germany's economy, calling the revised climate law "still insufficient."

The Greens, the third-most popular party in voter polling, want to curb emissions by 70% by 2030, while also ushering in a faster coal exit, bringing it forward eight years from the existing 2038. By 2035, the party wants 100% renewable energy, which would help achieve net-zero emissions in 20 years, it said.

Kemfert said the new climate law is not compatible with the Paris climate accord and needs to be tightened further, and efforts should target net-zero emissions within 15 years. "To achieve the climate targets we need a massive renewables build-out, a coal exit by 2030 and a departure from fossil fuels in transport and buildings. This is extremely ambitious and can only succeed with a broad range of measures," Kemfert said.

Bureaucratic hurdles

In an Aug. 30 report, Agora laid out a set of recommendations for Germany's new leaders, including an annual €30 billion budget for climate-protection measures, starting in 2022.

It also recommends screening financing through the EU's sustainable finance taxonomy. Shutting down Germany's last coal-fired power plant can be achieved by 2030, the group argued, while onshore wind deployment needs to be tripled.

Growth of onshore wind has slowed in recent years amid a lack of suitable locations and growing local opposition. Agora called for further land to be made available and speedier permitting procedures, as well as for financial incentives for local communities.

In an analysis of election manifestos, German wind power association BWE found the Green Party has the strongest commitment to renewables and the deployment of new capacity, followed by the Left and then the ruling CDU and SPD. To reach Germany's net-zero target by 2045, BWE calls for annual onshore wind construction of 4.5 GW.

Outgoing chancellor Angela Merkel.
Source: Sean Gallup/Staff/Getty Images News via Getty Images

"The big hurdle is the German bureaucracy," Daniel Breuer, energy lawyer and partner at Osborne Clarke, said in an interview.

The devolution of permitting responsibility to local authorities will remain a stumbling block for onshore wind regardless of high-level policy pledges, Breuer said. Meanwhile, solar is on a growth path, even outside of Germany's subsidy framework. "We are advising on a multitude of large utility-scale solar projects financed with [power purchase agreements]. Corporate demand is there because onshore wind isn't working," Breuer said.

Given the country's power needs and the pace of renewables deployment, Breuer does not consider a complete exit from coal by 2030 to be realistic. New gas power plants supplied by the incoming Nord Stream 2 pipeline from Russia could help accelerate the transition, he said.

Hydrogen pledges

Hydrogen plays a significant role in most parties' election pledges: The SPD wants to make Germany the leading market for hydrogen technology by 2030 and the Green Party pledges to collaborate with wind- and solar-rich nations for imports to top up domestic production.

The CDU said it will implement Germany's existing hydrogen strategy, which prioritizes green hydrogen, made from renewables with electrolysis, and targets 5 GW of electrolyzer capacity by 2030. The party will also accept blue hydrogen, made from natural gas with carbon capture, "in the transition phase."

Kemfert said it will take a decade before green hydrogen can be deployed at scale in Germany, exclusively in sectors where direct electrification is not possible.

"And in this decade we have to at least triple the rate of expansion of renewable energies and get out of fossil fuels," she said. "By choosing the wrong priorities, we create new fossil pathway dependencies, so that meeting the climate targets moves further into the future."

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Europe’s industrial giants have fretted for months that gas shortages this winter will cripple production. But even with fuel available, companies are discovering they can’t afford it.

“It’s not about shutdowns. It’s pricing, it’s cost,” said Christian Levin, CEO of Traton, the truckmaking unit of Volkswagen.

Europe is paying seven times as much for gas as the US, underscoring a dramatic erosion of the continent’s industrial competitiveness that threatens to cause lasting damage to its economy. With Russian President Vladimir Putin redoubling his war efforts in Ukraine, there’s little sign that gas flows — and substantially lower prices — will be restored to Europe in the near term.

Signs of an economic transformation are already afoot: Germany, Europe’s biggest economy, has seen its usual trade surplus dwindle as the surge in imported energy costs offsets its high-value exports of cars and machinery, and chemical companies began shifting production outside the country. Last month, German producer prices jumped by a record 46%.

Plastics maker Covestro won’t make growth investments in Europe if the crisis persists and will instead look to Asia, where CEO Markus Steilemann said the company can secure energy at prices 20 times cheaper than in the German and European spot market.

Volkswagen, Europe’s biggest carmaker, warned last week that it could reallocate production out of Germany and Eastern Europe if energy prices don’t come down.

Chancellor Olaf Scholz travelled with a group of business leaders to the Middle East at the weekend as he tries to nail down deals for liquefied natural gas with Saudi Arabia and Qatar to make up for Russia’s cuts.

But negotiations have been difficult, with gas suppliers including Qatar playing hardball over the price and duration of potential agreements, German officials have said. Discussions with suppliers in Europe and North America have proven similarly complex, underlining the uphill struggle Scholz faces in locking down supplies at prices that will keep Germany’s economic base competitive.

On Sunday Reuters reported that  German utility RWE has struck a deal with Abu Dhabi National Oil Company to deliver liquefied natural by the end of December.

Covestro expects its fuel bill to top €2.2bn in 2022, almost four times its cost in 2020, the year before Russia started choking off gas supplies to Europe. “At the current price level, energy-intensive German industry is no longer globally competitive,” a Covestro spokesperson said. “For a number of chemicals, imports from the US or China are already cheaper than producing them locally.”

Lasting damage

Where possible, manufacturers including Volkswagen and BMW are moving from gas to oil or coal to keep facilities running. But some energy-intensive manufacturing — such as metals, paper and ceramics — has become unfeasible, prompting a growing number of companies to shut down, shift production abroad or, like chemical giant BASF, to import key materials such as ammonia from competitors. Mercedes-Benz has ramped up production of key car parts to stockpile in case it has to close German factories.

“These burdens are causing lasting damage to the industrial core of our economy,” said Christian Seyfert, MD of VIK, a group that represents energy-intensive companies. “We urgently advise politicians to take decisive action so that Germany and Europe as a business location are not completely left behind internationally.”

Governments across Europe, where industrial production accounts for about a quarter of the economy, are taking emergency actions to shore up utilities and cushion the impact of the crisis. The UK announced an estimated £40bn plan that would cap wholesale energy prices that feed into gas and power contracts for businesses for six months.

Germany, because of its heavy reliance on Russian gas, has been hit harder by the energy shortage than many of its neighbours. But the rest of the continent is under similar duress.

In France, glassmaker Duralex, located near Orleans, said it’s putting its oven on standby for five months even though the order book is full and sales are growing. “Continuing to produce at current prices would be a financial aberration,” said Jose-Luis Llacuna, president of Duralex, which exports to 110 countries and had its Picardie model featured in the James Bond movie Skyfall.

High stakes

French President Emmanuel Macron on Thursday urged small and medium-sized businesses to hold off on signing new energy contracts at “crazy prices”, saying governments are renegotiating gas and electricity tariffs.

The stakes are perhaps highest in Germany, where industrial production makes up about 30% of the economy and employs about 1.15-million people. Energy-intensive factories countrywide supply everything from gearbox components for cars to the chemicals for medicines and everyday plastics.

Covestro, which makes materials for the building and car industries, said demand is starting to break down. “We’re slowly losing our customers,” Steilemann said. “We have an increased number of insolvencies, an increased number of closures and very restrained purchasing.”

Germany is to nationalise Uniper, the country’s largest gas importer, with an €8bn capital injection, and the country is poised to impose a gas levy on October 1 that spreads the pain of soaring wholesale energy prices to households and businesses.

Businesses have decried that plan. “Our companies can no longer cope with any further burdens,” said Wolfgang Grosse Entrup, president of the chemical association VCI, an organisation that represents the likes of BASF and Evonik Industries, key suppliers to Germany’s car making sector. “The situation is becoming more and more drastic.”

Bloomberg News. More stories like this are available on bloomberg.com

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Content: This is an audio transcript of the FT News Briefing podcast episode: Russia’s move on Ukraine triggers western sanctions

Marc Filippino
Good morning from the Financial Times. Today is Wednesday, February 23rd, and this is your FT News Briefing.

[MUSIC PLAYING]

Russia is edging closer to war. President Vladimir Putin is endorsing Russian-backed separatists who claim the entire Donbas region of eastern Ukraine. Meanwhile, western powers are pushing back both with sanctions and by suspending the Nord Stream 2 pipeline project. But can Germany kick its Russian gas habit?

Guy Chazan
Its industry has really become addicted to relatively cheap Russian gas so it’s in a bit of a bind, really.

Marc Filippino
Plus, how are Russian markets holding up through all this? Unsurprisingly, not so great. We’ll tell you more. I’m Marc Filippino, and here’s the news you need to start your day.

[MUSIC PLAYING]

Very late on Monday night, Russian president Vladimir Putin decided to send what he called peacekeeping troops into eastern Ukraine. They’ll support two Russian-backed separatist states that he’s recognised as independent. This crossed a line for western powers, and they retaliated with a salvo of sanctions against Moscow on Tuesday. The US is targeting two of Russia’s largest financial institutions, as well as Russian elites and their family members. The FT’s Henry Foy has more on Europe’s sanctions towards Russia.

Henry Foy
So the European Union has decided to sanction a lot of individuals and entities. They’ve gone after 351 members of the Russian parliament. These are elected MPs, elected representatives who voted for the independence of these statelets, these separatists to be recognised for troops to be sent in, and also 27 individuals and entities who are linked to actions that have undermined Ukraine’s sovereignty. The key thing here, though, is the EU, just like the US and the UK who also announced their own sanction packages, are saying this is not it. This is just the first wave. And if you continue aggression against Ukraine and if there is a full invasion of the rest of Ukraine not held by these pro-Russian separatists, then there will be more — much, much more. This first wave is targeted. It’s not particularly economically damaging, but it’s a sign that there is unity across the west in standing up to this.

Marc Filippino
Henry, is all this enough to push Russia from further escalation?

Henry Foy
Well Marc, officials I speak to here in Brussels, in the EU, inside of Nato, tell me basically, no. That effectively, Putin has made a decision that he is going to go the whole way and invade Ukraine. That’s a decision that he’s built up over years. It’s an emotional decision. It’s an irrational one. And there’s really little that the west can do about it, given that Putin has thrown away and torn up all the diplomatic efforts. And he will take these sanctions and the sanctions will slow him down. They will affect the Russian economy. They will make an invasion more painful than perhaps it would have been before. However, they’re not going to stop him if that is what he intends to do, and most people, the Nato intelligence community, the defence community, believes that that is his decision.

Marc Filippino
Now, how is Nato’s approaching all this? You know, a crucial issue for Russia is that it wants to keep Ukraine and other former Soviet countries out of Nato. What’s its role right now?

Henry Foy
So Nato’s role, they’ve been very clear about this, is to protect itself, to protect alliance members, to protect Nato members in Europe. So what they’ve done in recent months and weeks is to deploy more troops in eastern European countries that border Ukraine and Russia effectively as deterrents to Russia to say, look, if you are going to invade Ukraine, you’re not going to come anywhere near us because we are going to defend our own, our own members, but also to help with any cross-border fallout from an invasion of Ukraine, which is likely to be in the form of refugees, potentially spillover events such as terrorism.

Marc Filippino
Henry Foy is the FT’s European diplomatic correspondent.

[MUSIC PLAYING]

The news of Russia sending troops to Ukraine sent the price of oil up to nearly 100 bucks a barrel yesterday, and there was other energy news too. Germany has frozen the approval process on the controversial Nord Stream 2 gas pipeline. Chancellor Olaf Scholz says Berlin would not approve the Kremlin-backed project. The pipeline is owned by the Russian-backed company Gazprom and would have increased a Russian gas supplies to Germany and the rest of Europe. The pipeline project has been in the works for years, and there has been a lot of pressure on Germany to stop it. But now that it’s been stopped, what’s next for Germany’s energy sector? Our Berlin bureau chief Guy Chazan joins me now to talk about this. Welcome to the show, Guy.

Guy Chazan
Hi.

Marc Filippino
So Guy, one of our Lex columnists wrote that Germany has been like a junkie in its addiction to Russian gas. How dependent is Germany on Russian energy?

Guy Chazan
Well, it relies on Russia for 55 per cent of its gas imports, and that’s more than many other countries in Europe. It’s a sort of, it’s an indictment in a way of the country’s kind of energy policies over the past few years because in 2011 it took this rather controversial decision to phase out all its nuclear power stations by 2022, and it’s now also phasing out its coal-fired power stations by 2030. So it has all these very ambitious goals to change its energy mix, but that has made it relatively more reliant on gas. And when you’re more reliant on gas, you’re more reliant on Gazprom because that’s Europe’s major supplier.

Marc Filippino
Yeah, and Russia, in response to Germany’s move, said, OK, well, you know, this is going to have an impact on already high energy prices. How hard will higher prices hit Germany’s economy?

Guy Chazan
Well, we’ve already been getting a taste of it because over the past few months, energy experts have said that Gazprom seems to be deliberately withholding supplies to the spot market in Europe, and that has driven up prices. But it’s basically destroyed the reputation of Gazprom as a reliable supplier in Germany. The green minister of the economy yesterday said that explicitly, and that’s really a big change because in the past, whenever you sort of ask German officials, you know, what about this relationship with Russia? They always say, well, you know, even in the worst times during the cold war, Russia was a reliable supplier. Those flows of gas were never affected. But that seems to have changed in recent months, and the perception of Gazprom has accordingly changed as well in Germany.

Marc Filippino
So given that this perception of Gazprom has changed, what alternatives does Germany have when it comes to energy sources?

Guy Chazan
Well, none at the moment. That’s the problem. It basically is building a terminal for the import of LNG, liquefied natural gas. But that is very expensive, much more expensive than Gazprom’s gas. So it’s in a bit of a bind, really. But the big difference, I suppose, really from the Merkel era, the governments of Angela Merkel, is that we now have this government with the Greens, and they are determined for Germany to go carbon neutral in the next 25 years. And if that ambition is achieved, then there will be much, much more renewables, much more wind and solar, and much less reliance on fossil fuels such as oil, coal and gas.

Marc Filippino
Less of a question on the economics of this whole thing and more about the safety of German people. I mean, it’s the middle of February. If people aren’t able to heat their homes, is there a potential issue with people being safe and warm in Germany?

Guy Chazan
Well, I don’t think so, because the consensus is that Gazprom and Russia would not do anything as suicidal as withhold gas supplies to Germany. I mean that literally would be destroying an energy relationship, which is mutually, very, very beneficial. It’s not just Germany that benefits from this. It’s Russia, too, which relies very, very heavily on the flow of foreign currency into its exchequer. I think actually, if it were to come to that, Germany is actually quite well placed at the moment because the winter is drawing to an end and it’s getting sort of LNG shipments via Rotterdam. So it has been able to diversify. And apparently ministers have been saying the energy security situation is OK at the moment.

Marc Filippino
Guy Chazan is the FT’s Berlin bureau chief. Thank you, Guy.

Guy Chazan
Thanks.

[MUSIC PLAYING]

Marc Filippino
Moscow’s main stock benchmark has collapsed by a third since October. Markets have been responding to the escalating crisis in Ukraine. Investors are mostly worried about two things — one, a full-blown invasion by Russia into Ukraine, and two, how sanctions, which you know, we talked about earlier, will affect assets. Our capital markets correspondent Tommy Stubbington has been following this and says there’s one area in particular investors are watching.

Tommy Stubbington
Possibly the most extreme form of sanctions in terms of their impact on the Russian stock market would be an outright ban on trading Russian stocks or Russian bonds on the secondary market, which would make it effectively impossible for western investors to hold those assets. Now we’re not there yet, but I mean, obviously any outside risks that investors see will lead to investors effectively dumping the Russian assets that they hold, and they do hold those assets largely because they are included in the indices, the investment benchmarks, the billions and billions of dollars of investments follow.

Marc Filippino
Now how insulated is the market overall? And is it likely that the Kremlin would react?

Tommy Stubbington
Share price declines, on their own, are probably something that I imagine the Kremlin wouldn’t be too worried about. They’d be more worried about the sanctions hurting at the level of the whole economy. And on that basis, the Russian economy is fairly well insulated from sanctions by the high level of dollar reserves that their central bank holds, which, you know, should be able to protect the rouble from any kind of run from overseas investors. And so the answer is the, you know, the Russian economy is certainly more sanctions-proof than possibly it was in the past.

Marc Filippino
Tommy Stubbington is the FT’s capital markets correspondent.

[MUSIC PLAYING]

You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript has been automatically generated. If by any chance there is an error please send the details for a correction to: typo@ft.com. We will do our best to make the amendment as soon as possible.

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Content: German suppliers applying for payments from special gas levy

Twelve gas suppliers in Germany have registered claims for payments from funds to be collected under a new gas levy to be charged to consumers between October 1 and March 2024, the country’s gas market operator Trading Hub Europe (THE) said.

The 12 companies, which include Uniper SE, RWE Supply & Trading GmbH and SEFE, the former Gazprom Germania GmbH, have made claims totaling 34 billion euros ($34 billion), according to THE.

“This does not yet represent an audited claim,” the gas market operator noted on Monday. The figure is a forecast — the actual levy passed on by companies to consumers could be higher or lower.

A spokesperson of energy company RWE told the German press agency (dpa) that the registration was a legal formality, Xinhua news agency reported.

“However, the company will not assert this claim. Nor does RWE plan to assert it in the future.”

Gas prices in Europe are almost three times as high as before the start of the Russia-Ukraine conflict. European TTF (Title Transfer Facility) gas futures were trading at around 290 euros per megawatt hour on Monday.

At the end of July, Russia further reduced gas supplies to Germany through the important Nord Stream 1 pipeline. The flow of gas is currently at 20 per cent of capacity, according to the latest update by the Federal Network Agency (BNetzA).

To ease the burden on consumers, the German government plans to reduce the value-added tax on gas from 19 to 7 per cent for as long as the gas levy applies.

“With this step, we are providing relief to gas customers that is far greater on the whole than the additional amount that arises due to the surcharges,” Chancellor Olaf Scholz said last week when announcing the measure. (1 euro $1)

20220823-024803

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This policy, accelerated after the Fukushima disaster in 2011, was closely linked to Germany’s ambition to achieve carbon neutrality by 2045 and to address public concerns about nuclear safety and radioactive waste .

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German value depends on US$20 billion of Russian gas

Opinion

German value depends on US$20 billion of Russian gas

Perhaps the best summary of just how immensely profitable it was for Germany to do business with Russia was an analysis by renowned expert Zoltan Pozsar, who presented a chart showing how “$2 trillion of German value depends on $20 billion of Russian gas”. Writes Drago Bosnic

For at least three decades Germany enjoyed an unprecedented period of energy security, one which made it possible for the Central European country to flourish, further dominating the old continent. It didn’t take long for this economic power to translate into political influence and help Berlin expand even further, particularly in Eastern Europe. And yet, by late February 2022, Germany’s “dream economy” came to an abrupt end thanks to its suicidal sanctions against Russia, which haven’t only proven futile, but also quite self-harming. Berlin severely underestimated the importance of access to cheap Russian energy, particularly natural gas which helped power much (if not most) of its export-oriented economic strategy.

Perhaps the best summary of just how immensely profitable it was for Germany to do business with Russia was an analysis published back in August last year, authored by Zoltan Pozsar, a renowned economic and financial expert. In his thought-provoking report, Pozsar also presented a chart showing how “$2 trillion of German value depends on $20 billion of Russian gas”. The wording was carefully chosen and it isn’t there just to be amusing. Essentially, Germany was making approximately a hundred times greater profit thanks to cheap commodities, particularly Russian natural gas, to run its export-driven economy at bargain prices.

With this now gone for years or even decades to come, Germany’s “economic miracle” has effectively become yet another footnote in history books. According to a Reuters report, published on January 30, Allianz Trade presented a study that cited contract expiries and delayed wholesale pricing effects and found that German industry is set to pay approximately 40% more for energy in 2023 than in 2021, before the energy crisis triggered by the political West’s failed economic siege of Russia.

“The large energy-price shock still lies ahead for European corporates,” Allianz Trade (better known as Euler Hermes until last year) claims.

The report states that higher corporate utility bills last year were contained as long pass-through times from wholesale markets and government interventions mitigated the immediate hit from surging prices as Russia’s energy exports to the West were disrupted due to the imposition of self-defeating sanctions by the European Union. The European Central Bank (ECB) stepped in to fund the resulting budget deficits, which effectively means that, despite the official stance and Russophobic posturing, it was directly funding Moscow’s massive financial build-up. However, Allianz Trade estimates that as the pass-throughs are ending, meaning the price increases will soon hit EU corporate profits by 1-1.5% and lead to lower investment, in Germany’s case this would amount to €25 billion (approximately $27 billion).

And while the report claims that German corporate finances are robust and that a state-imposed natural gas price cap allegedly might help, it’s extremely likely to make things much worse. This doesn’t only include the fact that it’s exceedingly difficult to physically replace Russian natural gas with a readily available (much less affordable) alternative, but is also simply impossible for certain EU members such as Hungary, which is landlocked and couldn’t rely on port terminals for seaborne LNG shipments. To make matters worse, such alternatives are also at least five times more expensive than Russian natural gas, which is effectively destroying the EU’s already dwindling industrial competitiveness on the global markets. Many EU officials have already expressed their frustration with the US due to this, with some high-ranking leaders in Brussels accusing Washington DC of profiteering at the expense of the increasingly troubled bloc.

Although the report insists that fears of crisis leading to deindustrialization and loss of competitiveness against the United States were overdone due to labor costs and exchange rates having a higher impact on manufacturing than energy prices, the same is not true in regard to other countries around the world. The exporters are losing market shares in areas such as agriculture, machinery, electrical equipment, metals, transport, etc. and the main beneficiaries tend to be Asian, Middle Eastern and African companies, not American ones, the report admits. This effectively means that EU corporations will not only lose their global market share, but could also eventually start losing it in Europe itself, as the already high manufacturing costs in the EU will be even higher due to surging energy costs, which are affecting both citizens and companies.

On Saturday, the economy ministry stated that the German government’s one-time subsidy to help private households and small businesses with gas prices – the first stage of a package that will be complemented with retroactive price caps kicking in in March – has cost €4.3 billion so far.

Germany has earmarked €12 billion for this purpose, but the government states that the €4.3 billion is not the final cost as many eligible companies are yet to apply. With the end of February being the deadline, they have exactly a month to do so.

Blitz’s Editorial Board is not responsible for the stories published under this byline. This includes editorials, news stories, letters to the editor, and multimedia features on BLiTZ

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Prior to the phase-out, nuclear power accounted for approximately 10-13% of Germany’s electricity generation, making it a significant zero-emission energy source within the national grid .

Title:

Content: 22 Apr, 2024 13:24

Fossil fuel era ending – Scholz

Despite ambitious plans to phase out Russian gas, the EU increased purchases in 2023, Reuters reported earlier this month

The predominance of fossil fuels in global energy output is nearing its end, German Chancellor Olaf Scholz has claimed, adding that his country aims to produce 80% of its electricity from renewable sources by 2030.

German industry had for decades relied on relatively inexpensive Russian gas, and to a lesser extent oil. However, following the start of the Ukraine conflict in February 2022, energy imports from Moscow fell dramatically, adversely affecting the competitiveness of many German businesses.

In 2020, the European Union unveiled its Green Deal strategy for the bloc to become climate-neutral by the middle of the century.

Speaking at the opening ceremony of the Hanover trade fair on Sunday, Scholz said that the “era of fossil fuels is coming to an end.” German industry will have to reorganize its operations, but not all technological processes allow for swift decarbonization, according to the chancellor.

The German leader stated that “modern, highly-flexible and climate-friendly power plants” were currently being built across the country to replace traditional power sources. Scholz also said that Norway would provide Germany’s industry with “clean energy from wind and hydropower.”

Eighty percent of the nation’s electricity is expected to come from renewables by 2030, including solar power and both onshore and offshore wind, he added.

Scholz said the two years since the start of the Ukraine conflict have been “turnaround years” for Europe, allowing it to “address the necessary changes” to its energy supply.

The EU aims to completely wean itself off Russian fossil fuels by 2027. Last Friday, however, the bloc’s Agency for the Cooperation of Energy Regulators released a report warning against drastic reductions of imports of liquefied natural gas (LNG) from Russia.

In 2023, Russia emerged as the EU’s second-biggest LNG supplier after the US, accounting for 16% of the bloc’s imports.

Earlier this month, Reuters cited calculations based on the EU’s trade statistics as showing that Brussels increased natural gas purchases from Russia in 2023.

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Content: German suppliers applying for payments from special gas levy

Twelve gas suppliers in Germany have registered claims for payments from funds to be collected under a new gas levy to be charged to consumers between October 1 and March 2024, the country’s gas market operator Trading Hub Europe (THE) said.

The 12 companies, which include Uniper SE, RWE Supply & Trading GmbH and SEFE, the former Gazprom Germania GmbH, have made claims totaling 34 billion euros ($34 billion), according to THE.

“This does not yet represent an audited claim,” the gas market operator noted on Monday. The figure is a forecast — the actual levy passed on by companies to consumers could be higher or lower.

A spokesperson of energy company RWE told the German press agency (dpa) that the registration was a legal formality, Xinhua news agency reported.

“However, the company will not assert this claim. Nor does RWE plan to assert it in the future.”

Gas prices in Europe are almost three times as high as before the start of the Russia-Ukraine conflict. European TTF (Title Transfer Facility) gas futures were trading at around 290 euros per megawatt hour on Monday.

At the end of July, Russia further reduced gas supplies to Germany through the important Nord Stream 1 pipeline. The flow of gas is currently at 20 per cent of capacity, according to the latest update by the Federal Network Agency (BNetzA).

To ease the burden on consumers, the German government plans to reduce the value-added tax on gas from 19 to 7 per cent for as long as the gas levy applies.

“With this step, we are providing relief to gas customers that is far greater on the whole than the additional amount that arises due to the surcharges,” Chancellor Olaf Scholz said last week when announcing the measure. (1 euro $1)

20220823-024803

RELATED ARTICLES

**Advantages and Disadvantages of the Nuclear Phase-Out** The primary advantage cited for the nuclear phase-out is the alignment with Germany’s long-term climate and safety goals.

**Advantages and Disadvantages of the Nuclear Phase-Out** The primary advantage cited for the nuclear phase-out is the alignment with Germany’s long-term climate and safety goals.

**Advantages and Disadvantages of the Nuclear Phase-Out** The primary advantage cited for the nuclear phase-out is the alignment with Germany’s long-term climate and safety goals.

The government and the Green Party argue that nuclear power is neither green nor sustainable, emphasizing the unresolved issue of radioactive waste and the risks associated with nuclear accidents .

The phase-out is also intended to accelerate the transition to renewable energy, with the government targeting 80% of electricity from renewables by 2030 and net-zero emissions by 2045 .

Title:

Content: Home / News / World /  Germany quits nuclear power; shuts final 3 plants
Back

Germany has shut its final three nuclear plants, marking the end of the country's end of nuclear era that has spanned more than 60 years.

Nuclear power has long been contentious in Germany.

The move has come as Germany's eyes achieve its green goal. Steffi Lemke, Germany’s Federal Minister for the Environment and Consumer Protection and a Green Party member, "The position of the German government is clear: nuclear power is not green. Nor is it sustainable".

Closure of three nuclear plant's history:

Germany shut three plants-- Emsland, Isar 2, and Neckarwestheim, representing the culmination of a plan set in motion more than 20 years ago.

During the 1970s, a strong anti-nuclear movement emerged in Germany. The movement gave birth to the green party, which is now part of governing coalition.

However, it was in the 2000s the German government pledged to phase out nuclear power and start shutting down plants.

But in 2009, a new government came to power and it seemed brief as if nuclear would get a reprieve as a bridging technology to help the country move to renewable energy.

Then Fukushima happened. In 2011, an earthquake and tsunami caused three reactors of the Fukushima Daiichi power plant to melt down.

Three days later then-Chancellor Angela Merkel who was previously pro-nuclear, announced Germany would accelerate a nuclear phase-out, with older plants shuttered immediately.

Russia's invasion of Ukraine provided another plot twist.

Germany isn’t the only country committed to walking away from nuclear — Italy gave up the technology in 1990, and Lithuania recently struck a deal to dismantle its Soviet-era reactors, which have sat idle for over a decade. But in many advanced economies, nuclear is experiencing a resurgence.

On Sunday, Finland will start regular power production at Europe’s newest and biggest reactor. The 1,600-megawatt Olkiluoto-3 unit that faced years of delays had been planned to enter commercial production on Monday. France is planning to build at least six new reactors by 2050 as well as experiment with smaller, modular ones. The UK has similar ambitions. And even in Japan, after a decade of paralysis following the nuclear accident in Fukushima, the public is warming up to the use of nuclear power. The Japanese government wants to restart reactors that have sat idle since the disaster and to extend the lifespan of existing units.

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Content: Germany's gas bill surged 109% last year despite slashed buying

FRANKFURT, March 1 (Reuters) - Germany's natural gas import costs more than doubled in 2022 despite volumes being slashed by 30%, official data from the Federal Office for Economic Affairs and Export Control (BAFA) showed.

Moscow's invasion of Ukraine last February triggered a spike in energy prices and prompted Germany to seek alternatives to Russian supply while imposing measures to curb use.

Germany's import bill increased to 74.0 billion euros ($78.74 billion) from 35.4 billion a year earlier, the BAFA data showed.

Import volumes fell to 3,524,126 TJ, equivalent to 100.2 billion cubic metres (bcm), from 5,008,943 TJ a year earlier.

The average price paid at the border jumped 197.3% to 21,007.58 euros per terajoule (TJ).

The average import price in December stood at 26,050.71 euros/TJ, equivalent to 9.38 cents per kilowatt hour (kWh), and was up 74% from a year earlier.

Helping spur Germany's hunt for alternatives to Russian energy was the closure of the Nord Stream I gas pipeline from Russia last August.

Germany in response bought more piped gas from European neighbours and sought liquefied natural gas (LNG) imports, while mild weather helped curb demand.

Still, the jump in prices and concerns about supply in Germany have contributed to inflation and triggered fears of a recession in Europe's biggest economy.

($1 = 0.9398 euros) (Reporting by Vera Eckert, editing by Jason Neely)

Germany's gas bill surged 109% last year despite...

Title:

Content:   1. Skip to content
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  3. Skip to more DW sites
PoliticsGermany

Can Germany meet its ambitious wind energy targets?

February 3, 2024

Germany wants to quadruple the amount of power generated through offshore wind farms by 2030. But industry figures have cast doubt on this goal, partly due to inadequate seaport infrastructure.

https://p.dw.com/p/4c0r5

German Chancellor Olaf Scholz seems optimistic that his governing coalition — comprising his center-left Social Democrats, the Greens and neoliberal Free Democrats — will push ahead with the country's energy transition. He remains optimistic despite Germany's budget problems, despite growing bureaucratic challenges and a mood of despondency prevalent among large parts of German society.

"If we manage to achieve what we have set out to do, and I am confident that we will, then we will break with 200 years of industrial tradition and prosperity built on coal, gas and oil," said Scholz, speaking in Potsdam last Monday.

Currently, around 30% of German electricity is still generated by burning coal and gas. Wind turbines, meanwhile, generate almost half of the country's power. The government aims to shift to fully climate-neutral electricity production primarily by establishing large wind farms far out in the North and Baltic Sea.

So far, some 1,500 turbines — up 300 meters (nearly 1,000 feet) tall — have already been installed out at sea, where they can rely on strong and continuous wind. Taken together, they supply around 8.5 gigawatts of electricity. The plan is to increase the power output to 30 gigawatts by 2030.

Overly ambitious targets?

To reach this goal, Germany will have to quadruple the amount of power generated by wind turbines in just six years. Wind industry representatives, however, have warned that this could be difficult.

According to the German Wind Energy Association, only 27 new wind turbines were connected to the power grid in 2023. And several trade associations warned in a joint statement that "In order to achieve the statutory expansion targets, the expansion [of wind energy] must increase drastically by 2030."

In a  recent letter, Germany's Federal Maritime and Hydrographic Agency warned that establishing certain North Sea grid connections could be delayed by up to two years due to converter construction bottlenecks.

Are floating wind farms more efficient?

Stefan Thimm, head of Germany's Federal Association of Offshore Wind Energy, said "if this situation materializes or turns out even worse, it will call into question the agreed expansion targets and send a signal of uncertainty into the value chain."

Seaports key to meeting infrastructure challenges

Producing electricity through offshore wind farms is one thing, but transporting said electricity to shore through huge power cables is quite another. And so, too, is installing the large converters that turn alternating into direct current so that the electricity can be sent from northern Germany to the country's industrial heartland in the south and west.

Experts estimate that an area equivalent to the size of 270 soccer fields will soon have to be made available in German ports to grow the wind power sector.

"Seaports are key offshore wind energy hubs," said Karina Würtz, managing director of the Offshore Wind Energy Foundation. She added that they are crucial for constructing and dismantling wind farms, act as service ports for operation and maintenance and as storage and production sites.

Germany lagging behind Netherlands, Denmark

Würtz pointed out that neighboring countries like the Netherlands and Denmark have been much faster and more effective at building out their wind infrastructure.

"While the Dutch and Danish ports of Eemshaven and Esbjerg have strongly focused on the offshore wind sector in recent years and taken large market shares from German ports, the latter have increasingly turned to other business areas," she said.

Competition is fierce in the industry, with specialist converter construction companies, for example, in high demand. This is because many countries including Germany now want to grow their offshore wind power sector. Greenpeace, meanwhile, has said the German government is setting the wrong priorities, for example by investing a lot of money in liquefied natural gas(LNG) terminals.

"Instead of building completely unnecessary LNG terminals at a dizzying speed, Olaf Scholz should concentrate on setting up offshore wind farms […] to make up for delays as soon as possible," Martin Kaiser, an energy and climate expert at Greenpeace, told DW.

Kaiser said it was unacceptable that Germany's lack of converter stations and the chancellor's misplaced priorities meant Germany was failing to meet its renewable energy targets. The government built the LNG terminals after Russia's invasion of Ukraine in early 2022 brought the flow of Russian gas into Germany to an end, forcing the country to import gas from several different countries instead.

Rügen residents protest LNG terminal growth in Baltic Sea

Germany lacks funds for wind

Yet the government lacks the funds to grow its offshore wind sector, as it would need to take out fresh loans. This, however, is strictly prohibited by law.

Establishing a special fund to support the sector — akin to Germany's special armed forces fund — would be a possibility. German Economy Minister Robert Habeck of the Greens, also in charge of the climate portfolio, suggested setting up such a fund in the Bundestag last week to grow the wind power sector and tackle other issues.

Habeck's proposal, however, was immediately rejected by the opposition and also his coalition partner, the neoliberal Free Democrats.

This article was originally written in German

Jens Thurau Jens Thurau is a senior political correspondent covering Germany's environment and climate policies.@JensThurau

However, the disadvantages are substantial.

However, the disadvantages are substantial.

The removal of nuclear power has created a significant gap in the energy mix, previously filled by a stable, low-carbon source .

To compensate, Germany has increased its reliance on coal and natural gas, including keeping coal-fired plants operational or extending their lifespans, which directly conflicts with climate objectives and increases carbon emissions .

Title:

Content: Industry Voice: Energy independence drive could impact renewables adoption

• 6 min read

The devastating war in Ukraine has dramatically increased the need for energy independence in the European Union, which today announced a plan to reduce its reliance on Russian gas. This will require more use of fossil fuels in the short term, but long-term should accelerate the switch to renewables.

Amidst the horrifying war in Ukraine and the likely escalation of sanctions, European governments are rushing to find ways to reduce their dependence on Russian gas, through reopening or delaying closure of coal plants in Europe, and finding other sources of gas. Near-term, emissions and costs will rise as a result.

Simultaneously, countries and companies are looking for ways to mitigate their exposure to higher oil and gas prices through greater efficiency, more use of lower-cost alternatives such as renewables and investment in nuclear.

‘The wind and sun belong to no one' German economy minister and Green Party member Robert Habeck noted recently.

The International Energy Agency last week launched a 10-point plan on how to reduce reliance on Russian gas, advocating measures such as rerouting to other gas suppliers, increasing gas storage, accelerating wind and solar development, maximising existing generation from bioenergy and nuclear power, and speeding up the rollout of heat pumps to replace gas boilers. And today, the EU announced a plan for achieving energy independence "well before 2030" through greater use of LNG and energy storage, and swifter adoption of renewables.

In the long term, therefore, we expect the increased emphasis on energy independence, in addition to the structural move towards ‘net zero', to accelerate the energy transition.

Emissions likely to rise in the near term

In the short term, the push for independence will generate higher emissions given the EU's current energy mix (see chart 1). The EU relies on Russia for 40 per cent of its gas (90 per cent of all its gas is imported). The supply gap cannot be entirely filled by switching to alternative gas providers, and it takes time to build wind and solar plants. So it will have to consider other fossil fuels.

Germany, for example, has announced that it could delay the planned closure of some coal-fired plants and even consider extending the life of nuclear plants, though legal and technical impediments may make this impossible. Germany decided to phase out its nuclear capacity in 2011, following the Fukushima disaster - a decision that made the country more reliant on Russian gas.

In Italy, meanwhile, Prime Minister Mario Draghi has said the country would consider re-opening coal plants, and is seeking to increase domestic gas production, which had fallen in recent years. Enel, Italy's biggest utility, has been closing coal-fired plants in line with its targets for a complete exit from coal by 2027, and has so far not revealed any plans to re-open coal. We engaged with the company last week and it remains committed to its long-term goals for decarbonisation while acknowledging the near-term uncertainty. It has also announced that it will change plans to convert two coal-fired plants to gas, and will instead explore the possibility of re-purposing them into renewable energy storage infrastructure.

European utilities generally are likely to increase energy storage for both gas and renewables as well as sourcing more gas from North Africa and the Middle East.

Accelerating renewables to achieve independence and net zero

As well as seeking alternative sources of fossil fuels, European countries have signalled long-term plans to accelerate the move towards net zero.

Germany, which previously had a net zero target of 2040, has now brought this forward to 2035, and believes it can achieve 80 per cent of its target by 2030. German climate minister Oliver Krischer tweeted about the change as a way to stand with Ukraine. Other European countries have indicated similar intentions, though so far, no others have re-stated their net zero target.

At the time of writing, there has been little actual disruption of oil and gas supply to Europe. However, countries are positioning themselves for that eventuality and prices have risen significantly as a result. This provides further incentive to switch to lower-cost power.

Over recent years, the building and operational cost of renewable technology has fallen significantly, making an acceleration of net zero targets financially feasible. The cost of solar energy, for example, has fallen by around 80 per cent in the last 10 years. An increase in investment and the application of engineering expertise in highly skilled economies like Germany could drive costs down further. Planning approval processes could also be expedited to reflect the urgency of the geopolitical and environmental need.

Obstacles remain

That said, the prices of mainstream commodities needed for the transition (such as steel and aluminium) were already rising prior to the invasion of Ukraine on the back of high demand post Covid-19, and have risen even further in the last few weeks.

Rare metals needed for electric motors, photovoltaic cells and batteries could be particularly sensitive to price squeezes as production is concentrated within two countries - Russia and China. Retaining access to these key supply chains will be critical to a successful transition to renewables.

Intermittency, meanwhile, remains an issue. The irregular output of wind and solar assets means significant advances in storage technologies will be necessary to drive universal adoption.

Following the Ukraine invasion, markets are beginning to reflect this increased need. For example, recent moves in share prices of hydrogen electrolysis stocks suggest some investors now believe this technology, as yet unproven at scale, will one day provide part of the answer.

As the war continues to unfold in Ukraine, the benefits of moving away from an energy system dependent on imported fossil fuels have become even clearer. While there are still challenges ahead for the transition, we can hope that in the not-too-distant future, Europe's energy grid will be both cleaner and more self-sufficient.

This post is funded by Fidelity International

Important information

This information is for investment professionals only and should not be relied upon by private investors. The value of investments and the income from them can go down as well as up and you may not get back the amount invested.  Investors should note that the views expressed may no longer be current and may have already been acted upon. Changes in currency exchange rates may affect the value of investments in overseas markets. Investments in emerging markets can be more volatile than other more developed markets. A focus on securities of companies which maintain strong environmental, social and governance ("ESG") credentials may result in a return that at times compares unfavourably to similar products without such focus. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for illustration purposes only. Issued by FIL Pensions Management, authorised and regulated by the Financial Conduct Authority and Financial Administration Services Limited, authorised and regulated by the Financial Conduct Authority. Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited. UKM0322/370541/SSO/NA

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Content: 11 Feb, 2024 13:59

German industry ‘moving abroad’ – Bild

A growing number of manufacturers are relocating operations outside the country, an industry lobby warns

One in three German manufacturers is considering moving production to other countries amid economic troubles, double the number recorded in 2022, Bild news outlet reported on Saturday, citing Siegfried Russwurm, the head of the Federation of German Industries (BDI).

According to the report, among the latest firms planning to relocate is household appliance manufacturer Miele, which plans to cut 2,000 jobs in Germany and move 700 positions to its site in Poland. Heating manufacturer Viessmann had already moved 3,000 jobs to Poland.

Volkswagen said last year that it would build a new battery factory in the US, and BASF announced plans to invest €10 billion in a petrochemicals plant in China amid job cuts at its headquarters in Germany. French steel pipe manufacturer Vallourec shut down production in Germany in September last year, while tiremaker Michelin and its US rival Goodyear said they would also close their German plants by the end of 2025.

Russwurm says that a growing number of companies have reported that their “patience with Germany is at an end.” According to him, the slowdown in economic growth and high rates of inflation, especially with regard to energy, have resulted in less investment, and Berlin lacks a strategy to turn the situation around. This in turn leads to a gradual decline in manufacturing, he said, and while existing production lines may continue to operate for a while, “new ones are no longer being built in Germany.”

Many companies point to the high energy prices, which soared after Germany lost access to Russian natural gas in 2022, as one of the major causes of their problems. This was exacerbated by Berlin’s decision to phase out nuclear energy and coal and switch to renewables, which, according to Russwurm, put manufacturers working in Germany at a significant disadvantage compared to other industrialized nations.

“Nobody can say with any certainty today what our energy supply will look like in seven years’ time, and that’s why no one can say how high energy prices will be in Germany then. For companies that have to make investment decisions, that is absolutely toxic,” he said in an interview with the Financial Times earlier this week, adding that the government is making mistakes regarding its energy policy with its ambitious climate agenda, which aims to achieve carbon neutrality by 2045 and switch 80% of power output to wind and solar energy by 2030.

“Companies are saying they are finding it increasingly difficult to do any long-term planning. They have great doubts about continuing to invest in Germany under these conditions. The conditions are better elsewhere. And they’re going abroad,” Russwurm said.

For more stories on economy & finance visit RT's business section

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Germany’s Energy Risks Are Fading, For Now

  • Falling gas prices and high inventories have restored economic optimism across Europe.
  • German Chancellor Olaf Scholz said the country is now rejiggering supply chains that will increase capacity for LNG imports at major ports.
  • Germany's Economic Ministry warns that though the country is reducing dependence on Russian gas, there are risks later this year that storage could sink to dangerously low levels.

Some European politicians and economists are breathing a sigh of relief after mild temperatures, increasing liquefied natural gas shipments, and above-average natural gas stockpiles have so far averted a worsening energy crisis this winter. Other politicians believe the energy crunch won't be over for many years.

"Gas storage is up and gas prices are down. Inflation is falling and uncertainty is declining," Deutsche Bank AG wrote in a note this week, adding, "We can afford to be more optimistic."

As of late, Europe's biggest economy, Germany, has seen an improvement in business outlook as recession fears recede, according to data from the Ifo Institute, a Munich-based economic researcher.

Ifo President Clemens Fuest told Bloomberg TV:

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"The most important risk for the German economy was a gas-rationing scenario ... and that risk is off the table now."

There's a lot to be happy about in Europe: Dutch front-month NatGas, the continent's benchmark, slid as much as 5% to 55 euros a megawatt-hour today, the lowest level since late 2021. Prices have collapsed by more than 83% since peaking at 311 euros a megawatt-hour last August.

However, the optimism could be short-lived because Germany is years from entirely substituting Russian NatGas flows with LNG shipments.

Last week, Chancellor Olaf Scholz told Bloomberg that German learned a hard lesson in its addiction for cheap Russian NatGas. He said the country is now rejiggering supply chains that will increase capacity for LNG imports at major ports.

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A new report via the country's Economy Ministry shows Germany will install 56 billion cubic meters of domestic LNG import capacity by 2026. By 2030, capacities will increase to 76.5 billion cubic meters or about 80% of total German NatGas consumption in 2021.

The ministry pointed out that even though current NatGas storage facilities are above normal levels, there are mounting risks later this year that storage could sink to dangerously low levels and result in shortages.

"The truth is, there won't be enough in the next three to four years of LNG production capacity in the world to meet the growing demand. So the unspoken strategy is that Germany will continue to pay crazy prices and other, less rich countries go empty-handed," Christian Leye, a Bundestag Left Party representative, told Bloomberg.

Germany has reduced its dependence on Russian NatGas by importing LNG from other EU countries and increasing NatGas pipeline flows from Norway and the Netherlands. Germany didn't have a choice after explosions rocked Nord Stream last year. An issue we see is that Germany's NatGas storage was filled last summer when Russian NatGas was still flowing -- not so much anymore.

Deutsche Bank expects EU NatGas prices to fluctuate between 50 and 100 euros a megawatt-hour this year. It's only a matter of time before the temporary relief evaporates and the energy crisis resurfaces.

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A 2019 study estimated the social cost of replacing nuclear with coal at approximately $12 billion annually, primarily due to increased mortality from air pollution .

Title:

Content: Quitting coal: US, UK lead race; India, China face budgetary hurdles

Coal-dependent countries such as China, India and Bangladesh also need to manage rapidly growing energy demand

Coal-dependent countries around the world face two wickedly interlinked challenges: accelerating the phase out of coal to prevent catastrophic global warming, while sustaining economic prosperity and political support.

As UN Secretary General Antonio Guterres recently said, keeping global warming close to 1.5 degrees requires all new coal investments to stop now with coal phased out in OECD economies by 2030 and everywhere else by 2040.

Energy supply and economic impacts of the war in Ukraine have clearly made these tasks even tougher. But the war has also provided a powerful reminder of the huge strategic and environmental risks of fossil fuel addiction.

Explained | COP27: India’s agenda, prospects, $100-B climate financing issue

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Quitting coal need not end in economic crisis, nor energy shortages. Not quitting coal will certainly end in climate and therefore economic disaster. Researchers have systematically reviewed the policies of nations well down the path of transitioning away from coal, providing guidance on what works.

Demand, supply side policies

Governments quitting coal in a rapid, just and orderly manner have commonly employed a proactive, collaborative and well-coordinated mix of demand and supply-side policies. Key demand-side policy levers include carbon pricing mechanisms; reducing energy consumption and improving energy efficiency. And providing strong financing and infrastructure support for the rapid expansion of renewable energy.

Supply-side policies such as accelerating coal industry closure through removal of subsidies and through direct regulation, taxation and export licensing are also vital. Regulatory actions to overcome the negative impacts of coal on air quality, health and environmental outcomes often play a key role. So too do mission-oriented industry policies driving economic renewal and job creation.

The European Union remains strongly focused on phasing-out coal by 2030. More than USD 92.9 billion has been allocated to strengthen skills and job opportunities in coal-dependent regions. These funds will also help leverage billions of dollars in private sector finance for clean energy infrastructure and technology.

What others are planning

German Chancellor Olaf Schulz recently proposed the German coal phase out date be brought forward to 2030. The German Coal Commission, comprising government, business and union stakeholders has suggested USD 46.2 billion is needed to support coal dependent workers and communities.

Spain has underpinned its ambitious coal phase-out and renewable energy goals with over USD 289 million for Just Transition contracts covering early retirement, re-employment, environmental regeneration and green industry investment and employment goals and strategies.

In Australia, the new Labor government has backed its upgraded greenhouse gas emissions reduction goal with a National Energy Transformation Partnership to coordinate and integrate national and state government energy transition investments.

The government also announced a USD 1.2 billion and Powering the Regions fund to assist traditional and new industries in regional Australia harness the economic opportunities of decarbonisation.

The best transition plan

The economic and job creation potential of a well-managed transition from fossil fuels to renewables is now well demonstrated.

Employment in renewable energy rose to 12.7 million in 2022, an increase of over 700,000 jobs. The International Energy Agency has estimated that more than 30 million jobs could be created in clean energy, efficiency and low-emissions technologies by 2030.

Also read | COP27 in Egypt: Scotland weather, Ukraine war to impact talks, warn experts

Importantly, as ILO Director-General Guy Ryder said, there is a growing focus on the quality of jobs and the conditions of work in renewable energies. The increasing share of female employment suggests that dedicated policies and training can significantly enhance the participation of women in renewable energy occupations and ultimately achieve a just transition for all.

In Germany, collaborative planning and long-term investment in infrastructure; education; environmental technologies; and cultural and service industries has been an essential foundation for economic diversification and job creation in coal dependent regions such as the Ruhr Valley.

In the United States, investment flowing from President Bidens Inflation Reduction Act will create over 550,000 new jobs in industries producing renewable energy. And in Australia, renewable energy think tank Beyond Zero Emissions has demonstrated the potential for low-cost renewable energy to create new export earnings of over AUD$300 billion and over one million new jobs.

The challenge is ensuring those national level economic gains extend to coal-dependent regions where workers and communities are too often left behind.

Workers and communities

Broad public support for replacing coal depends crucially on communities and workers being convinced that governments and business are genuinely committed to the creation of secure high-quality jobs.

The Paris Climate Agreement asks committed countries to take into account the imperatives of a Just Transition of the workforce and the creation of decent work and quality jobs in accordance with nationally defined development priorities.

Also read: Despite solar push, India’s coal production hits a new milestone of 382 MT

International Trade Union Confederation General Secretary Sharon Burrow reminds us that a just transition will not happen by itself. It requires plans and policies. Transformation is not only about phasing out polluting sectors, it is also about new jobs, new industries, new skills, new investment and the opportunity to create a more equal and resilient economy.

Canada strengthened support for closing all coal-fired power stations by 2030 by working closely with coal dependent communities and provided integrated investment, infrastructure, training and employment packages.

By listening closely to workers, Canada’s 2018 Coal Transition Task Force found deep local knowledge and built local support for its coal exit target.

In Australia, increasing awareness of the inevitability of the closure of coal fired power stations has strengthened support in coal dependent communities like the Latrobe Valley in Victoria and Gladstone in central Queensland for a far more proactive approach to creating new economic futures and opportunities.

Diversification issue

Amanda Cahill, CEO of The Next Economy, says local governments all over Australia in coal regions are taking the reins because they are seeing change now. We are seeing mines that have been approved but not funded. Were seeing early closures of power plants.

The biggest question is, how do you diversify those regional economies? Gladstone is a really great example because there are so many opportunities people are starting to explore. It is not just the renewable energy; it is what we could do with that renewable energy.

It is things like green hydrogen, its manufacturing renewable energy parts, its looking at land use differently. And this is what is happening all over Australia.

Understand and respect national and regional differences

Successful strategies for accelerating the just and well managed phase out of coal need to be informed by clear understanding of the diverse economic and social histories of coal dependent countries and regions.

Countries leading the coal exodus such as the US, UK, Germany, Spain and Canada have often had access to relatively cheap alternatives. And they are able to finance new energy infrastructure and support for workers and communities in coal-dependent regions.

Coal-dependent countries such as China, India and Bangladesh also need to manage rapidly growing energy demand. They face budgetary challenges in financing renewable energy and supporting regional communities.

Also read: Time to act faster on climate change: Rishi Sunak at COP27

That is why developed economies have a strong practical as well as ethical case to help fund developing economies to achieve a rapid and orderly transition.

Coal exporting countries including Australia, Colombia and Indonesia also face tough challenges in generating alternative sources of export income. And overcoming the power of vested interests.

There is increasing awareness in these countries, however, of the potential for low-cost renewable energy to underpin new low emissions export industries such as green steel and green hydrogen.

Making it happen

How do nations turn the rhetoric of just transitions into a reality while sustaining economic prosperity and maintaining political support?

By delivering on the following: Strong, proactive and collaborative political leadership; respectfully engaging coal communities and workers; a well coordinated mix of demand and supply-side policies; transition governance authorities enabling local engagement and accountability; adequately funding re-employment and retraining programs, economic renewal and diversification policies building on regional strengths; mobilising investment at the scale required to create high-quality jobs in just and resilient zero-carbon economies.

(With inputs from agencies)

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This shift has been described as a public health emergency, with air pollution from coal contributing to respiratory illnesses and premature deaths, particularly in communities near coal plants .

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Content: World

Berlin against, Rome is silent, Paris in favor. Nuclear power explodes in the EU

Germany closed three reactors in 2021 and plans to do the same with the other three in 2022. Belgium shares the same idea, “shut down” its seven plants by 2025. Spain, which has some reactors in operation as well, does not consider them “green” at all. Luxembourg dismisses the proposal to include the atom in the green taxonomy as a “provocation”. Austria of the atom does not want to know, with 82% of its primary energy production made from renewables (data 2019), and is studying a legal action against the Commission. France is delighted to see nuclear power (77% of its domestic production) taken into account by Brussels. Italy, which is fond of Minister Cingolani’s idea of increasing its gas extractions, is currently silent and at least hopes for a golden rule to exclude “green” investments from the calculation of the deficit. A few days after the publication of the draft of the European Commission on the green taxonomy, the distances between the 27 instead of narrowing, are widening and if yesterday they seemed divided, today they show themselves to be shattered.

The definition of the green taxonomy is fundamental in orienting investments: with the “green” stamp, industrial and infrastructure projects can be much more attractive for private capital. However, the decision to include nuclear and gas in the EU’s green taxonomy has met with harsh criticism already in recent weeks, when rumors had not yet taken the form of a draft Commission. The technicians from Brussels and the team of experts who collaborated in the drafting of the central document for the definition of the EU energy planning in the context of the Green New Deal tried to circumvent the foreseeable resistance by introducing some conditions for the two sources that are not neutral with respect to the climate and the environment. Nuclear and gas, first of all, will be considered compatible with the green taxonomy only for a defined period of time and “to the extent that they contribute to the transition towards climate neutrality and do not significantly damage the environment”, according to an official of Brussels. “The Commission sees the future energy mix as a predominantly renewable or low-carbon energy system. We really hope that this proposal will help bring about the change we need and channel private funding towards low-emission energy sources ”.

In fact, it means that investments in nuclear power will be “green” only if the projects presented have a well defined plan, funds and site for the disposal of radioactive waste in total safety. Building permits will only be allowed until 2045. It is worth remembering that at the moment there is still talk of third generation or third plus nuclear power. Not the fourth, the (slag-free) fusion that experts believe may have a role on an industrial scale no earlier than the middle of the century. As for gas, investments in power plants will be green only if they contribute to emissions of less than 270 grams of CO2 equivalent per kWh and replace more polluting fossil fuel plants. They will need to obtain a building permit before 2030.

On gas, the Commission’s conditions appear much more stringent. It is a non-solid fossil source, certainly less polluting than coal and to which Italy looks with interest, having unused methane deposits. Moreover, in a European context of high prices and constant reduction of supplies from the main supplier, Russia, for reasons of a geopolitical nature. But it is on nuclear power that the clash risks worsening at the community level.

“We believe nuclear technology is dangerous,” government spokesman Steffen Hebestreit told reporters in Berlin, noting that the question of what to do with the radioactive waste remains unresolved. Hebestreit added that Germany “expressly rejects” the EU assessment on atomic energy and has repeatedly affirmed this position towards the Commission. Germany is now considering the next steps to take. Germany is set to shut down the remaining three nuclear power plants later this year and phase out coal by 2030, while its neighbor France aims to modernize existing reactors and build new ones to meet energy needs. Berlin plans to rely on natural gas until it can be replaced by non-polluting energy sources. The opposite paths taken by two of the EU’s largest economies have led to an embarrassing situation for the Commission. The draft EU executive branch concludes that both nuclear power and natural gas can be considered sustainable under certain conditions for investment purposes.

Hebestreit said the German government’s goal is to use natural gas only as a “bridge technology” and replace it with non-polluting alternatives such as hydrogen produced from renewable energy by 2045, the deadline the country has set for becoming climate neutral. . The spokesman did not say whether Chancellor Olaf Scholz supports the opinion of the Minister of Economy and Climate Robert Habeck that the European Commission’s proposals are a form of “greenwashing”.

Germany has pulled the plug on three of its last six nuclear power plants. The Brokdorf, Grohnde and Gundremmingen C reactors, operated by the E.On and Rwe utilities, were closed on December 31st after 35 years of operation. The last three nuclear power plants – Isar 2, Emsland and Neckarwestheim II – will be shut down by the end of 2022. However, closure does not mean decommissioning, which will take much longer and is expected to take place by 2040 in the case of Brokdorf, for example. .

In 2021, the six nuclear power plants contributed about 12% of electricity generation in Germany. The German energy mix consists of 41% renewables, 28% coal and 15% gas. By 2030, Germany aims to meet 80% of energy demand with renewables. This is not the case in France where – given Eurostat 2019 – 77.6% of its energy produced comes from the atom and only 20% from renewable.

Germany is not alone in the firm opposition to the proposal put forward by Brussels: the draft “is a provocation from a procedural point of view” and “in terms of content it hides the risk of greenwashing”, wrote on Twitter the Minister of Energy of the Luxembourg, Claude Turmes, saying he is ready to “examine the proposal in detail and discuss further steps” together with Germany and Austria, equally opposed to including nuclear power among sustainable investments. The proposal was sent to governments on Friday, “in a nocturnal and nebulous action. This says a lot about transparency ”, attacked Turmes.

The same tones used by Vienna: if these are the plans “we will sue”, wrote on Twitter the Austrian Federal Minister for Climate, Environment and Energy, Leonore Gewessler, highlighting that nuclear energy is “dangerous and not it represents a solution in the fight against the climate crisis ”. Austria has no reactors and produces almost all of its energy from renewable sources.

The Spanish government also rejected the European Commission’s proposal to include nuclear and natural gas energy in the EU’s “green” taxonomy. According to Madrid, this is “a step backwards” and “a wrong signal” for the financial markets. Deputy Prime Minister and Minister for Ecological Transition and Demographic Challenge, Teresa Ribera, stressed that “regardless of whether we can continue to invest in one or the other, we believe they are not green or sustainable energies”. Spain – he added – “is a firm supporter of green taxonomy as a key tool to have common references that can be used by investors to achieve the decarbonisation of the economy and climate neutrality by 2050”, but include nuclear and gas “It would be a step backwards,” according to the government official Sanchez. “It makes no sense and sends the wrong signals for the European energy transition as a whole,” he stressed. While admitting that both nuclear power and natural gas have a role to play in the transition, this is “limited in time”. Member States have until 12 January to provide their response to the Commission. Then, once published, it will have to pass the scrutiny of the EU Council and Parliament, where the environmentalist parties are also announcing a battle.

In 2019, France was the country that produced the largest share of energy in the EU (20% of the total), followed by Germany (17%), Poland (9.6%), Italy and Sweden (6%). ). However, the debate on green taxonomy is intertwined with energy security (or sovereignty) in a particular historical phase, marked by risks to the security of supply due to geopolitical and military reasons, as shown by the tensions on the Ukrainian border. Primary energy production in the EU in 2019 was distributed among various energy sources, the most important of which in terms of the size of its contribution were renewables, with over a third (36.5%) of the total. Second place for nuclear power, with 32.0% of total primary energy production, with France in the lead, followed by Belgium (77% of domestic production in 2019) which, however, is about to abound in nuclear power like Germany. However, all European energy production is not enough to meet its needs: more than half of Europe’s energy is imported. The EU energy dependency rate exceeds 50%.

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James Reno

Editor-in-Chief, James loves playing games and loves to write about them more. He knows a lot about entertainment because he has done a drama course. James loves writing, so he is our writer. email: james@d1softballnews.com

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**Coping Mechanisms in the Energy Market** The German energy market has faced significant challenges in coping with the loss of nuclear power.

**Coping Mechanisms in the Energy Market** The German energy market has faced significant challenges in coping with the loss of nuclear power.

**Coping Mechanisms in the Energy Market** The German energy market has faced significant challenges in coping with the loss of nuclear power.

The immediate effect has been a surge in energy prices, with one-year ahead electricity prices reaching nearly €1,000 per megawatt-hour—a 720% increase since early 2022 .

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Content: /

The Ukraine Prelude: The Real Reason Why Russia Invaded Ukraine in 2022

20 mins read

Perhaps the most troublesome part of the West’s coverage of Ukraine is its inability to understand the simplest thesis – “Ukraine was no closer to joining NATO in February 2022 than it was in 2014 (when the Crimea was annexed), or at any time in its 31-year-long history.” If anything, in February 2022, it was the furthest it has been from joining the Alliance. Anyone arguing that Ukraine’s desire to join NATO and the West’s supposed “expansion” are what provoked Putin, shows a complete ignorance of what is required for a country to join the Alliance and, frankly, what NATO itself is as an organization. To grasp these concepts, one needs to examine Ukraine as a potential NATO candidate. Prior to this examination, two concepts about NATO must be mentioned — namely Articles 5 and 10 of the NATO charter. Article 10 specifically states that in order for a country to join the Alliance, the invitation must be unanimously approved by all 30 NATO members and Article 5 explains that an armed attack on one NATO member «shall be considered an attack against all».

Now to the examination of Ukraine as a candidate. Ever since 2014, Ukraine has been at war with the regular Russian army (albeit a small part of it) and Russian mercenaries in the occupied regions of Donetsk and Luhansk (a.k.a. «Russian-backed separatists», as Western media prefers to refer to them). Separated from the entire world, the only reason as to why these so-called «separatists republics» managed to resist Ukrainian control was the constant supply of weapons, money, mercenaries and (when “things got hot”) regular Russian troops on orders from the Kremlin. With this being said, by accepting Ukraine into NATO, all 30 countries of the Alliance would automatically have found themselves at war with Russia, even prior to the 2022 invasion, which even the most anti-Kremlin countries such as Poland would have opposed. Hence, after the start of hostilities in 2014, Ukraine became ineligible for joining the Alliance, since its membership is a de-facto declaration of war on Russia. In even simpler terms, the second Ukraine joins NATO, the Alliance must take military action to reclaim Ukraine’s territories and expel Russian troops and mercenaries from Crimea, Donetsk, and Luhansk, which, in turn, entails a potential WW3. Putin, on the other hand, perfectly understands the West’s reluctance to confront a nation with nuclear weapons. Throughout modern Russian history, Putin was, for the most part, indifferent to NATO expansion as long as it didn’t threaten him politically (as exemplified by Russia’s silence on Baltic states joining the alliance in early 2000s, when Putin’s rule was considered democratic and stable). Even from a strictly militarical perspective, if Putin is successful in invading Ukraine, the distance between the Kremlin and the closest NATO country (Latvia) would still be less than 550 kilometers (Figure 1). Moreover, what even the “Western military experts” fail to understand, in the current age of nuclear weapons, is that the distances between nuclear alliances (especially Russia and NATO) play no role during an actual armed conflict. Even if at the onset of WW3 NATO was to position its forces on the Red Square, Russia would still be able to devastate all NATO countries with rockets launched from Siberia regardless of their proximity (and vice versa).

Figure 1. Map of NATO countries as of 2015 (since 2015, Montenegro and North Macedonia joined the alliance) (https://nordregio.org/maps/nato-and-non-nato-membership-in-europe-in-2015/)

Now, when it is understood that it wasn’t the threat of Ukraine’s NATO integration, which prompted the 2022 escalation, the real reasons for the full-scale attack must be determined. Here again, Western media demonstrates its incompetence with claims such as «Putin’s is going insane», «Putin wants to restore the USSR» or «the West somehow provoked Putin». That’s why, once more, a new concept must be introduced as a starting point for outlining the real reasons as to why the large-scale invasion is taking place now — «Putin and his inner circle will do anything to maximize their grasp on power». Many may argue that this is a well-known notion, and that Putin may have ordered a full-scale invasion of Ukraine anytime from 2014 to 2022, and hence it must be «Western imperialists» who provoked him to attack in 2022. To debunk, clarify, and elaborate on these claims, one needs to (for just one second) divert attention from international politics and to instead examine the internal state of affairs within Russia and its proxies Belarus and Kazakhstan. When asked about the biggest political developments within Russia, Belarus, or Kazakhstan in the last five years, any informed Russian, Belorussian, or Kazakh will list the growth of the opposition movement, imprisonment of independent journalists, assassinations or attempted assassinations of opposition leaders (the biggest story being the attempted poisoning and subsequent imprisonment of Alexei Navalny), large scale anti-government demonstrations (the largest being in 2020 Belarus, when a nation-wide protest of 600 thousand people almost overthrew a 26-year-in-power dictator and Putin’s closest ally Lukashenko), and increasing government campaigns to quell dissent. All these political developments within Russia and its proxies demonstrate that prior to the escalation, a gradual growth of the opposition movement slowly but surely eroded Putin’s grasp on Russia.

When this is understood, let’s examine Ukraine’s position in the context of Putin’s grasp on power. While it is important to know that Ukraine in its 30-year independent history has always been externally influenced by Russia and forcibly prevented from associating with the West (for one, in 2004 a pro-western presidential candidate Viktor Yushchenko was poisoned by Russian operatives during his presidential campaign), a real break in Ukraine’s «chains» to Russia came in 2014, when as a result of a revolution, a pro-Putin president Viktor Yanukovych was forced to flee Ukraine to Russia, de-facto terminating the Kremlin’s top-down control of the Ukrainian population. Since the 2014 revolution and subsequent hostilities initiated by the Kremlin, every year Ukraine grew more independent from its neighbor. Promoting democracy, gradually cutting its trade with Russia, improving its standards of living, replacing the ruling oligarchy class with democratically elected representatives and on top of all that, preventing Russian mercenaries from advancing further from occupied territories in Donetsk and Luhansk — all these factors were pivotal in making Ukraine the Kremlin’s number one target. Initially, however, due to the Ukraine’s pre-2014 dependence on Russian exports, the Kremlin’s plan was to starve Ukraine economically, force Ukraine to divert a great share of its budget to resisting Russian advance in the East, bombarding Ukraine with pro-Russian propaganda and sanctions, and sponsoring corrupt Ukrainian politicians with the goal of gradually destabilizing the country. This was an attempt of resubjugation which ultimately failed. As a result of the benefits Ukraine obtained from its close association with the EU and the West (ranging from the increase in foreign investment, a more favorable and freer economic climate, increase in military imports etc.) and, frankly, the pro-western resolve of the Ukrainian people, Russia failed to quash Ukraine’s development, further angering the Kremlin and worrying Putin. If, initially, Russia’s propaganda machine used the slogan «do you want Russia to turn into a Ukraine?» as a chant referring to Ukraine’s instability and war in the East, in the late 2010s and 2020-2021 propagandists started to avoid using the chant as by that time the rate of economic growth, real salaries and civil liberties in Ukraine matched or even surpassed those in Russia. Another aspect of Ukraine’s free existence that drove the Kremlin insane was the fact that many Russian activists, businessmen, and elites, once targeted by the Russian government for dissent moved to Ukraine to resume their business and anti-Putin activism. If, initially, the majority of Russians welcomed the annexation of Crimea, driving Putin’s ratings through the roof, by 2021 many Russian citizens seeing the current economic stagnation and crackdown on civil liberties reconsidered their position and started to contemplate the possibility of overthrowing Putin’s regime. Seeing how close Putin’s closest crony Lukashenko came to being overthrown in 2020 finalized the decision of destroying Ukraine as a state. A state which escaped from Putin’s grasp, prospered despite the Kremlin’s best efforts, and became a beacon of hope for populations trying to cut their ties with Putin.

We now need to return to examining Russia’s pre-invasion position on the world stage to understand the additional reasons as to why the full-scale attack took place in 2022. While in retrospect the Russian economy is comparable to that of Florida or to the capitalization of any of the top-5 US companies, there are several reasons why a stagnating and corrupt country managed to continue to exert influence on the world. The most important ones by far are the EU’s current dependence on Russian energy products and the West’s inability to project sufficient strength with its new policies of brokering peace agreements with dictators. While the EU’s dependence on Russian oil and gas was always a Kremlin’s economic weapon for thwarting European anti-Kremlin policy makers (who pushed for harsher sanctions on Russia), this century-long tool was now in danger of disappearing. The EU’s economic efforts aimed at diversification and large-scale investment in renewables and curtailing its use of carbon-based energy, resulted in, for the first time in the modern history, a decrease of Russian energy imports. In the 2019-2020 period, 27 EU countries demonstrated a record-breaking 2.5% increase in the share of renewables in their total energy production utilization (Figure 2.). With that, around 25% of EU’s energy needs by 2022 were fulfilled by renewables with a steady 2-3% yearly increase of the number. Because of this, the oldest and most powerful economic tool in the Kremlin’s arsenal was now at risk of becoming obsolete in the course of the next few decades. If the US managed to pass the pending legislation banning Russian gas and oil imports, which constituted 8% of its total energy needs, in five to ten years or even sooner, countries like Germany (with 30-40% of the energy supplied by Russia) would also be capable of acting likewise without a disastrous effect on their respective economies (Figure 3.). Overall, with more “third world” countries becoming industrialized, most of the Russian natural resource exports were becoming at risk of being outsourced, resulting in Russia gradually losing its small but sizable economic leverage. Hence, the longer Russia waited, the weaker its economic influence became. Finally, the last confirmation for the invasion Putin needed was the weakness US and its NATO allies demonstrated over the course of the last ten years. After seeing the inadequate Western response following the annexation of Crimea and invasion of Donetsk and Luhansk, US withdrawal from Syria in 2015, the fall of independent Hong Kong in 2019, and the U.S.’s withdrawal from Afghanistan and Iraq in 2021-2022, the Kremlin understood that if there is a chance of successfully invading Ukraine and repressing the opposition movement at home (while at the same time suffering the least from an economic standpoint), it is in 2022.

Figure 2. History of the percentage-share of renewables on the gross final energy consumption in the European Union since 2004

Figure 3. Gross generation of electricity by source in Germany 1990-2020 showing the shift from nuclear and coal to renewables and fossil gas

Among the first moves undertaken by Kremlin in the first week of the invasion was the forcible dissolution of the remaining independent media outlets (such as closing the popular news radio station Echo Moscow and the TV Rain channel etc.) in addition to assuming the total control of the social information flow within Russia (the banning of Facebook, Twitter, and Instagram and passing the laws criminalizing the publication of information without the Kremlin’s approval etc.). Simultaneously, all the major cities in Russia were flooded with riot police arresting anyone who disapproved of the Kremlin’s stance. With this, Putin finalized the transformation of Russia into a totalitarian state with a repressed population that is currently incapable of gathering enough power and support to overthrow him. In conclusion, the invasion of Ukraine was nothing but a power move by Putin to bolster his quest of centralizing power and to treat the population at home in accordance with war-time laws. With the majority of Putin’s cronies realizing that failure in Ukraine would result in not just Putin’s, but also their downfall from power, they have no choice but to comply.

References:

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9. https://www.bbc.com/news/world-europe-16122524

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19. https://www.france24.com/en/20200817-protestors-pack-belarus-capital-russia-offers-lukashenko-military-help

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21. https://www.aljazeera.com/news/2021/4/27/russian-court-imposes-bans-on-navalnys-anti-corruption-group

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28. https://www.kyivpost.com/ukraine-politics/parliament-adopts-electoral-code-with-new-voting-rules.html

29. https://www.wsj.com/articles/how-spy-games-are-sabotaging-ukraines-intelligence-agency-1426127401

30. https://www.rferl.org/a/russia-imposes-sanctions-nine-ukrainian-companies/31101039.html

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34.  https://data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?end=2019&locations=UA&start=1992

35. https://tradingeconomics.com/ukraine/ease-of-doing-business

36. https://data.worldbank.org/indicator/MS.MIL.MPRT.KD?locations=UA

37. Voronova, L. (2020). Conflict as a point of no return: Immigrant and internally displaced journalists in Ukraine. European Journal of Cultural Studies, 23(5), 817-835.

38. https://www.rferl.org/a/russia-putin-approval-ratings/25409183.html

39. https://fortune.com/2020/06/28/vladimir-putin-russia-constitution-president-how-long-low-approval-ratings/

40. Siddi, M. (2020). EU-Russia energy relations. Handbook of Energy Governance in Europe, 1-25.

41. https://www.reuters.com/article/us-oil-global-russia-exports-idUSKBN2411LD

The Phoenix

The natural gas import bill more than doubled in 2022, rising from €35.4 billion to €74 billion, despite a 30% reduction in import volumes, due to a 197.3% increase in average prices .

Title:

Content: IAEA Chief Says Political Resistance To Nuclear Energy Dissolving As World Reaps Benefits

VIENNA (UrduPoint News / Sputnik - 08th June, 2023) Worldwide political pushback against nuclear energy is dissipating as many realize it is a clean and reliable source of power, International Atomic Energy Agency (IAEA) Director General Rafael Grossi told Sputnik.

"The problem was that there was a lot of political pushback, and now this political pushback is dissolving because there is what I like to call a return to realism," Grossi said. "A return to realism in the sense that people are seeing that nuclear is efficient, nuclear is clean, very stable, reliable. So obviously, countries are looking into that."

Elon Musk or Bill Gates, for example, are business people who are betting on the potential of nuclear energy, he added.

"They see this activity as an activity that is going to grow in the future," Grossi said.

Musk has repeatedly said that countries should be increasing nuclear power generation. The entrepreneur said it is "insane" to shut down nuclear power plants unless the country is in a place with severe earthquakes or tsunamis.

After Germany shut down its last nuclear power plant in April, Musk said the move posed a huge national security risk and the timing could not be worse.

The billionaire also urged Germany to reopen the nuclear power plants that have already been shut down. Coal power plants, he added, are far more dangerous than nuclear power plants.

These price spikes have placed German manufacturers at a competitive disadvantage, prompting some to consider relocating operations abroad .

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Content: Putin's war in Ukraine puts Germany's Greens in a tight spot

April 3, 2022   |   Tags:
Anti-nuke, anti-war, pro-planet: These are tough days for Germany's Greens, who have long stood for disarmament and renewable energy. Now governing in a crisis, they find themselves needing to go the opposite way. It's not easy being Green. No one feels that these days quite like Robert Habeck, the environmentalist party's former co-chief. Now, as Germany's economic affairs and climate action minister, he oversees weapons exports and works to secure energy supply for the country. That was before inflation and energy prices, both already reaching all-time highs, bounced even higher as a result of the war and the West's dramatic...

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Title:

Content: 22 Apr, 2024 13:24

Fossil fuel era ending – Scholz

Despite ambitious plans to phase out Russian gas, the EU increased purchases in 2023, Reuters reported earlier this month

The predominance of fossil fuels in global energy output is nearing its end, German Chancellor Olaf Scholz has claimed, adding that his country aims to produce 80% of its electricity from renewable sources by 2030.

German industry had for decades relied on relatively inexpensive Russian gas, and to a lesser extent oil. However, following the start of the Ukraine conflict in February 2022, energy imports from Moscow fell dramatically, adversely affecting the competitiveness of many German businesses.

In 2020, the European Union unveiled its Green Deal strategy for the bloc to become climate-neutral by the middle of the century.

Speaking at the opening ceremony of the Hanover trade fair on Sunday, Scholz said that the “era of fossil fuels is coming to an end.” German industry will have to reorganize its operations, but not all technological processes allow for swift decarbonization, according to the chancellor.

The German leader stated that “modern, highly-flexible and climate-friendly power plants” were currently being built across the country to replace traditional power sources. Scholz also said that Norway would provide Germany’s industry with “clean energy from wind and hydropower.”

Eighty percent of the nation’s electricity is expected to come from renewables by 2030, including solar power and both onshore and offshore wind, he added.

Scholz said the two years since the start of the Ukraine conflict have been “turnaround years” for Europe, allowing it to “address the necessary changes” to its energy supply.

The EU aims to completely wean itself off Russian fossil fuels by 2027. Last Friday, however, the bloc’s Agency for the Cooperation of Energy Regulators released a report warning against drastic reductions of imports of liquefied natural gas (LNG) from Russia.

In 2023, Russia emerged as the EU’s second-biggest LNG supplier after the US, accounting for 16% of the bloc’s imports.

Earlier this month, Reuters cited calculations based on the EU’s trade statistics as showing that Brussels increased natural gas purchases from Russia in 2023.

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Title:

Content: There were 1,584 press releases posted in the last 24 hours and 428,843 in the last 365 days.

Four questions for Germany’s big hydrogen power plan

The German government is proposing to invest billions of euros to support the roll-out of a wave of hydrogen-fired power plants. This is part of a move to phase-out coal plants and to deploy large volumes of wind and solar generation.

Details of the hydrogen plan – the Kraftwerksstrategie or KWS – became available on 5 February through a press release from Germany’s Federal Ministry for Economic Affairs and Climate Action 1 , which confirmed government agreement on the scheme. The plan is now subject to the approval of the European Commission and negotiations with the German parliament.

The planned hydrogen subsidies would have a transformative impact on both the German and European electricity markets. But discussions on the plans during 2023 were the privilege only of those inside ministries. Given the importance of these plans, the lack of public debate or transparency so far, especially at European level, is concerning.

In this context, and to inform the debate that will now start, we pose four questions: Why hydrogen? What are the ramifications for the European market? Where in Germany? By when should coal be phased out?

An unprecedented transformation of the German electricity system

Germany wants 80 percent of domestic electricity generation to be renewable by 2030, up from 44 percent in 2022 2 . Specifically, this involves reaching an installed generation capacity of 215 gigawatts solar, 110 GW onshore wind and 30 GW offshore wind by 2030, more than doubling existing capacities in the next six year 3 .

Germany’s governing coalition must also decide whether to bring forward the legally-specified coal phase-out date from 2038 to 2030. Bringing it forward would imply replacement of an additional 17 GW of lignite and coal plants by 2030 4 , on top of 13 GW of plants already scheduled for shut down.

All this means restructuring the electricity system at unprecedented speed. To accompany variable renewables, the deployment of clean-generation capacity that can smooth fluctuations in renewable output – both intra-day and across seasons – is necessary. However, exactly how much new capacity is required, and from which technology, is not clear.

What does Germany aim to do? Principles and compromises

The main thrust of the power plant strategy is to provide subsidies for hydrogen-fired power plants. The German government sees these plants as replacements for coal-fired plants that will shut down, and as complements to variable renewable generation, most likely by helping to balance longer-term fluctuations in renewable output. This is consistent with the German government’s grander ambitions for hydrogen. Plans are being drawn up for a hydrogen pipeline network that will cover 10,000 km by 2032 5 , and up to €20 billion will be spent developing the hydrogen industry between 2024 and 2027 6 .

The government originally wanted to support three types of plant: 1) hydrogen sprinters, 2) hydrogen hybrid, and 3) hydrogen-ready. Sprinters are purpose-built turbines that would run on hydrogen from day one. Hybrids involve the co-location of hydrogen capabilities alongside solar PV or onshore wind, which could even out the electricity sent to the power grid 7 . Hydrogen-ready plants would be plants with gas-fired turbines, and a requirement to provide a detailed roadmap showing how they will switch to hydrogen no later than 2040.

In August 2023, the Federal Ministry for Economic Affairs and Climate Action said it had completed negotiations with the European Commission over provision of state aid to these three types of plant 8 . Plans were drawn up to subsidise 4.4 GW of sprinters, 4.4 GW of hybrid plants, and up to 15 GW of hydrogen-ready plants. A first tender was intended for December 2023.

However, like so much of Germany’s planned climate expenditure, this agreement was thrown into question by a November 2023 constitutional court ruling that COVID-19 debt allowances could not be rolled over into Germany’s Climate and Transformation Fund (Klima- und Transformationsfonds, KTF), on the basis that the rollover would breach government spending rules 9 . The KTF would have been the source of the originally-planned subsidies for three types of hydrogen plant.

Therefore, a compromise was worked out, culminating in the government’s 5 February announcement 10 . The government now plans to subsidise a lower volume of 10 GW hydrogen-ready turbines and has scrapped plans for the 8.8 GW combined sprinters and hybrids. A tender process will offer state support for the construction and operation of four natural gas-fired power plants. Bidders should draw up plans for transitioning to hydrogen between 2035 and 2040. The estimated cost is €16 billion 11 .

This would create a demand for hydrogen of 20 TWh annually once all plants are converted, assuming 1,000 running hours per year 12 . Demand of 20 TWh is significant but not disproportionate in the context of wider plans. Total German hydrogen demand today is 55 TWh, of which almost none is supplied as clean hydrogen produced using renewable electricity 13 . The German national hydrogen strategy sets a target for between 40 TWh and 75 TWh total clean hydrogen demand in 2030 (BMWK, 2023).

Until plants are converted to hydrogen, they will consume natural gas, again estimated at a 20 TWh annual consumption. This compares to typical annual German gas demand of 800 TWh, which will be substantially lower by 2030.

Read the full analysis at the original link.

About the authors

Ben McWilliams is working for Bruegel as an Affiliate fellow in the field of Energy and Climate Policy. His work involves data-driven analysis to critique and inform European public policy, specifically in the area of the energy sector and its decarbonisation.

Georg Zachmann is a Senior Fellow at Bruegel, where he has worked since 2009 on energy and climate policy. His work focuses on regional and distributional impacts of decarbonisation, the analysis and design of carbon, gas and electricity markets, and EU energy and climate policies.

The energy market has also experienced frustration from industry stakeholders over what is perceived as a lack of a coherent government energy strategy, leading to declines in manufacturing and investment .

Title:

Content: 22 Apr, 2024 13:24

Fossil fuel era ending – Scholz

Despite ambitious plans to phase out Russian gas, the EU increased purchases in 2023, Reuters reported earlier this month

The predominance of fossil fuels in global energy output is nearing its end, German Chancellor Olaf Scholz has claimed, adding that his country aims to produce 80% of its electricity from renewable sources by 2030.

German industry had for decades relied on relatively inexpensive Russian gas, and to a lesser extent oil. However, following the start of the Ukraine conflict in February 2022, energy imports from Moscow fell dramatically, adversely affecting the competitiveness of many German businesses.

In 2020, the European Union unveiled its Green Deal strategy for the bloc to become climate-neutral by the middle of the century.

Speaking at the opening ceremony of the Hanover trade fair on Sunday, Scholz said that the “era of fossil fuels is coming to an end.” German industry will have to reorganize its operations, but not all technological processes allow for swift decarbonization, according to the chancellor.

The German leader stated that “modern, highly-flexible and climate-friendly power plants” were currently being built across the country to replace traditional power sources. Scholz also said that Norway would provide Germany’s industry with “clean energy from wind and hydropower.”

Eighty percent of the nation’s electricity is expected to come from renewables by 2030, including solar power and both onshore and offshore wind, he added.

Scholz said the two years since the start of the Ukraine conflict have been “turnaround years” for Europe, allowing it to “address the necessary changes” to its energy supply.

The EU aims to completely wean itself off Russian fossil fuels by 2027. Last Friday, however, the bloc’s Agency for the Cooperation of Energy Regulators released a report warning against drastic reductions of imports of liquefied natural gas (LNG) from Russia.

In 2023, Russia emerged as the EU’s second-biggest LNG supplier after the US, accounting for 16% of the bloc’s imports.

Earlier this month, Reuters cited calculations based on the EU’s trade statistics as showing that Brussels increased natural gas purchases from Russia in 2023.

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To address these challenges, the government has enacted several relief measures, including a €200 billion package to mitigate the impact on households and businesses, price caps on gas and electricity, and subsidies to manage energy costs .

Title:

Content: Germany opposes the EU’s designation of nuclear energy as sustainable energy

Osório Wind Farm, in Rio Grande do Sul

In the letter to Brussels, the German government also cited the lack of safety requirements in relation to nuclear power plants.

German Chancellor Olaf Scholz’s three-party coalition government expressed objection to the European Union’s draft plan to classify nuclear plants as sustainable energy sources in a formal letter sent to Brussels, ministers said on Saturday.

The EU taxonomy seeks to set standards for green investments, helping climate-friendly projects raise capital and eliminating “green laundering” whereby investors and companies exaggerate their green credentials.

“As a federal government, we must once again clearly express our rejection of the inclusion of nuclear energy. It’s risky and expensive,” Deputy Chancellor and Economy Minister Robert Habeck said in a joint statement with Environment Minister Steffi Lemke, both senior members of the Green Party.

In the letter to Brussels, published by the Ministry of Economy on its website, the German government also cited the lack of safety requirements in relation to nuclear power plants.

“Serious, high risk, cross-border, long-term accidents to humans and the environment cannot be excluded,” Berlin said in its letter, adding that the question of where to store radioactive waste in the long term remains unanswered. .

Habeck and Leme said that if the European Commission does not consider Germany’s objections and does not modify the draft, Berlin, in their view, should reject the plan.

However, German government sources told Reuters earlier this month that coalition parties wanted to avoid an escalation in the dispute with the EU and had agreed to closed-door talks between the coalition to abstain from any future votes.

EU rules have long been delayed, with countries divided over whether nuclear power and natural gas deserve the green badge. Austria has already said it will take legal action if the European Union proceeds with the draft it calls both sustainable investments.

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Content: Energy Crisis in Europe
Europe is bracing for tough winter as US-led push to “punish” Moscow for its military operation in Ukraine backfired on the EU, which has faced months of skyrocketing energy prices and rising inflation after Brussels joined Washington in attempting to “phase out” Russian oil, coal and gas.

German Shoppers Fume Over the ‘Shrinkflation Scam’ as 'Downsized' Goods Packages Hide Price Hikes

© Photo : PixabayShopping trolley
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Inflation in Germany spiked to 8.5 percent in July, driven by a surge in food prices, with economists predicting that the inflationary pressures are likely to persist in other eurozone countries due to the relentless surge in natural gas costs, increasing pressure on the government to intervene to cushion households from the impact.
German shoppers are increasingly riled by covert attempts to increase the cost of goods, or so-called ‘shrinkflation,’ according to consumer protection authorities cited by Bloomberg.
Regional groups across the country say they are being inundated with complaints over the dwindling size of goods packages being offered either for the same price or one reduced disproportionately to the fall in size or weight.
Some 100 such complaints have been registered by the Hamburg branch of the group in the past two weeks, which is three to five times above the norm, as shoppers increasingly realize they’re getting less for their money.
Referred to as “bluff packages,” the consumer protection authorities’ list cites 14% inflation for gummy bears and 20% for potato chips, with 25% price hike for some margarines. According to the group, practically all products have been impacted by the phenomenon which was particularly widespread in the 1970s.
Such “downsizing” is being wielded in today’s world of packaged consumables by most of the big food manufacturers, underscore the consumer protection groups.
Oktoberfest, Bavarian Beer Factories on the Chopping Block Amid Germany's Brewing Energy Crisis
Along with the energy crisis that Europe has been grappling with, food costs have become the biggest driver of German inflation, rising at a year-on-year pace of 14% in July. Overall, the inflation rate in Germany, measured as the year-on-year change in the consumer price index, stood at 7.5% in July 2022, piling more pressure on low-income households’ budgets.
“What we’re seeing now is really just the beginning. Between selling goods in old packaging and planning, producing and delivering new ones, preparations for covert price increases take about half a year. Experience suggests this shrinkflation scam will be heavily used in the fall, winter and early next year,” Armin Valet, a nutrition specialist at Verbraucherzentrale Hamburg consumer group, was cited as saying.
Energy Crisis in Europe
'Explosive Mood': Germany Expects 'Winter of Fury' Amid Energy Crisis and Soaring Inflation
Germany’s statistics office has also indicated it is aware of the tactics being used. Costs of over 300,000 goods and services are being tracked monthly along with the sizes and volumes they are offered in.
Against this backdrop, German retail sales plummeted in June - down 9.8% from the previous year - as consumers slashed spending on non-essential goods to deal with record inflation. An even steeper decline in sales has been registered in the case of non-food items such as furniture and household appliances or clothing and shoes.
Economists predict that German inflation will further peak at 9.1% this quarter. This comes as record euro-zone inflation forced a half- percentage point European Central Bank (ECB) rate increase – its first in hike in 11 years. For the overall euro area, economists say price growth accelerated to 8.7% in July.
The dire predictions come as Germany, Europe’s leading economy, has been facing an energy crisis amid Brussels’ push to “phase out” or dramatically cut down on Russian oil, gas, and coal deliveries to “punish” Moscow for the crisis in Ukraine.
Russian President Vladimir Putin has characterized the EU’s policies in response to Moscow’s special military operation in Ukraine as “suicidal.”
Ordinary people in Germany have been hard-hit by the self-inflicted energy price shocks, with a survey conducted by the Institute of New Social Answers last month revealing that one in six Germans have resorted to skipping meals thanks to skyrocketing food inflation.
Authorities have been urging people to bathe less, wear warm sweaters to save on heating costs, and take other measures to deal with the energy crisis.
Before the escalation of the security crisis in Ukraine earlier this year, Germany purchased about 40 percent of its gas and a quarter of its oil from Russia. Accordingly, the European economic and industrial powerhouse has been especially hard-hit after agreeing to Brussels’ directives to cut down energy dependence on Russia.
Russia
Germany’s Scholz Admits to Blowback From Anti-Russian Sanctions as Food, Energy Prices Skyrocket
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Additional measures include a €65 billion relief package, windfall taxes on energy producers, and temporary reductions in sales tax on gas and heat deliveries .

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Content: A potent sign of Europe’s energy crisis can be found at the Marl Chemical Park in Germany’s industrial heartland of North Rhine-Westphalia. A coal-fired power plant that had been due to close by the end of this year will instead keep running through the winter, and beyond, to provide energy for the companies on the site — helping to maintain more than 10,000 jobs.

The power plant is owned by Evonik, one of Germany’s largest speciality chemical companies, which also runs the park. And its extended lifespan reflects the fears of power shortages in the country, as gas imports from Russia have been cut following its invasion of Ukraine. Governments and manufacturers across the continent have been introducing contingency measures to ensure power supplies continue during the colder months.

Many companies have turned to coal and other fossil fuels to keep their operations going. In Germany — which aims to phase out coal by 2030 because it is much more carbon-intensive than gas — the government has temporarily revived or extended the life of several coal-fired power plants. In addition, all three of the country’s remaining nuclear power plants, which had been due to shut down by December 31, will continue operating until mid-April 2023.

For energy-intensive industries, this power crisis is “very acute”, says Harald Schwager, deputy chair of Evonik. He likens the situation to a patient “at the doctor”, but while the “diagnosis is known, so is the therapy”. In this case, the therapy is improving supplies.

“We have a supply shock,” he says. “One [therefore] needs to find ways and means with investments into energy infrastructure so that the supply can be improved, and prices will then automatically come down.”

Engineers at Evonik, which makes products used in everything from toothpaste to tyres, started contingency planning in March. The company screened all of its production sites to determine how it could replace gas with other energy sources. Some of its smaller sites have since started using oil instead of gas but one of the biggest changes has been to keep the coal-fired power plant in Marl running until 2024.

One challenge, says Schwager, has been to ensure sufficient supplies of coal to operate the plant. Evonik has already stockpiled enough coal to keep the plant functioning over the coming winter months of 2022-23. While the price of coal has “gone up, the important thing is to make sure we can keep producing”, he adds.

The coal plant had been due to be replaced by a new gas-fired power station. Fortuitously, given the current concerns over natural gas supplies, that plant had also been equipped to burn other sources of fuel, including liquefied petroleum gas or LPG — a byproduct from refining crude oil. Using a pipeline connected to a nearby refinery owned by BP, Evonik has been able to pipe in LPG to help power the plant and reduce the amount of gas needed.

The net result of these measures is that Evonik has been able to reduce its natural gas needs by 40 per cent. Costs, however, have inevitably risen — the company’s energy bill has jumped roughly €500mn, says Schwager.

For chemicals groups, energy is just one of a number of costs that have risen this year amid wider inflation. However, Schwager is keen to stress that Evonik has maintained its financial outlook for the remainder of the 2022 financial year. Earlier this month, the company reported broadly in-line core profit for the third quarter as higher selling prices offset increased variable costs.

“Evonik has done a good job of cutting natural gas consumption,” says Sebastian Bray, chemicals analyst at Berenberg in London. “The company’s earnings have generally proven resilient. However, higher working capital requirements resulting from elevated energy and raw materials prices may make cash coverage of dividends in 2022 difficult.”

Evonik’s shares are listed on the Frankfurt Stock Exchange, but it also has a large cornerstone investor. Germany’s RAG Foundation, which was set up to help finance the social costs and long-term liabilities associated with the ending of subsidised coal mining in 2018, holds a 56 per cent stake.

Not every large manufacturer has been able to adapt to the energy crunch in such a way, though. BASF, the world’s largest chemicals group by revenue and a significant user of natural gas for its processes, revealed in October that it had spent €2.2bn more on gas at its European sites in the first nine months of 2022 than it did in the same period last year.

Martin Brudermüller, BASF chief executive, said the European gas crisis, coupled with stricter industry regulations in the EU, was forcing the company to cut costs in the region “as quickly as possible and also permanently”. The cuts were necessary to “safeguard our medium- and long-term competitiveness in Germany and Europe,” he added.

Brudermüller is not alone in warning that the energy crisis will have a potentially devastating economic impact on Europe.

“Soaring energy prices are currently precipitating an alarming decline in the competitiveness of Europe’s industrial energy consumers,” the European Round Table for Industry said in a letter to the European Commission last month.

Schwager, however, who was a board member at BASF until 2017, plays down fears of disinvestment, stressing that chemical value chains are so interwoven that it would be difficult to disentangle them. German industry, he adds, has a “task in front of us, we have the toolbox to hike energy efficiency”.

Nevertheless, he concedes that investment into energy-intensive “upstream areas”, such as new power plants, will be more likely happen in other regions where energy is cheaper. Europe, he says, will attract investment into innovation for “downstream” products closer to the customer.

The chemical industry, he suggests, needs “massive investment” for the long term: “[The idea that] we will all run off and go somewhere else, that just won’t happen — we think in decades, and we want our investments to keep running for decades.”

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Commercial Banking Newsletter June Edition - 2022

Big German banks expect 2022 earnings boost from ECB interest rate hikes

Some of Germany's largest banks expect this year's anticipated ECB interest rate hikes to boost revenues and income, alleviating the negative effects of the Ukraine war and the global economic slowdown.

The ECB said it would end its long-standing negative rate policy in July, and is expected to gradually increase its key deposit rate to zero by the end of 2022. The deposit rate moved into negative territory in June 2014 and has been at negative 0.5% since September 2019.

For Germany's largest bank, Deutsche Bank AG, the positive effect of higher rates on group revenues will be about €600 million in 2022, Deutsche Bank CFO James von Moltke told a financial conference June 9.

"We've now had such an extended time of very low, and in Europe negative, rates, that seeing the end of that is going to be helpful for the banking business," von Moltke said.

Germany's second-largest lender, Commerzbank AG, has already seen some upside. Markets have started pricing in the planned ECB rate hikes and forward money market interest rates have gone up, CFO Bettina Orlopp said at the June 9 conference.

The bank expects a positive rate hike-related effect of around €100 million on its NII in 2022, Orlopp said. The "real upside," however, will be seen when ECB rates reach positive territory, Orlopp said, referring to stronger NII growth prospects for 2023 and 2024.

Analysts expect both Deutsche Bank and Commerzbank to book higher NII in 2022. Deutsche Bank's NII is projected to rise to €11.47 billion in 2022 from €11.12 billion in 2021, and Commerzbank's to €5.42 billion from €4.85 billion, according to mean consensus analyst estimates collected by S&P Global Market Intelligence.

High NII, low costs

The picture is similar at Germany's federal state banks.

Markus Wiegelmann, CFO of Bayerische Landesbank, or BayernLB, said earlier this year the bank's NII could increase by an amount in the higher double-digit million euro range if the ECB deposit interest rate moves to zero from its negative 0.5% level. The bank reported a decline in NII in the first quarter, but this was because of a smaller benefit derived from the ECB's TLTRO III cheap money program, rather than a slowdown in operating activities, it said.

Norddeutsche Landesbank, or NordLB, has achieved a turnaround in both net interest income and net commission income, CEO Jörg Frischholz said in a first-quarter earnings statement May 31. NordLB has been engaged in a restructuring since its state-backed rescue in 2019. Despite reducing its balance sheet size, it was able to grow its first-quarter net interest income by 4% year over year.

BayernLB and NordLB did not respond to a request for additional comment when contacted by S&P Global Market Intelligence.

All four banks had reduced operating costs, while operating income grew at Deutsche Bank and Commerzbank, and fell at the two federal state banks. BayernLB and NordLB said bank levy payments and mandatory contributions to the public bank sector's deposit guarantee scheme impacted first-quarter earnings.

Provisions uptick

BayernLB also noted its prior-year results were boosted by a positive earnings contribution from loan loss provisions. The bank increased provisions in the first three months of 2022 mainly due to Russia's invasion of Ukraine and related market uncertainty. BayernLB has limited exposure to the Russian and Ukrainian markets but expects 2022 earnings to be affected by the war's impact on economic growth.

NordLB was the only bank to book provision releases in the first quarter of 2022, while those at all other banks increased year over year.

Both BayernLB and Commerzbank said they are taking a conservative approach with their 2022 risk provisioning because of potential second and third order effects related to the Ukraine war.

Commerzbank feels comfortable with its €1.2 billion loan loss provision target for 2022 provided the global situation does not deteriorate any further, CFO Orlopp said. "If we see a [Russian] gas stop or a recession ... that will be clearly different," she said.

Germany's dependence on Russian gas makes it vulnerable to potential further supply disruptions. Russia-based energy group Gazprom recently said it was cutting gas supply to Germany to under 70 million cubic meters per day in what was described as a political move by Germany's economy minister Robert Habeck, according to a BBC News report from June 16.

Title:

Content: Germany and SA to work together in implementing just transition projects

Germany and South Africa have agreed that, because of their similar fossil fuel use challenges, they would benefit from a relationship based on cooperation and mutual learning.

During a high-level round-table discussion on Just Energy Transition and Climate Action, German Vice-Chancellor Robert Habeck said Germany was setting up climate and energy partnerships around the world, including in Africa, to support its decarbonisation plans, which included the large-scale importation of green hydrogen.

The two parties discussed issues of development cooperation, including climate change, energy, training and skills development.

Habeck encouraged South Africa to let go of fossil fuels to gain an advantage in seeking to secure green investment, for more renewable resources.

Germany’s energy challenge

He added that the two countries could assist each other to overcome the challenges of power shortages and embrace renewables. This is despite Germany’s failure to let go of fossil fuels. Reports suggest that coal-fired power plants across Germany were being given new life after Russia cut gas supplies. This opens up questions on Germany’s motives for funding a just transition when it is pursuing energy from fossil fuels.

Habeck insisted that Russia’s invasion of Ukraine had underlined the risks of being too dependent on both a single country and on fossil fuels for energy.

He added that the war had encouraged Germany to speed up its strategy to phase out its use of oil, gas and coal, despite world pressures to secure them for use in the short term.

Germany was pursuing its own energy transition — referred to as “energiewende”. In a statement, he said Germany had been facing difficulties similar to those in South Africa which could form the basis for enhanced cooperation and mutual learning. The European nation is planning to be off coal by 2030, according to it’s cabinet.

Jochen Flasbarth, state secretary in the federal ministry for economic cooperation and development added that South Africa’s decision to embark on a path of green growth and to tackle the problems of energy supply, unemployment and inequality had their full support.

“We are engaged as partners offering support to make this just energy transition a reality and to deliver tangible results for those left out for too long.”

Mutually beneficial relationship

Trade, Industry and Competition Minister Ebrahim Patel, speaking at the fourth German-African Business Summit in Sandton on Wednesday, said Africa was seeking to build mutually beneficial partnerships to bolster its manufacturing output in “greener and more sustainable ways”.

Patel added that, while Africa was home to 17% of the world’s population, it made up only 3% of global GDP and 2% of global manufacturing.

To attract investment, Patel said African countries needed to promote political stability, the rule of law and intra-African trade and investment, while developing skills and modern infrastructure, including reliable energy supplies.

He also called for greater support from German investors in Africa, including to promote higher levels of manufacturing and minerals value addition.

“While this is vital for Africa, it is an opportunity for Germany too.

“First, this will provide opportunities for German businesses to invest in an expanding African manufacturing sector and to strengthen your own local manufacturing capabilities, and many German companies are already doing that.

“This is particularly important given the experience of supply-chain disruptions and vulnerabilities during the pandemic and as a result of geopolitical tensions,” Patel said.

Habeck added that the South African context was unique because, “I believe the existing and growing supply gap of electricity can be closed with renewable energy sources much faster and cheaper. That way, South Africa can be a global frontrunner in modernising its electricity system.”

Germany’s pledge

Last month, Germany extended R180 million to South Africa’s renewable programmes to shift from coal to clean energy as part of the $8.5 billion pledged at COP26, along with France, the UK, US and EU.

The discussions heard that part of the grant funding by German development bank KfW would be used to build a wind turbine on the Cape Peninsula University of Technology campus for the training of technicians.

In September, Eskom, the South African Renewable Energy Technology Centre and the Global Energy Alliance for People and Planet signed a partnership agreement for the development of the Komati Training Facility.

Habeck said the approach being pursued by the German government was premised on creating new markets and industrial opportunities that included climate action.

Forestry, Fisheries and the Environment Minister Barbara Creecy said that COP27 had emphasised the need for increased momentum to reform the “multilateral development banks and international financial institutions” and called on the shareholders of these institutions to “take decisive action to scale up climate finance in 2023 and make their institutional arrangements fit for purpose”.

As a result of the negotiations, commitments for German-South Africa mutual cooperation were made for renewable energy and energy efficiency; sustainable urban development; technical and vocational education and training; trade; sustainable infrastructure and biodiversity.

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Despite these interventions, inflation remains elevated, with energy prices being a primary driver .

Title:

Content: 19 Sep, 2023 15:11

Germans facing higher gas bills – Bloomberg

The government will end the tax discount on energy provision three months early

Berlin is planning to restore a 19% sales tax on gas and heat deliveries from the end of this year, Bloomberg reported on Monday, citing the German government. The move will effectively end the current discount rate three months earlier than planned.

The value-added tax on natural gas was cut from 19% to 7% last October to ease the pressure on consumers amid soaring energy costs. The measure was supposed to last until the end of March 2024.

According to deputy German government spokesman Wolfgang Buechner, Berlin decided to end the discount early because prices had returned to a “normal level” more rapidly than expected. The government is in the process of drawing up the legislation needed to enact the change, he told a press conference on Monday, as cited by Bloomberg.

Meanwhile, a spokesman for the country’s Finance Ministry, Oliver Olpen, reportedly said the restoration of the higher rate would lead to a rise in public-sector tax revenue of €2.1 billion ($2.2 billion).

Germany relied on Russia for roughly 40% of its natural gas prior to 2022, and was among the hardest hit by the reduction in Russian energy deliveries last year, which were almost entirely halted after the EU imposed sanctions on Moscow in response to the conflict in Ukraine.

A recent report by the German Economy Ministry projected that gas prices in the EU’s largest economy are likely to soar and remain high until at least 2027, unless additional emergency measures are taken.

For more stories on economy & finance visit RT's business section

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**Impact of the Russian-Ukrainian War** The Russian-Ukrainian war has profoundly exacerbated Germany’s energy supply challenges.

**Impact of the Russian-Ukrainian War** The Russian-Ukrainian war has profoundly exacerbated Germany’s energy supply challenges.

**Impact of the Russian-Ukrainian War** The Russian-Ukrainian war has profoundly exacerbated Germany’s energy supply challenges.

Before the conflict, Germany imported about 55% of its natural gas from Russia, making it highly vulnerable to supply disruptions .

Title:

Content: How decades of complacency have left Germany facing a cold, dark winter

Betrayed by its own elite, the country is at risk of social unrest

Germany is facing its worst winter for 75 years. The impending catastrophe risks crippling its economy, sweeping away its government and bringing chaos to the heart of Europe.

In 1946-47, perhaps half a million Germans starved or froze to death in their ruined cities. Older Germans still shudder at the memory of the “Hunger Winter”. Some blamed the Nazis, others the Allied occupation. In fact, the British sent food, fuel and clothing they could ill afford to spare themselves.

Now Europe’s largest economy is heading for a winter of recession, rationing and possible blackouts. This time, though, there is nobody to blame except Germany’s complacent – and in some cases corrupt – political establishment.

As Vladimir Putin chokes off Russian gas supplies – already down to a fifth of their pre-war level – by closing the Nord Stream 1 pipeline for “maintenance” yet again next week, the lamps are going out for Olaf Scholz and his “traffic light” coalition of Social Democrats, Liberal and Greens.

'Autumn of rage'

The Bundesbank has been predicting a recession and the latest figures show that business activity is already contracting. Inflation, which hit 8.5 per cent last month, is expected to keep rising along with the rest of the eurozone, probably into double figures.

Yet for historical reasons Germans won’t just accept high inflation as a consequence of the war in Ukraine. The world remembers the hyperinflation that undermined the Weimar Republic a century ago; only older Germans recall the hyperinflation after the Second World War, which lasted longer. For three years Germany’s only stable currency was American cigarettes. No wonder Germans have been allergic to inflation ever since.

It is true that Germans are not yet demanding big pay rises or going on strike. But energy prices are already rising exponentially. The country's one-year ahead power price has skyrocketed to almost €1,000 per megawatt-hour, a jump of more than 720pc since the start of 2022. If Putin turns off the tap, bringing the mighty German economy to a juddering halt this winter, there is a real danger of civil unrest.

Intelligence officials are warning that extremist organisations, such as the neo-Nazis of Combat 18, are planning an “autumn of rage”. As a foretaste, in the old Prussian town of Neuruppin near Berlin, there were ugly scenes this month as Scholz was shouted down by far-Left and far-Right protesters.

But the panic and indignation now brewing go far beyond the ranks of the “unteachable” extremists.

Germans sense that unaccountable elites have ceded control of their country’s destiny to Putin. The more they are must pay him for Russian gas, the bigger his war chest with which to perpetrate genocide in Ukraine.

Forcing Germany to be complicit in a colossal crime against humanity is a diabolical twist in the vengeance that Putin is now exacting upon Europe for backing Ukraine. According to The Economist’s Christian Odendahl, at present prices Germany will need to spend 8.4 per cent of its GDP on gas. Hitherto it was just 1 per cent.

Already preparations are underway for central heating to be rationed or even switched off, forcing residents to seek shelter in schools or town halls.

The country is scrambling to reduce its reliance on gas with a campaign to make households cut back, and a massive national effort has brought gas storage levels up to 81 per cent full.

Food prices, meanwhile, rose at a rate of nearly 15 per cent in July. Those who fear being unable to afford to heat their homes or feed their families are prey to angst and anger.

Actions have consequences... or do they?

Few foresaw the Russian invasion of Ukraine, let alone its devastating consequences for Europe. But it is dawning on the German people that the seeds of the present crisis were sown over the quarter of a century from 1998 to 2022, under Angela Merkel and her predecessor, Gerhard Schröder.

These were the years of plenty for Germany, when Berlin dominated the European Union, ensuring that its export-led economy benefited from the single currency while loading the social costs on to its poorer neighbours. But Germany’s dirty secret was cheap Russian energy.

Under Schröder – who went on to become one of Putin’s “useful idiots” – German industry began to abandon its postwar reliance on coal and nuclear energy in favour of Russian gas and renewables.

In 2011, after the Fukushima accident, Mrs Merkel announced that all German nuclear power plants would be closed down. It was a pyrrhic victory for the Greens but backed by all the major parties. Public opinion had been turned against nuclear energy in the 1980s by the Soviet-funded “peace movement”. Now the Greens are the keystone of the Scholz coalition.

Even in the country’s present predicament, Robert Habeck, the Green Vice-Chancellor and Environment Minister, is refusing to reverse the exit from nuclear to alleviate the energy crisis, though it is still possible over time to reactivate a number of nuclear power stations.

Yet Berlin is demanding that 26 other EU member states make huge cuts in energy use this winter to help Germany – to the irritation of the Spanish and others, who don’t depend on Russian gas and recall lectures from Berlin during the eurozone crisis about actions having consequences.

For decades, the Kremlin acted as Germany’s geopolitical drug-dealer, tempting Berlin to become ever more addicted to the energy that fuelled its manufacturing, pharmaceutical and chemical factories. Now that the Germans are about to go cold turkey, they are discovering how cynically the national interest was betrayed by their politicians and captains of industry.

With Schröder as its salesman, a new Nord Stream 2 pipeline was built under the Baltic Sea — with the blessing of Mrs Merkel, who fended off Anglo-American pressure to cancel what was regarded as a threat to European energy security.

Last year, as Russian tanks massed on the Ukrainian border and Nato warned of imminent invasion, Gazprom redoubled its efforts to keep the flagship project on track.

The Russian energy giant poured €192 million (£163m) into an environmental foundation set up by Manuela Schwesig, the Social Democratic premier of Mecklenburg-Vorpommern — the state that hosted Nord Stream 2 and stood to gain most. She proceeded to denounce the US for opposing the pipeline, claiming that American sanctions were purely self-interested.

Putin’s stooges almost succeeded in persuading Scholz to defy his Nato allies. He dithered until the eve of February’s invasion before shelving Nord Stream 2.

Now, after six months of Europe’s worst war since 1945, some German politicians are once again calling for the pipeline to be opened “so that people do not have to freeze in winter and our industry does not suffer serious damage”, as Wolfgang Kubicki, Vice-President of the German Parliament, puts it.

Meanwhile Ms Schwesig has just been re-elected as leader of the Social Democrats in her state by a large majority. Schröder has yet to be expelled from the party, let alone sanctioned.

Germany’s Achilles’ heel

This is the measure of Germany’s abject reliance, not only on Russian energy, but on the Russian state. For Putin, gas and oil were only ever a means to an end. He has always wanted to reduce the Germans — towards whom Russians have traditionally had an inferiority complex — to a status of servility.

Stalin only succeeded in dividing Germany. Putin seeks to turn the entire Federal Republic into his client state — and thereby impose his will upon Europe.

With the unerring eye of the predator, Putin grasped that energy was Germany’s Achilles’ heel. A single plant of a single corporation, the headquarters of the chemical and pharmaceutical giant BASF at Ludwigshafen, uses as much energy as Denmark.

Over the last 25 years, Germany’s craving for cheap energy led it into an unequal relationship with Russia — what the philosopher Hegel called “the dialectic of master and slave”.

Putin saw that some German politicians could be bought (Schröder), others bamboozled (Merkel), and still others bullied (Scholz). Other EU countries followed the German example by relying heavily on Moscow for energy, influenced by the evasion and ambivalence that has characterised Berlin’s policy for decades.

Germany, whose economy is substantially larger than Britain’s, has given just £1 billion in military aid to Ukraine compared to the UK’s £3.5 billion. The United States has given ten times as much as the EU. Yet Ukraine is a European country under genocidal attack.

The reluctance to provoke Putin that still prevails in wide circles of the Federal Republic is rooted in exaggerated notions of Russian military power, economic importance and cultural pre-eminence.

German fatalism about Russia’s ability to absorb casualties and yet win ultimate victory reflects folk memories of the Eastern Front. But Putin, unlike Stalin, does not have a vast conscript army at his disposal, he does not enjoy technical superiority and he cannot afford the war of attrition that he has unleashed. Nor are the Russian people united against an invading force in defence of their homeland. Only in Berlin do they think this is another Stalingrad.

This historical myopia has much to do with the long-standing German habit of subsuming the other nations that made up the Soviet Union into Russia. To this day most Germans have no awareness of the fact that the Nazis killed millions of Ukrainian civilians and devastated their country.

Ironically, many artists, writers and musicians who have fled Ukraine have found refuge in Germany. One example is the composer Valentin Silvestrov, who fled to Berlin aged 84 with one suitcase, full of his manuscripts. Once there, he discovered that Ukrainian music was unknown in Germany. Now that Silvestrov’s works are being performed, including at the Proms in London, the Germans are slowly waking up to the presence of a greater living composer than any of their own.

Many ordinary Germans, like the British, instinctively warm to the Ukrainian cause. The difference is in leadership – or lack of it. Chancellor Olaf Scholz, unlike Boris Johnson or Liz Truss, has shown only lukewarm support for Kyiv and has been implicitly rebuked by President Zelensky.

Hamburger grilled

Although there is no suggestion that Scholz has been bribed to go easy on Russia, he himself has become embroiled in a corruption scandal. He is accused of helping M.M. Warburg & Co, Germany’s oldest and largest private bank, to avoid a €47 million fine in 2016, during his time as Finance Minister in the Merkel coalition.

The Hamburg-based bank is alleged to have made up to €300 million in a capital gains tax scam which came to light while Scholz was also mayor of the city state. Just as he finds himself facing an unexpectedly grim present and a positively terrifying future, his provincial past has returned to haunt him.

Last week the Chancellor was grilled by a committee of inquiry in Hamburg. The normally meticulous Scholz claimed not to remember any details about his meetings with Warburg’s former chief, Christian Olearius, who has now been charged with tax evasion. Germany’s safe pair of hands, whom millions had entrusted with the nation’s finances, is now accused of being cosy with tax-dodging bankers and being an unimpressive, even unreliable, witness.

In other ways, too, Scholz is failing to live up to the moral example set by the two great Social Democratic Chancellors of post-war Germany, Willy Brandt and Helmut Schmidt. At a joint press conference with Mahmoud Abbas in Berlin earlier this month, Scholz remained tight-lipped while the Palestinian leader delivered an anti-Semitic tirade, accusing Israel of committing “many Holocausts” against his people.

Schmidt, who concealed the fact he had a Jewish grandfather from the Nazis but as Chancellor was an outspoken philosemite, would not have been impressed by his fellow Hamburger Scholz. Nor would Brandt, who famously fell to his knees at the memorial to the Warsaw Ghetto Uprising.

Not for decades has anti-Semitism been such a threat in Germany: in July, Berlin’s Holocaust Memorial was desecrated with swastikas. Now, as Putin’s myrmidons massacre and deport Ukrainians near the site of Nazi genocide, while a quarter of the Russian Jewish population has emigrated in anticipation of pogroms, Germany needs a leader who is not afraid to denounce anti-Semitism even at the cost of diplomatic niceties.

After less than a year in office, Scholz’s personal ratings are plumbing depths never seen during Mrs Merkel’s 16 years at the helm. As Germans brace themselves for unprecedented hardships in peacetime, they are led by a weak and indecisive Chancellor at the head of a fragile three-party coalition.

Post-heroic, post-patriotic

Wednesday’s visit to Kyiv by Boris Johnson – his third – to mark Ukraine’s Independence Day was hugely appreciated not only by Volodymyr Zelensky but by all Ukrainians. Yet it was a gesture of solidarity that did not occur – could not have occurred – to Olaf Scholz.

The German Chancellor’s only visit to the Ukrainian capital last June, accompanied by Emmanuel Macron and Mario Draghi, was an awkward, chilly affair that yielded little more than promises. This week, Scholz posted a short video message, concluding: “Our hearts are with you.” Ulrich Speck, a German foreign policy analyst, commented: “Hearts, yes. But not weapons.”

Johnson, by contrast, knows he is among friends in Kyiv – a friendship symbolised by Zelensky awarding him Ukraine’s highest honour, the Order of Liberty. It is impossible to imagine the lugubrious German Chancellor finding the Prime Minister’s pithy words: “While people [in the West] are paying energy bills, people in Ukraine are paying with blood.” Nor would Scholz echo him in declaring: “I believe Ukraine can and will win this war.”

For his part, Zelensky told his people that they had been “reborn” in the heat of war. “We used to say: ‘Peace’. Now we say: ‘Victory’,” he declared.

Highly educated Germans find it hard to empathise with such Churchillian sentiments. Jürgen Habermas, the eminence grise of German intellectuals, makes condescending comments about Ukraine as a primitive place, still captive to the nationalist illusions of the last century, unlike more sophisticated, “post-heroic” Germany. It doesn’t occur to the 93-year-old philosopher that without the heroism of its soldiers and civilians, Ukraine would by now have ceased to exist.

Prussian military prowess has long since given way to post-patriotic pusillanimity. Where Merkel and Scholz feared to tread and even Biden was hesitant, Johnson was the first to commit himself wholeheartedly to the cause and to visit war-torn Kyiv.

Many other nations – the Poles, the Baltic states, the Scandinavians and the Canadians among them – have been more supportive than the Germans, who owe Ukrainians the greatest moral debt.

Berlin boasts of handing out a handful of howitzers while dithering over clapped-out armoured vehicles. Meanwhile British arms and training, Turkish drones and American rocket artillery systems have proved decisive on the battlefield.

Sold down the Dnieper

Although the Scholz coalition officially sides with Ukraine, the unpalatable fact remains that Germany and its EU partners are financing Russian aggression by paying vast sums for Russian gas.

Will they stand up to Putin in Germany when the enormity of the ordeal ahead becomes clear to everybody? Will public opinion continue to back even the present feeble commitment, or will the voices calling for peace at the expense of Ukrainians prevail? It is all too believable that at some point, probably early next year when gas storage facilities are empty, Berlin – and Brussels – will open negotiations with the Kremlin, regardless of Kyiv’s wishes.

Yet it is then that the ghosts of the past may rise up to intervene in the present. The thought of Germans and Russians redrawing the map of Eastern Europe at the conference table sends shivers down the spines of every Pole, Lithuanian, Latvian, Estonian and, of course, Ukrainian. On August 23, 1940, exactly 82 years ago this week, the Molotov-Ribbentrop Pact was signed, carving up Poland (which then included Lviv and other parts of present-day Ukraine) and the Baltic states between Russia and Germany. No German Chancellor wishes to be reminded of that precedent.

However, nor can Scholz risk presiding over an even deeper and more lasting recession than that caused by the Covid pandemic. Somehow he must steer a course between the Scylla of appeasing Putin and the Charybdis of economic ruin.

The tension between these positions is reflected in the tripartite coalition. Foreign Minister Annalena Baerbock and the Greens are the hawks, Finance Minister Christian Lindner and his pro-business Free Democrats are the doves, while the Social Democrats are deeply divided. The party leadership leans towards Moscow, the rank and file towards Kyiv. This explains why Scholz never says that he wants Ukraine to win the war, merely that they must not lose it.

The opposition Christian Democrats are only slightly more united. They too have a large wing that privately favours a negotiated peace, represented by their pro-business leader Friedrich Merz, and a smaller but not insignificant group led by the foreign affairs expert Norbert Röntgen, who hope for a Ukrainian victory. Merz has papered over the cracks by focusing on a campaign to reverse his predecessor Mrs Merkel’s exit from nuclear energy.

Meanwhile, the “understanding Putin” lobby has the support of both the hard Left Die Linke and anti-immigration AfD parties. German public opinion has slowly tiptoed away from its initial admiration for Ukrainian resistance and towards a compromise peace.

That subtle shift could soon become an overwhelming tide, once Germans are required to make real sacrifices. Vladimir Putin, we may be sure, is counting on it.

From October, Scholz will impose a gas levy on consumers to compensate energy companies for the cost of replacing Russian gas supplies. Germany’s biggest energy company, Uniper, was bailed out in July to the tune of £12.5 billion; it is now claiming another £18.5 billion of levies.

This policy is bound to be unpopular, since it redistributes tens of billions from the poor to the rich — curious thinking for a government of the Left. But this is nothing compared to the prospect of protests sparked by a national shutdown caused, not by a deadly virus, but by Putin’s energy politics.

A change in the air?

Modern Germany has a volatile history of popular protest. It began with the revolution that toppled the Kaiser in 1918. The Nazis mobilised the masses to carry out their “national revolution” in 1933. A workers’ uprising in East Germany was crushed by Soviet tanks in 1953. Student protests brought about a cultural revolution in 1968. Uniquely bloodless and benign was the fall of the Berlin Wall in 1989. This was Germany’s finest hour.

The defiance that breached the Wall and sent the Soviet army home was a blessing, but the despair that Putin’s revenge may induce this winter will surely be a curse. Gas has given the Russian dictator coercive control over the German political class, which willingly acquiesced in its fate.

In Kyiv, Boris Johnson said: “I can tell you that we in the UK will not for one second give in to Putin’s blackmail.” Olaf Scholz is incapable of speaking like this — because he does not believe it. He has failed to frame the coming ordeal as a battle in which Germans must make sacrifices for their own liberty, not just Ukraine’s. People don’t mind his lack of charisma; they do mind facing a nightmarish winter with spineless hypocrisy at the helm.

Will it become so obvious by next spring that Scholz is unequal to the task that either he or his coalition are replaced? Can the centre of German politics hold — or are we about to see a terrible revolt of the masses against a discredited political establishment? It has happened before. It can happen again.

Daniel Johnson was the Telegraph’s correspondent in Germany and Eastern Europe in the late 1980s. He is now the editor of TheArticle.

Title:

Content: 'Sustainability challenges' What Big Oil, green movement conceal from us

The US funds its military aid to Ukraine with tax dollars and some of America’s allies fund Putin’s military with purchases of his oil and gas exports. And that’s the absurdity that has come to define the Russian invasion
Representative image

NEW YORK: It has long been said that the definition of insanity is doing the same thing over and over again and expecting a different result. By that definition, we’re the ones detached from reality if we keep accepting what the oil industry and the green movement keep telling us over and over again and expecting a different result. The greens keep saying that because the price of wind and solar is now as cheap as, or cheaper than, fossil fuels, they’ve won the energy war. Game, set, match — welcome to the green planet.

The oil companies say — as they have in each previous energy crisis since 1973 — that the only answer to this energy crisis is the one they’ve offered for the past 49 years: drill, baby, drill. Welcome to reality. Well, they’re both wrong, and accepting the repetition of either of these tired shibboleths is hurting us economically, environmentally and geopolitically — especially, of late, geopolitically.

Because our continued addiction to fossil fuels is bolstering Vladimir Putin’s petrodictatorship and creating a situation where we in the West are — yes, say it with me now — funding both sides of the war. We fund our military aid to Ukraine with our tax dollars and some of America’s allies fund Putin’s military with purchases of his oil and gas exports.

And if that’s not the definition of insanity, then I don’t know what is. Have no illusion — these sins of the green movement and the oil industry are not equal. The greens are trying to fix a real, planet-threatening problem, even if their ambition exceeds their grasp. The oil and coal companies know that what they are doing is incompatible with a stable, healthy environment. Yes, they are right that without them there would be no global economy today. But unless they use their immense engineering talents to become energy companies, not just fossil fuel companies, there will be no livable economy tomorrow.

Let’s look at both. For too long, too many in the green movement have treated the necessary and urgent shift we need to make from fossil fuels to renewable energy as though it were like flipping a switch — just get off oil, get off gasoline, get off coal and get off nuclear — and do it NOW, without having put in place the kind of transition mechanisms, clean energy sources and market incentives required to make such a massive shift in our energy system.

It’s Germany in 2011, suddenly deciding after the Fukushima accident to phase out its 17 relatively clean and reliable nuclear reactors, which provided some 25 percent of the country’s electricity. This, even though Germany had nowhere near enough solar, wind, geothermal or hydro to replace that nuclear power. So now it’s burning more coal and gas.

A 2019 working paper for the U.S. National Bureau of Economic Research found that in Germany “the lost nuclear electricity production due to the phaseout was replaced primarily by coal-fired production and net electricity imports. The social cost of this shift from nuclear to coal is approximately $12 billion per year. Over 70 percent of this cost comes from the increased mortality risk associated with exposure to the local air pollution emitted when burning fossil fuels.”

Today, the European Union is drawing up a plan to break its addiction to Russian oil and gas by 2027, but, in the meantime, Putin is laughing all the way to the bank. As CNN reported in April, citing a report by the Center for Research on Energy and Clean Air: “Russian revenues from fossil fuel exports to the European Union soared during the first two months of the Ukraine invasion” — to $46.3 billion. That was more than double the value of Russian energy imported by the E.U. during the same two-month period a year earlier.

That was not because the E.U.’s volume of imports doubled. Higher oil and gas prices accounted for most of that increase. In other words, Putin starts a war that creates instability, which drives up oil prices, so he makes twice as much money exporting roughly the same amount of oil.

While Germany jumped off nuclear before it had a safety net of sufficient clean alternatives, at least it has been on a serious, path-defining quest to get them. Indeed, the whole world owes Germany a huge debt for driving down the price of solar panels and wind turbines through the subsidies and tax incentives it created. In Germany, wind turbines, solar panels and other renewables covered 54 percent of power consumption this past January and February — which is AMAZING. In 2021, renewable energy sources accounted for only about 12 percent of total U.S. energy that was consumed.

Still, the most important delusion of the green movement today — of which I am a proud, if grouchy, member — is telling itself that because the price of wind and solar technology has fallen so low now that it can beat coal and natural gas in most markets, often even without subsidies, it’s “game over” for fossil fuels. I wish. Price is only half the story.

If you can’t install the transmission lines — to get that sun and wind power from the vast open spaces where it is generated to the big urban areas where it is needed — and if you cannot set aside more land to install the scale of solar and wind farms you need to replace coal, gas or nuclear, it doesn’t matter that your renewables are cheaper on a per-kilowatt-hour basis.

And today transmission is a huge problem in the U.S. and Europe, where many people don’t want wind farms, solar fields, electricity lines — or natural gas pipelines — in their backyard. I wish this were not the case, but there is no immaculate pathway from brown energy to green energy. The road is paved with cruel trade-offs. Pick your poison — but grow up. Meanwhile, ever since the 1973 Arab oil embargo, the big oil companies have basically said in each successive crisis: Sure, we need more clean energy, but you have to understand — it doesn’t scale. Right now, we’re in an emergency, so we just need to drill more. You hear the same refrain today, which is why we’re in danger of wasting yet another oil crisis and never breaking our fossil fuel addiction.

For those oil companies sitting on large natural gas deposits — which are needed in this transition because gas is cleaner than coal — it means tapping those deposits but doing so with zero methane leakage; otherwise gas becomes as bad as coal. But it also means thinking much more seriously about how fossil fuel companies truly make the transition to become “energy companies,” not just oil companies, so they can leverage their amazing pools of engineering talent to provide more energy solutions that save the planet, not warm it.

Friedman is an Opinion Columnist with NYT©2022

The New York Times

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Title:

Content: EU chaos! Macron and Scholz in furious bust-up over EU energy plans: ‘Risky and expensive'

FRENCH President Emmanuel Macron and German Chancellor Olaf Scholz are locked in a furious bust-up over EU energy policy plans as disagreements have sparked division in the bloc.

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Macron wields 'tools to set EU agenda'

While France has been pushing for nuclear to be included in the EU’s sustainable finance taxonomy, Germany is in the process of completely phasing out the energy source in the country. The EU’s taxonomy is intended to hand a green badge to companies and activities — or to withhold it — to “help shift investments where they are most needed". This is part of the bloc’s aim to direct funding towards energy sources with a low or zero carbon footprint.

But this has sparked fury as Germany does not view nuclear power as a form of clean energy.

Mr Macron wants gas and nuclear to be labelled as a “transitional” source under the taxonomy as he claims they are needed for the clean energy transition.

He says that this is because renewables are “intermittent, and thus not totally substitutable, even with our interconnections [in Europe], for non-intermittent sources of electricity production” like gas or nuclear power.

And these calls do not come as much of a surprise, given that 70 percent of French electricity is generated by nuclear power.

Mr Macron has pointed to the verdict from experts on the Intergovernmental Panel on Climate Change (IPCC) to back up his calls.

Macron and Scholz are in a furious energy bust-up (Image: Getty )

Emmanuel Macron is pushing for nuclear power to be included in the EU taxonomy (Image: Getty )

They claim that “nuclear power is one of the solutions to decarbonise our economies”.

And this seems to have convinced Brussels, as the EU Commission drew up a draft proposal, circulated on 31 December, for this to come into effect.

Subject to a consultation period until Friday (21 January), It gave EU members and others just three weeks to analyse the proposal and provide their own comments.

Germany is strongly opposed to the nuclear plans and has been phasing out nuclear power for over two decades.

It also plans to shut down its three remaining plants at the end of the year.

READ MORE: World holds breath as Ukraine to fire rocket amid Russia tension

Olaf Scholz's Government is opposed to the EU's proposal (Image: Getty )

But it is not Berlin who disapproves of the proposal.

The EU Platform on Sustainable Finance, a European Commission advisory body, has torn the proposal apart.

In an opinion piece, it argued that nuclear power is not an entirely clean energy source, and that fossil gas is “far from green”.

Under the EU’s draft proposal, gas-fired power plants would get a “transitional” investment label if they meet a certain criteria.

That is if they use “at least 30 percent of renewable or low-carbon gases as of 1 January 2026, and at least 55 percent of renewable or low-carbon gases as of 1 January 2030”.

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Germany argued nuclear is not a clean energy source (Image: Getty )

And as of January 1, 2036, the Commission said all gas-fired power plants would have to “switch to renewable or low-carbon gases” to qualify for the EU’s green investment label.

But under EU rules, no technology can be considered green if it causes “significant harm” to any of the taxonomy’s six environmental objectives.

Those are climate change mitigation and adaptation, water protection, the transition to a circular economy, pollution prevention, and biodiversity protection.

Germany has been kicking up a fuss over the proposals, calling them “risky and expensive” in a letter sent to Brussels.

Vice Chancellor Robert Habeck said in a joint statement with Environment Minister Steffi Lemke: “As the federal government, we have once again clearly expressed our rejection of the inclusion of nuclear energy. It is risky and expensive."

Germany has also claimed that there is a lack of safety requirements in the nuclear field.

Robert Habeck sent a letter to Brussels slamming the proposal (Image: Getty )

And it argued that the lengthy construction of new reactors "does not offer a short-term opportunity" to phase out carbon-intensive energy sources such as coal.

But while it has poured cold water over nuclear plans, Germany does not seem so opposed to the inclusion of gas.

In the letter sent to Brussels, it reads that gas used in "ultra-modern and efficient gas-fired power plants forms a bridge for a limited transitional period".

But the German Government did mention that the proposed fuel switch targets to low-carbon and renewable gases laid out by the taxonomy proposal are not realistic.

And Mr Macron is travelling to Berlin today to meet with Mr Scholz.

While the leaders’ meeting will focus on the Russia’s mounting pressure on Ukraine, the energy plans will no doubt be a topic of conversation too.

Title:

Content: EU Parliament Backs Green Label For Gas, Nuclear

Strasbourg, France, July 6 (UrduPoint / Pakistan Point News - 6th Jul, 2022 ) :The European Parliament approved on Wednesday an EU proposal to give a sustainable finance label to investments in gas and nuclear power, following a contentious vote.

MEPs in the eastern French city of Strasbourg declined to oppose the measure, which was backed by France and Germany.

There were 278 votes to stop it while 328 voted for a green light. There were 33 abstentions.

"I ask you not to reject this fragile, carefully negotiated compromise," Czech Prime Minister Petr Fiala, whose country has just taken over the rotating EU presidency from France, pleaded ahead of the vote.

The green label, known in EU parlance as the "taxonomy", "caters to a number of countries that will only be able to meet their climate targets as a result of these criteria," he warned.

A small but influential group of member states and activists had lobbied hard for MEPs to reject the green label, in a coalition of opponents to nuclear and gas energy.

Critics of gas point to the war in Ukraine as the latest reason to reject the green label, saying that encouraging investment would only increase dependence on Russian supply.

"How can we ask other countries to reduce their use of fossil fuels if we classify them as green? This will undermine the Paris agreement," said Dutch Green MEP Bas Eickhout.

Critics of nuclear energy point to the threat posed by accidents and nuclear waste and believe solar and wind energy is the best way forward.

But the EU executive, under pressure from nuclear-powered France and gas-reliant Germany, argues that both have a role to play as cleaner power sources during the transition to a net-zero carbon future.

The war led to a dramatic reduction in Russian gas supplies, causing European gas prices to nearly triple compared to pre-conflict levels .

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Content: William Nattrass

Eastern Europe is paying for the EU’s climate revolution

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Europe’s energy crisis shows little sign of abating. After Germany this week withheld approval for the Nord Stream 2 gas pipeline over fears that it could be used as a political weapon by Russia, benchmark gas prices spiked by 10 per cent across Europe, coming close to all-time highs set earlier this autumn.

Some energy traders had hoped that the first supplies arriving through the controversial pipeline would help alleviate pressures this winter, but on Thursday the president of Germany’s energy regulator played this down, warning that approval for Nord Stream 2 cannot be expected in the first half of next year. And as the prospect of relief from the East fades, cracks are starting to emerge in the EU’s wider energy policy, with rumblings of discontent growing in central and eastern Europe about the role which the EU’s climate strategy might be playing in the dire state of affairs.

The Polish parliament last Thursday passed a resolution saying the EU’s energy system ‘has become a huge threat to Poland following the adoption and implementation of new climate policy instruments.’ And in the neighbouring Czech Republic, ministers this week warned of steep increases in energy prices and entreated the EU to take a more liberal attitude towards the use of fossil fuels to keep lights on and homes warm this winter.

Experts have pointed out that there are multiple factors causing the current crisis. With Europe already heavily dependent on Russia for natural gas, it’s widely speculated that Vladimir Putin is toying with the bloc by holding resources in reserve which could be sent west. And the combination of a cold winter last year – leading to the depletion of existing stocks – and an explosive restart to industrial activity when pandemic restrictions were loosened, is thought to have caught the EU on the wrong foot.

Increased dependency on natural gas is the direct result of the EU's emissions reduction strategy. Analysts have praised the switch to gas as a ‘success story’ in ‘filling the gap’ between the phase-out of carbon-intensive coal and the phase-in of renewables.

Yet the political ramifications of this switch are well known. Nearly half of the EU’s supply of natural gas comes from Russia – a proportion which is only likely to increase if and when Nord Stream 2 finally becomes operational. As control over Europe’s power supply falls ever deeper into the clutches of the Kremlin, eastern European states will find not find much solace in knowing that they are vulnerable to harsher geopolitical winds from the East thanks to an emissions reduction strategy formulated in Brussels.

But this isn’t their only concern. Leaders in the region are also becoming increasingly worried about the effect of the EU’s wider attempts to phase out fossil fuels, which they claim is going too far and too fast for the bloc’s less developed energy sectors to keep up.

Like the UK, the EU uses an emissions trading scheme (ETS) which limits the emissions available to certain industries through a steadily decreasing overall cap. This is intended to make emission-heavy fuel sources like coal less attractive in the short term and, in the longer term, to squeeze fossil fuels out of the European energy market altogether.

Unsurprisingly, the ETS is deeply unpopular in some central and eastern European member states which are still heavily dependent on fossil fuels. In the Czech Republic, fossil fuels still account for over half of all energy production, while in Poland the figure is higher still, at over 80 per cent.

As the market becomes ever more restricted, and as Russia assumes ever greater control over supply, these countries see the future very differently to wealthier EU member states with well-developed renewable power industries already in place. The European Commission is bullish about subjecting more of the bloc’s economy to the emissions trading scheme – but traditionally poorer, more fossil-fuel dependent countries are waking up to the fact that they will be the ones left picking up the tab.

The Czech minister of industry and trade, Karel Havlíček, warned this week that alternative energies won’t be able to replace fossil fuels in the country for almost 20 years, and local experts tell me that on the country’s current trajectory it will take longer still. Meanwhile in Poland, an EU directive earlier this year to close the giant Turów lignite mine led Prime Minister Mateusz Morawiecki to warn of an ‘energy disaster’ and ‘huge social problems.’

These countries will be more or less dependent on fossil fuels for decades to come. With the ETS making coal an increasingly inefficient economic proposition – and with natural gas supply becoming increasingly subject to the whim of Vladimir Putin as well as increased competition from Asia – they view the future with understandable trepidation.

A recent increase in the price of carbon emissions on the ETS, resulting from the substitution of dreaded coal for missing gas supplies, is now jolting central and eastern European leaders into panic about the direction in which the EU is heading. At an EU summit on Thursday, Czech leader Andrej Babiš demanded the return of 400 million emission allowances to the market to alleviate pressures, after Poland called for the ETS to be suspended altogether.

Having made a slow start in developing alternative energy sources, these countries are now realising that they could face a drawn-out economic catastrophe as a result of spiralling prices and decreasing availability of fossil fuels. Grim omens are already emerging; in the Czech Republic, the bankruptcy of major supplier Bohemia Energy earlier this autumn saw nearly a million customers switched to ruinous emergency contracts with replacement suppliers.

Cases like this raise concerns that the biggest losers of the EU’s emissions reduction drive will ultimately be the citizens of poorer countries which, as a result of historical disadvantage, have always been behind the curve in adopting renewables. Western Europe may be bullish about phasing out fossil fuels - but central and eastern European nations are unlikely to accept entrenched economic inequality as the necessary collateral damage of an energy revolution.

Written byWilliam Nattrass

William Nattrass is a British journalist based in Prague and news editor of Expats.cz

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Home > News > Germany lied about nuclear energy: expert

Germany lied about nuclear energy: expert

The German government misled its citizens about the possible extension of nuclear power plants, Jakub Wiech, deputy Editor-in-Chief of Energetyka24.com, wrote on Saturday. According to him, all indications are that Berlin’s aim was to close the units regardless of the risks.

He cited Simon Wakter, a Swedish nuclear engineer, who presented a series of materials on his social media showing that Berlin’s narrative on the nuclear issue was getting the truth wrong. As the journalist pointed out, Mr Wakter “has collected statements by German politicians and energy scientists from recent months, juxtaposing them.”

“In his reasoning, Mr Wakter cites, among other things, the German government’s key argument regarding nuclear fuel. Berlin claimed that extending the operation of the nuclear power plants was impossible due to the lack of contracted fuel rod supplies. However, according to Die Welt, there was a confidential meeting between ruling coalition politicians and representatives of nuclear plant operators in March 2022,” Mr Wiech wrote.

As he continued, at the meeting the latter stated that they were able to organise deliveries within a “reasonable timeframe,” however, Berlin took no action in this regard, going further into the narrative of being unable to provide fuel input.

“On exactly 8 March, the German government published a report listing the reasons why nuclear power plants can no longer operate. However, at the same time, those in power met with representatives of nuclear industry operators, who indicated solutions to the allegations made by the report,” Mr Wakter was quoted as saying by the journalist.

“As additional evidence, he points to a statement by a spokesman for Preussen Elektra, who says that the Isar nuclear power plant, one of the last three units of its type in Germany, can continue to operate beyond 31 December 2022 – and without additional supplies of nuclear fuel. Berlin’s argument in this regard has been shown to be a simple lie,” Mr Wiech wrote.

As he added, according to an opinion poll from spring 2022, the majority of Germans (65 percent) see nuclear power as part of measures aimed at meeting EU climate targets.

“So, as it turns out, the German government’s key arguments for shutting down nuclear power (lack of fuel and public opposition) turned out to be lies. One may wonder why Berlin is pushing so desperately to extinguish these units – despite the energy crisis,” Mr Wiech concluded.

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The halt of a major Russian gas pipeline forced Germany to urgently seek alternative energy sources, ramp up gas storage, and implement demand reduction measures .

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The upper house of Germany's parliament signed off on a number of major legislative packages on Friday aimed at helping address inflation and soaring energy costsImage: Wolfgang Kumm/dpa/picture alliance
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Germany approves welfare reform, extends nuclear power

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Germany's upper house of parliament approved measures aimed at helping people hit hard by high energy prices and the high cost of living. The country's nuclear power extension will also take effect immediately.

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The upper house of Germany's parliament, the Bundesrat, approved extending the use of three nuclear power plants, overhauling unemployment benefits and other major legislation on Friday after heated debate among lawmakers.

After receiving approval from the Bundesrat, the measures will soon enter into law. DW breaks down what's set to change in 2023.

Nuclear power extension

The Bundesrat signed off on the extension of three nuclear power plants after the lower house, the Bundestag, approved the move earlier this month.

The nuclear plants — Isar 2, Neckarwestheim 2 and Emsland — will remain operational until April 2023 to provide enough power through the winter. The facilities had been slated to close at the end of this year under Germany's nuclear phaseout plans.

Chancellor Olaf Scholz decided to extend the life of the nuclear plants after Germany found itself facing a severe energy shortage. Russia turned off supplies of gas in response to the backlash over Moscow's invasion of Ukraine.

The extension was bitterly debated among Scholz's center-left Social Democrats (SPD), the environmentalist Greens and the pro-free market Free Democrats (FDP).

With Friday's approval from the upper house, the nuclear power plant extension will take effect immediately.

Germany set to keep nuclear plants running

Unemployment reform

Germany is set for a major welfare overhaul after the Bundesrat signed off on a compromise to reform unemployment benefits.

The changes will go into effect as of January 1, 2023, replacing the current and frequently criticized "Harz IV" unemployment benefits system that has been in place since 2005.

Under the new "Bürgergeld" system (which means "citizen's money"), those who are unemployed will get higher benefits and better vocational skills training.

The initial proposal by Scholz's government was rejected by conservative lawmakers in the Christian Democrats (CDU/CSU) bloc. Under the compromise, benefits could be cut during a six-month "trust period" if an unemployed person is deemed to not be looking hard enough for work.

According to the plans, those receiving benefits will also get more support in job training programs to prepare for permanent employment. The change also is an attempt to mitigate the shortage of skilled workers Germany is currently experiencing.

"This reform is a milestone of social policy in Germany," Scholz told the magazine Focus on Friday after the votes. "This reform put assistance for untrained people who belong to the long-term jobless front and center."

The measure must still be signed by German President Frank-Walter Steinmeier, although nearly all measures approved by the Bundesrat are signed-off by the president.

More money for Germany's unemployed?

Tax relief, higher child benefits

With inflation hitting consumers hard, lawmakers approved measures aimed at softening the blow.

The upper house approved legislation that would help people who receive pay raises that adjust for inflation. The new measures would prevent people having to pay more taxes due to pay raises.

Starting in January 2023, child benefit payments will also be raised. Families will now receive €250 ($260) per month for each child in the household.

The change is a big jump from the current system, which saw parents receive €219 per month for their first and second child, €225 per month for a third child, and €250 for each additional child.

More support for renters

The upper house of parliament also greenlit a law that seeks to help renters deal with skyrocketing heating costs.

Starting from January 1, renters will no longer have to shoulder the costs of heating with oil and natural gas — landlords and property owners will have to chip-in as well.

For buildings that are not energy efficient and produce a high proportion of CO2 emissions, landlords will need to pay more — and not the renters.

In addition, more people in low-income households will receive a housing allowance from the government. The expansion to the law means 1.4 million households are eligible for the payments, as opposed to the current 600,000 households that qualify.

While you're here: Every Tuesday, DW editors round up what is happening in German politics and society. You can sign up here for the weekly email newsletter Berlin Briefing.

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The government also seized three Russian-owned oil refineries, including the Schwedt refinery, which supplied 90% of Berlin’s fuel and accounted for about 12% of Germany’s oil processing capacity .

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Content: Germany: Engine of Europe

Germany's much-vaunted trade surplus disappears as import prices surge

Key Points
  • Data released Monday showed that in May, Germany posted a foreign trade deficit of 1 billion euros ($1.03 billion).
  • This marks a significant moment for the German economy, which had reported trade surpluses for several decades.
  • Bloomberg reported that 1991 was the last time the country reported a monthly trade deficit.
Germany trade entered negative territory in May, raising questions about the stability of its economy in the wake of Russia's invasion of Ukraine.
Picture Alliance | Picture Alliance | Getty Images

Germany is no longer exporting more than what it buys from other countries, highlighting the strains that the nation and other European economies are facing from surging energy and food prices.

Data released Monday showed that in May, Germany posted a foreign trade deficit of 1 billion euros ($1.03 billion). This marks a significant moment for the German economy, which had reported trade surpluses for several decades. Bloomberg reported that 1991 was the last time the country reported a monthly trade deficit.

Its high level of exports had been an important economic driver and the trade surplus was even attacked by former President Donald Trump, who wanted Americans to buy more U.S.-made products.

"Germany's vaunted trade surplus is gone," Carl Weinberg, chief economist at High Frequency Economics, said in a note Tuesday, adding that "higher prices for imports of energy, food and materials are goosing up the import bill."

Germany's exports in the month of May were still 11.7% higher than a year ago, according to the country's statistics office, though 0.5% lower from the previous month.

However, the imports bill went up by 27.8% from a year ago and it was no longer offset by its sales abroad.

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Germany not expected to allow the repricing of gas contracts until later this month, analyst says

Germany — just like many other European nations — has been paying more for energy and food, particularly in the wake of Russia's invasion of Ukraine. Russia, a key exporter of energy into Europe, reduced gas flows to the bloc, bringing new insecurities to the energy market and driving up prices.

In addition, Ukraine, an important exporter of wheat and other food-related items, has not been able to send its products abroad at the same rate as before the war. Farmers are also not able to sow and plant at the same rate as before either — potentially driving up food prices when harvest time comes.

GDP contraction?

The latest data comes at a time when more and more economists are talking of a recession in Europe within the next 12 months. In fact, the euro dropped to its lowest level in two decades against the U.S. dollar Tuesday morning as more investors price in a higher chance of economic turmoil down the line.

Chris Scicluna and Emily Nicol, two economists at Daiwa Capital, said that Germany's first trade deficit since 1991 reflects price shifts and ongoing export weakness.

"With the annual pace of increase in German import prices in May (30.6%Y/Y) almost twice the rate of export prices (15.9%Y/Y), Germany's trade balance was always bound to deteriorate," they said in a research note Monday.

"However, adjusting for shifts in relative prices, ongoing weakness in export volumes, in part related to supply constraints, has also played a role."

They added that the data suggests there is a "strong likelihood" that net trade subtracted from German economic growth in the second quarter, "and adding to the risks that German GDP contracted last quarter."

The energy crisis has had severe economic consequences, including Germany’s first trade deficit in over three decades, largely due to soaring import prices for energy and food .

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Germany seizes 3 Russian refineries in energy row

German Chancellor Olaf Scholz speaks during a meeting in Kyiv, Ukraine, on June 16. He announced the seizure of three Russian refineries in Germany on Friday. File Photo by Ukrainian Presidential Press Office/UPI | License Photo

Sept. 16 (UPI) -- Germany seized three Moscow-linked oil refineries in its country on Friday, in an escalation of the energy war between Russia and European countries in the shadow of the war in Ukraine.

The German government placed shares of the refineries PCK Schwedt, MiRo in Karlsruhe and Bayernoil in Vohburg under its control. All three are owned by the Russian energy company Rosneft.

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"The decision is accompanied by a comprehensive package for the future, which will provide a transformational boost for the region and support the refinery to ensure the supply of oil via alternative supply routes," Germany's economy ministry said in a translated statement.

The European Union has accused Moscow of using energy as a weapon of war, with Russia limiting its supply of natural gas to the countries in response to sanctions placed on the Kremlin for its invasion of Ukraine.

RELATED European Central Bank raises interest rates by three-quarters of a point

The European Union has committed to slashing its dependence on Russian oil, claiming it has fueled Moscow's war against Ukraine. Rosneft Deutschland is one of the largest oil processors in Germany, making up 12% of the country's processing capacity.

German Chancellor Olaf Scholz said he was doing everything possible to ensure Germany's energy security since Russia was no longer a reliable energy supplier.

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He said taking the plants was a "far-reaching energy policy decision to protect" the country. Scholz said the Schwedt refinery in the eastern state of Brandenburg, supplies 90% of fuel to the German capital of Berlin.

Scholtz also announced a $997 million "future package" for eastern German states over several years following Rosneft decision.

RELATED Germany rejects Polish report saying it owes World War II reparations

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Rising energy costs have raised concerns about a potential recession and have adversely affected the competitiveness of German businesses, particularly in energy-intensive industries .

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BERLIN — The German government on Sunday announced a €65 billion relief package to cushion citizens and companies from skyrocketing energy costs while also vowing to reform the energy market to collect excess profits and cap prices.

"We will get through this winter," Chancellor Olaf Scholz said during a press conference as he announced various support measures as well as an extension of Germany's hugely popular state-subsidized €9 transport ticket.

Crucially, Scholz also said that his government would crack down on energy providers that are making excess profits amid the high energy prices that have been largely caused by Russia's war against Ukraine as well as Moscow's reduction of gas exports to Europe.

"There are excess profits by some producers who can simply take advantage of the situation that the very expensive price of gas determines the price of electricity, and that therefore make a lot of money," the Social Democratic chancellor told reporters. "We are firmly determined to change the market rules in such a way that such windfall profits no longer occur, or that they are skimmed off."

While gas is only partly used in Germany to produce energy, the current market design has caused the high gas prices to jack up general energy prices, meaning that providers who produce energy from other sources such as wind, solar or coal are making huge profits.

Scholz said that "the many, many billions" of excess profits that the state would collect from such energy providers would be used to finance relief measures and introduce "a price cap for those in the electricity market who do not have to pay the high gas prices." The European Commission is already working on plans to propose such a price cap at the European level.

Scholz's Finance Minister Christian Lindner, from the liberal Free Democratic Party (FDP), had previously raised opposition toward introducing an excess-profit tax in Germany; such a tax already has been announced in the U.K. and Italy. On Sunday, Lindner — speaking next to the chancellor in Berlin — backed the proposed measures, stressing that this was not a tax in the classical sense but rather an intervention in the framework of energy market rules.

Scholz said his government would seek to implement the energy price cap in accordance with European rules, if they could be quickly agreed by EU countries, "or by implementing them on a national level."

Relief for students and pensioners

When it comes to the relief measures for citizens, Scholz said that pensioners would receive a €300 easing and students €200. He also vowed to extend state-paid housing allowances from the current total of 700,000 recipients to about 2 million recipients. The new relief package, which comes on top of two previous packages that together amounted to €30 billion, also cuts social security contributions for people with a monthly income below €2,000 and increases child allowances.

Another cornerstone of the package is a permanent extension of the €9 transport ticket, which had allowed citizens this summer to travel for one month on all buses, trams, metros and regional trains nationwide, but expired at the end of August. Although Germany's 16 federal states still need to agree to their share of the financing, the price of the new monthly ticket will probably be between €49 and €69.

"It is a matter of negotiation between the federal government and the states," said Omid Nouripour, the co-leader of the Green party, which rules in a coalition with Scholz's Social Democrats and Lindner's FDP. "We hope that we will very soon be able to agree on a Germany ticket with a price around €49," Nouripour added.

Germany's main industry lobby BDI criticized the relief package, saying it had "significant shortcomings and gaps" because it largely focused on private households and was offering too little support for companies that are also suffering from high energy prices.

"The industry expects the government to better include the interests and practical needs of companies in its ongoing crisis management," BDI President Siegfried Russwurm said in a statement.

The full paper detailing the German relief measures, which were agreed on by the three coalition parties overnight, can be read here.

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The government’s response has included plans to expand liquefied natural gas (LNG) import capacity and accelerate investments in renewable energy and hydrogen infrastructure .

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Content: In a stark revelation, the World Nuclear Industry Status Report (WNISR) has outlined the severe challenges faced by the global nuclear power sector in recent years. The report, covering developments up to mid-2023, highlights a significant decline in nuclear production, with its share dropping to the lowest point in four decades. This decline is attributed to a combination of factors including national policy shifts, economic pressures and the rapid growth of renewable energy alternatives.

Global nuclear production and generation reaches new low

The WNISR points out that global nuclear power generation experienced a notable 4% decline, reaching a level not seen since the mid-1990s. Outside of China, the decrease was even more pronounced, at 5%, taking the global nuclear energy share of commercial gross electricity generation in 2022 down to 9.2%. This marks the most substantial drop since the aftermath of the Fukushima disaster in 2012 and a record low in the past four decades. It is noteworthy that this share is now little more than half of its peak of 17.5% in 1996.

Several major nuclear-producing nations faced significant challenges in 2022 and mid-2023, contributing to the overall hit on the global nuclear landscape.

The US saw its nuclear share of commercial electricity generation drop to 18.2%, the lowest level in 25 years. France experienced a drop in nuclear generation below its 1990 level, turning into a net importer of electricity for the first time since 1980. However, the country seems motivated to rectify the situation, recently leading a group of 20 countries in declaring to “triple nuclear energy capacity from 2020 by 2050” at COP28 in Dubai.

Belgium witnessed the closure of two reactors, in September 2022 and January 2023, with three more slated for closure by 2025. Germany saw the closure of its last three operating reactors on 15 April 2023, completing the phase-out policy initiated in 2011.

The report notes that the number of closed power reactors reached 212 units as of mid-2023, with 22 fully decommissioned and 11 released from regulatory control. With this, the report indicates that 407 reactors with a total capacity of 365GW were operational worldwide – a decrease of four reactors compared with the previous year and 31 units below the peak observed in 2002.

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Economic challenges and renewable competition

Nuclear power faces increasing economic challenges, with Lazard modelling indicating that, at discount rates over 5.4%, it becomes the most expensive generator in terms of the levelized cost of energy (LCOE).

National developments of major nuclear-producing countries reflect this reality. The report highlights massive subsidies in the US, with state-level taxpayer-funded subsidies estimated to exceed $15bn by 2030. The UK, now operating only nine nuclear units, has seen cost estimates for the two Hinkley Point C reactors soar to $44bn (£34.98bn) and grid connection delayed until June 2027. South Korea’s state-owned utility, KEPCO, recently faced a record loss of $25bn (33.01trn won), with a 32% rise in net debt to an unprecedented $149bn.

The report also underscores the underestimated hidden costs associated with nuclear power, including decommissioning expenses and liabilities for accidents. Decommissioning costs in Germany, Italy and Lithuania, all nuclear phase-out countries, were estimated to be orders of magnitude higher than international estimates. Meanwhile, the Japanese Government estimated the cost of the 2011 Fukushima accidents at an astonishing $223bn (Y32.62trn) – the largest in the world.

Nuclear finances are even more alarming when compared with renewable alternatives. Renewable energy continues to outpace nuclear power, with total investment in non-hydro renewable electricity capacity reaching a record $495bn in 2022, 14-times the investment in nuclear power plant construction. Wind and solar facilities alone generated 28% more electricity than their nuclear counterparts, accounting for 11.7% of global electricity generation, compared with nuclear’s 9.2%.

In terms of LCOE, the report highlights that nuclear power can be nearly four-times the LCOE of onshore wind at a discount rate of 10%. In the US, unsubsidised solar and wind, with rapidly declining firming costs, have a combined cost of $45–140 per megawatt-hour (MWh) in comparison with new nuclear at a mean $180/MWh.

Uncertain future for global nuclear industry

The global nuclear industry confronts an uncertain future, paired with concerning new developments in the sector.

In the report, one country stood out for going against the current as it continues to dominate the global nuclear market – Russia.

While China leads in the domestic number of reactors under construction with 23 ongoing, Russia dominates the international market with 24 units under construction, including 19 in seven other countries. Russia has also brought on new technology, notably developing the first and only floating nuclear power plant in the world.

However, according to the report, construction delays plague many Russian projects, with 93% of ongoing constructions taking place in Nuclear Weapon States (NWS) or by NWS-controlled companies abroad.

In addition, both China and Russia have been tied to recent revelations about cyberattacks on Sellafield, a nuclear site located on the Cumbrian coast in the UK, by groups with close ties to the two countries. The investigation raised eyebrows about the state of cybersecurity for nuclear sites.

The report also notes that Small Modular Reactors (SMRs) have not seen significant progress in the past year, with no units under construction in the western world. The most advanced project, based in the US and involving NuScale, terminated in November 2023 due to a 75% increase in the cost estimate. Canada, nevertheless, plans to build four SMRs in Ontario, arguing that they will contribute C$15.3bn ($11.25bn) to Canada’s gross domestic product.

In conclusion, the WNISR paints a sobering picture for the global nuclear power industry as it grapples with economic challenges, national policy shifts and the dominance of renewable energy alternatives. As the world transitions towards cleaner and more economically viable energy sources, nuclear power finds itself at a crossroads.

Despite all this, recent announcements at the COP28 summit demonstrate the industry’s efforts to turn things around. While the US, Canada, France, Japan and UK backed the global nuclear supply chain, planning investments to improve uranium enrichment and conversion capacity, US Special Climate Envoy John Kerry launched an international engagement plan to advance nuclear fusion, saying the technology will become vital in the energy transition.

There have also been new developments in international cooperation with the UK and US signing a partnership to develop nuclear fusion technology and the UK and South Korea agreeing to strengthen their cooperation on civil nuclear power including large-scale, small-scale and advanced reactors, decommissioning and waste management, and supply chains.

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Content: Germany to curb energy use over ‘serious’ gas situation

·2 min read

Germany will curb domestic energy consumption and boost stockpiles, as it ramps up efforts to stem a winter fuel supply crisis.

Europe’s biggest economy will increase gas stockpiles and aim to cut down on the use of energy by its dominant industrial sector, economic minister Robert Habeck said in a statement on Sunday.

“Security of supply is currently guaranteed. But the situation is serious,” he added.

“Gas consumption must fall further, and in return more gas must be put into the storage facilities, otherwise things will really get tight in the winter.”

Alarm has grown over the prospect of the continent’s fuel reserves running out after Russia last week cut flows through the Nord Stream pipeline to Germany by 60pc, as part of an escalating pressure campaign by Vladimir Putin.

Prior to the war in Ukraine, Russia supplied Germany with just under a third of its gas.

"The tense situation and the high prices are a direct consequence of Putin's war of aggression on Ukraine," Mr Habeck said.

"What's more, it is obviously Putin's strategy to make us insecure, to drive up prices, and to divide us. We will not let that happen. We will fight back decisively, precisely and thoughtfully."

Analysts at Wood Mackenzie, an oil and gas consultancy, have predicted Europe could run out of gas supplies by January if the Kremlin turns off the taps.

The European Union is already pressing ahead with plans to ban the import of seaborne Russian oil, which would leave the continent scrambling to find new sources.

Mr Habeck, a minister for the Greens party, said Germany will be forced to rely more on coal-fired power plants as it tries to weather the current energy crisis.

A bill to allow plants to continue operating will be discussed in the upper house of Germany’s parliament in early July, and is expected to quickly enter law afterwards.

“That means, we have to be that honest, more coal-fired power plants then for a transitional period,” Mr Habeck said.

“That’s bitter, but it’s simply necessary in this situation to reduce gas consumption. We must and we will do everything we can to store as much gas as possible in the summer and fall.”

In an interview on Saturday, Siegfried Russwurm, president of Germany’s BDI lobby group, said Germany needed to get coal-fired plants out of reserve “immediately”.

A new auction system will be introduced to encourage industrial companies to save fuel, which can then be transferred to storage.

A German government source told Reuters the support would also include €15bn (£12.8bn) of support for the country’s gas market operator to fill storage facilities more quickly.

The German government is prepared to take further action if needed, Mr Habeck added.

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Content: EU defies critics to power ahead with 'green' gas and nuclear plans

Commission says countries must accept imperfect solutions in green transition

The EU’s executive branch will press ahead with plans to classify gas and nuclear power as climate-friendly despite protests from environment campaigners and member states including Germany and Austria.

In a victory for pro-nuclear countries such as France, the European Commission announced that the two power sources would be included in a menu of green investments for the private sector.

Mairead McGuinness, the commissioner for financial services, said the urgent need to scrap coal power meant accepting “imperfect solutions” until Europe can get more of its power from renewable sources.

“I believe that we have found a balance between fundamentally different opinions in supporting the road to decarbonisation,” she said after the 27-member commission approved the proposals on Wednesday.

They were presented in draft form on January 1, beginning a month-long consultation in which Germany and others lodged objections.

Ms McGuinness said the green list known as the EU taxonomy was a tool of financial policy, meant to steer private investment towards green activities, and did not force anyone to use or invest in nuclear or gas.

But critics said the taxonomy undermines the EU’s credibility in climate policy and constitutes an act of greenwashing, or passing off polluting activities as environmentally friendly.

Although nuclear power produces minimal carbon emissions, it is controversial because of the waste it produces and the risk of an accident. Gas-fired plants emit carbon dioxide, although they are regarded as less harmful than coal.

Protesters at commission headquarters staged a mock burial for the EU’s so-called Green Deal agenda on Wednesday, saying the plan to become the first climate-neutral continent by 2050 is weakened by political horse-trading.

"I’d like to report an attempted robbery, please," joked Greenpeace campaigner Ariadna Rodrigo. "Someone is trying to take billions of euros away from renewables and sink them into technologies that either do nothing to fight the climate crisis, like nuclear, or which actively make the problem worse."

'Back room deal'

The inclusion of both nuclear and gas was seen as a potential compromise between atomic power reliant France and its neighbour Germany, which is on the brink of abolishing nuclear power but will need gas to fill the gap.

“A trustworthy taxonomy requires science as its basis, not back room doors between a few EU leaders,” said Paul Tang, a Dutch member of an economic affairs committee in the European Parliament.

“For a global leader in the fight against climate change, labelling fossil gas and nuclear as sustainable is a strange hill to die on”.

Markus Ferber, a German MEP, said the commission had failed to listen to its critics during a four-week consultation.

Criticism from countries such as Germany, Austria and Luxembourg “has not been heard by the European Commission”, he said.

Ms McGuinness said technical adjustments had been made in response to feedback, including amendments to the rules for gas and nuclear to qualify for the green list.

Gas-fired plants will be subject to emissions caps, they should replace an existing coal facility and should be aiming to switch to low-carbon energy sources by 2035.

Investment in nuclear plants can include upgrades to reactors, but will have to meet what the commission described as comprehensive safety and waste requirements.

Parliament clash

Opponents have four months to move against the plans with a vote in the European Council or Parliament, but they do not have the required majority in the first and the picture in the second is uncertain.

Esther de Lange, a climate spokeswoman for the largest bloc in the Parliament, faulted the commission for failing to consult MEPs but said the taxonomy offered “much-needed clarity”.

“To reduce Europe's CO2 emissions, we need gas. Not for ever and everywhere, but for a transitional period and in certain situations,” she said.

Austria separately plans to file a lawsuit against the plans, although Germany said that it regards the prospects for a successful legal challenge as poor.

An earlier section of the taxonomy, which gives the green badge to less controversial energy sources, is already in force.

It does not require companies to choose climate-friendly investments, but aims to give a definitive measure of their environmental impact – after the Cop26 summit brought promises from the private sector to act climate-consciously.

Ms McGuinness said the transitional use of gas and nuclear was necessary in part because 15 per cent of electricity production in Europe still relies on coal.

“Today is a means to an end. The end is a low-carbon future powered by renewable energy,” she said.

“We need to move as fast as we can from the highest-carbon energy sources like coal. During this transition, that may mean accepting imperfect solutions.”

Updated: February 2nd 2022, 12:55 PM

**Renewable Energy Expansion and Emission Reductions** Despite these challenges, Germany has made progress in expanding renewable energy.

**Renewable Energy Expansion and Emission Reductions** Despite these challenges, Germany has made progress in expanding renewable energy.

**Renewable Energy Expansion and Emission Reductions** Despite these challenges, Germany has made progress in expanding renewable energy.

In 2023, the country achieved a 10.1% reduction in greenhouse gas emissions, attributed to growth in renewables and decreased coal and gas usage .

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by Ralph Schoellhammer
Thursday, 3
November 2022
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The energy debate is ripping Germany’s coalition apart

All parties are pursuing their own ideological agenda
by Ralph Schoellhammer
A banner depicting Chancellor Olaf Scholz, Finance Minister Christian Lindner and Climate minister Robert Habeck

The Austrian economist Joseph Schumpeter once wrote that “the first thing a man will do for his ideals is lie.” No sentence is a better embodiment of the ongoing farce around the continuation of Germany’s remaining three nuclear power plants.

Since the beginning of Russia’s invasion of Ukraine there has been a debate as to whether Berlin should postpone the 2011 plan to exit nuclear energy, a power source that in 2021 was still providing around 13% of Germany’s electricity. Even the Green Party, with its general suspicion towards everything that is not wind or solar powered, felt it necessary to at least commission a study regarding the feasibility of keeping nuclear power online.

Or so it seemed. New documents uncovered by a German newspaper have revealed that in early March Vice-Chancellor and Minister for Economic Affairs Robert Habeck apparently issued an examination of the country’s nuclear power plants without even talking to its operators.

As some have suspected from the beginning, there never was a real interest in an objective assessment, but rather a desire to preemptively end the debate. After continued warnings of a worsening energy crunch, including the possibility of rolling blackouts, an agreement was reached to extend the lifetime of two nuclear power plants until April 2023. Nonetheless, the Green fibbing on the issue is deepening a rift in Chancellor Olaf Scholz’s coalition government.

The smallest member of Germany’s three-party coalition is increasingly worried that being part of a government with strong Left-leaning tendencies could be electoral suicide. In the state elections of Lower Saxony on 9th October, the FDP fell short of the 5% electoral threshold and will no longer be represented in the regional parliament, an ominous sign for a party represented in the federal government. In the 2013 general election they were ousted from the Bundestag, having been in a coalition government with Angela Merkel’s Christian Democrats since 2009.

Understandably, many in the party fear a repeat of history, forcing leader Christian Lindner to sharpen its profile and make the FDP a louder voice in the public discourse. In a move that caught both the Greens and the Social Democrats by surprise, Lindner announced his support for an immediate beginning of fracking on German soil, a topic that has been a perennial taboo across the political divide.

While it seems unlikely to happen anytime soon, it has become clear that Germany is increasingly governed by a coalition in name only, where every party is pushing its own ideological agenda. Even Chancellor Scholz has no problem ignoring his partners on significant matters. Just a few days ago he rammed through the sale of 25% of one of Hamburg harbour’s port terminals to the Chinese state-owned COSCO shipping conglomerate. This went against the advice of his own ministries and the European Commission

As happens with most increasingly dysfunctional coalitions, the only common ground can be found in an expansion of public spending. In Germany’s case this would be the massive promise to pump up to 5% of its GDP, or €200bn, into the economy in order to soften the fallout from rising energy prices. This doesn’t bode well for German stability, seeing as recent polls show that the government has already lost its majority.

Officially, new federal elections are not supposed to take place before the autumn of 2025. Given growing tensions within the government and the worsening economic outlook for 2023, though, one should prepare for the possibility of a new election much sooner.

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Content: Germany's gas bill surged 109% last year despite slashed buying

FRANKFURT, March 1 (Reuters) - Germany's natural gas import costs more than doubled in 2022 despite volumes being slashed by 30%, official data from the Federal Office for Economic Affairs and Export Control (BAFA) showed.

Moscow's invasion of Ukraine last February triggered a spike in energy prices and prompted Germany to seek alternatives to Russian supply while imposing measures to curb use.

Germany's import bill increased to 74.0 billion euros ($78.74 billion) from 35.4 billion a year earlier, the BAFA data showed.

Import volumes fell to 3,524,126 TJ, equivalent to 100.2 billion cubic metres (bcm), from 5,008,943 TJ a year earlier.

The average price paid at the border jumped 197.3% to 21,007.58 euros per terajoule (TJ).

The average import price in December stood at 26,050.71 euros/TJ, equivalent to 9.38 cents per kilowatt hour (kWh), and was up 74% from a year earlier.

Helping spur Germany's hunt for alternatives to Russian energy was the closure of the Nord Stream I gas pipeline from Russia last August.

Germany in response bought more piped gas from European neighbours and sought liquefied natural gas (LNG) imports, while mild weather helped curb demand.

Still, the jump in prices and concerns about supply in Germany have contributed to inflation and triggered fears of a recession in Europe's biggest economy.

($1 = 0.9398 euros) (Reporting by Vera Eckert, editing by Jason Neely)

Germany's gas bill surged 109% last year despite...

The government aims for a 64% reduction in emissions by 2030 compared to 1990 levels .

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Content: Germany's gas bill surged 109% last year despite slashed buying

FRANKFURT, March 1 (Reuters) - Germany's natural gas import costs more than doubled in 2022 despite volumes being slashed by 30%, official data from the Federal Office for Economic Affairs and Export Control (BAFA) showed.

Moscow's invasion of Ukraine last February triggered a spike in energy prices and prompted Germany to seek alternatives to Russian supply while imposing measures to curb use.

Germany's import bill increased to 74.0 billion euros ($78.74 billion) from 35.4 billion a year earlier, the BAFA data showed.

Import volumes fell to 3,524,126 TJ, equivalent to 100.2 billion cubic metres (bcm), from 5,008,943 TJ a year earlier.

The average price paid at the border jumped 197.3% to 21,007.58 euros per terajoule (TJ).

The average import price in December stood at 26,050.71 euros/TJ, equivalent to 9.38 cents per kilowatt hour (kWh), and was up 74% from a year earlier.

Helping spur Germany's hunt for alternatives to Russian energy was the closure of the Nord Stream I gas pipeline from Russia last August.

Germany in response bought more piped gas from European neighbours and sought liquefied natural gas (LNG) imports, while mild weather helped curb demand.

Still, the jump in prices and concerns about supply in Germany have contributed to inflation and triggered fears of a recession in Europe's biggest economy.

($1 = 0.9398 euros) (Reporting by Vera Eckert, editing by Jason Neely)

Germany's gas bill surged 109% last year despite...

However, the growth of renewables faces obstacles such as bureaucratic hurdles and local opposition, particularly affecting onshore wind projects .

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Content: Women demand a breath of fresh air in the transition – energy security, access, and health in coal communities

South African coal mines in Dannhauser and natural resources companies are involved in the exploration of coal in a way that is conservative and sustainable in preserving coal for future generations. Picture Leon Lestrade Independent Newspapers.

Published 13m ago

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By Matshidiso Lencoasa

As the country continues to breathe a sigh of relief at almost 10 days of no load shedding, one unfortunately has to burst the bubble and express the other reality we are urged to ignore in our hunger for energy and electricity – that reality is the health impacts of current electricity generation and the deliberate sidelining of the same in the current energy planning thinking as reflected in the Integrated Resource Plan (IRP).

In its formal submissions on the IRP, the Presidential Climate Commission argues correctly that the consideration of air pollution cannot be ignored in any future energy planning.

The recommendation, informed by science, as should any climate and energy policy be, states that “the argument that you need to choose between energy availability and air quality is not valid” and “A path to continue with coal must take account of legal and constitutional requirements, and factor costs of meeting air quality emissions standards into modelling, otherwise it risks being overturned by the courts. While the IRP2023 acknowledges the role of air pollution on human health it avoids dealing with it. ”

Air pollution is a global public health emergency cited as the world’s leading environmental cause of illness and premature death.

Growing up in eMalahleni, asthma, bronchitis, and adverse respiratory health outcomes were the norm and continue to be so in the area dubbed the global number one hot spot for nitrous oxide emissions.

While there is a higher prevalence of respiratory conditions such as asthma among women owing to physiological differences, worsening reproductive health outcomes caused by air pollution, and the unequal gender norms that necessitate that women carry a disproportionate care work burden, the impact of air pollution on the health of women in coal-mining communities has been largely ignored.

Being a woman in a coal-mining town

Life is incredibly challenging for women in mining communities. Unemployment is rife – 66% of women in Mpumalanga are unemployed.

Coal mining is a source of employment for many, but the industry is male-dominated, with women representing only 12% of the country’s total mining labour force.

Much of the work available to women is often precarious and underpaid, mainly in the informal economy that supports the mines, like selling food to miners or providing care work.

The effects of the coal industry on the health of mineworkers are well documented, and platforms are finally being given to employees of mines to reflect on the Just Energy Transition – which we celebrate.

However, as women are primarily found in the informal and care economies, without gender-specific interventions, we are often at the periphery of these considerations and also need platforms to shape the transition. A Just Transition is gender-responsive.

Without a deliberate attempt to involve the intended beneficiaries in climate action that reflects our lived experiences, gender biases and inequalities will likely be entrenched.

Explicit consultation with women in our communities may enable the Just Energy Transition process to identify better and implement gender equality and women’s health outcomes.

Moreover, funding towards the transition must allocate sufficient resources to protect the constitutional right to access health-care services.

This funding includes redressing the devastation air pollution has had on our communities and building a resilient health system that can promote access to health care for all in a climate change context.

Establishing gender-sensitive benchmarks and indicators in the Just Transition policies and implementation is a powerful mechanism to advance gender-responsive allocation of the Just Energy Transition investment. Moreover, gender auditing and monitoring can be effective in centring the women of coal communities in this process.

However, these interventions are not solely for the public sector; robust legislation must be implemented that ensures that companies engaging and benefiting from the industry of our communities must do so in a manner that empowers the women rather than the status quo that exploits us and endangers our lives.

The Just Transition is an opportunity to build a just, fair, and inclusive South Africa.

The particular needs of women, girls and future generations must be foregrounded to take advantage of the opportunity presented by the Just Transition to build a just, fair, and inclusive South Africa.

Matshidiso Lencoasa is a Cornell University Public Policy Leadership- Mandela Washington Fellow 2023, Holds MA in International Development and Education, University of Sussex, and a Bachelor of Commerce from University of Witwatersrand This Article is part of The PCC Youth Climate Change Ambassador Writers Series.

BUSINESS REPORT

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Next week (August 31), a first flash estimate of Eurozone inflation for August will be published. In July, inflation rose to + 2.2% y/y (previously +1.9% y/y). Energy prices were the main driver of this increase, while core inflation fell to +0.7% y/y (previously +0.9% y/y). In July of the previous year, the postponement of summer sales caused an unusually strong increase in the price level in Italy and France; this high comparative value slowed down the dynamics of core inflation this year. In contrast, from July of the previous year (until December), a temporary reduction in VAT in Germany artificially dampened the price level. Due to the low comparative values from the previous year, Germany's core inflation rate rose significantly in July, unlike in Italy and France. Overall, at the Eurozone level, the special effects from Italy and France predominated in July.

We expect headline inflation to rise further in August. Core inflation, in particular, should show a significant increase because the dampening special effect from France and Italy will disappear and, at the same time, the upward pressure on prices in Germany will continue, due to low comparative values from the previous year. In addition, upward pressure from energy prices on headline inflation will persist, due to a continued rise in European electricity prices in August. In general, we expect headline inflation to remain buoyant until December. On one hand, this is due to the unusually low comparative values of core inflation from the previous year; on the other hand, it is due to the persistently high European electricity prices. By the beginning of January 2022, the level of core inflation comparables will normalize, leading us to expect a gradual decline in headline inflation. We therefore expect headline inflation to fall to 1.6% in 2022, after rising to 2.0% in the current year.

EZ – why are electricity prices rising?

European electricity prices have decoupled from global oil prices over the last few months, providing a sustained boost to Eurozone energy prices. In July and August, electricity prices in Germany rose to historic highs. There are two main factors behind this development. An unexpectedly long and cold winter in 2020/21 forced the increased use of gas and coal-fired power plants. This increased use of fossil fuels caused a rise in CO2 prices in the EU emissions trading scheme, which increased electricity prices. In addition, strong gas consumption has caused European gas storage stocks to plummet, triggering an increase in gas prices over the summer. The recent tightening of the EU's climate targets under the "Green Deal" now comes at an inopportune time, as it caused a further increase in the already high CO2 prices in emissions trading, and thus also in electricity prices.

Due to European climate policy, energy prices in the Eurozone will remain exposed to sustained upward pressure in the coming years, because the EU's climate targets were once again significantly tightened as part of the "Green Deal". The EU's greenhouse gas emissions are to fall by 55% by 2030 compared to 1990; previously, a reduction target of 40% was aimed for. In order to achieve this goal, the EU intends to accelerate the annual reduction of CO2 certificates in Europe-wide emissions trading, to which CO2 trading has already reacted in anticipation with price increases. This measure primarily affects utilities and large-scale industry. In addition, from 2025/26, CO2 emissions trading is also to be established for road and maritime traffic in order to increase the pressure to save energy in the transport sector. At the same time, the greenhouse gas reduction targets for the member states were also significantly increased via the effort sharing scheme, which primarily affects the building sector, agriculture, and, by 2025/26, the transport sector.

As electricity from renewable energy sources is to gradually replace fossil fuels, the influence of European electricity prices on Eurozone inflation will increase in the coming years. In contrast, the global price development of fossil energy sources (oil and gas) will play an increasingly subordinate role. The share of electricity in the EU's energy mix is expected to rise to around 30% by 2030 (2015: around 23%) and significantly to 50% by 2050. The contribution of renewable energies to electricity production is to increase to around 35% by 2030 and to 99% by 2050. In contrast, the use of fossil fuels is expected to drop drastically from the current level of around 60% to 4% by 2050.

From an economic point of view, it is above all investments that benefit from the tightening of climate targets, especially in renewable energy sources, electromobility and building renovation. The EU estimates that the tightening of climate targets will increase annual investment requirements in the energy sector by EUR 100bn to EUR 440bn by 2030. Rising energy prices, on the other hand, will burden private consumption and disproportionately affect lower income groups. In order to cushion this, a social fund for climate protection is to provide EUR 72.2bn over a period of seven years for the renovation of buildings, access to emission-free and low-emission mobility and for income subsidies.

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This document is intended as an additional information source, aimed towards our customers. It is based on the best resources available to the authors at press time. The information and data sources utilised are deemed reliable, however, Erste Bank Sparkassen (CR) and affiliates do not take any responsibility for accuracy nor completeness of the information contained herein. This document is neither an offer nor an invitation to buy or sell any securities.

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analysis: The government is celebrating the approval of its energy price cap bill, but plenty of work lies ahead

By Laura Tingle
Posted

In Berlin on Thursday, the German Parliament approved legislation to cap gas and electricity prices for consumers and companies.

After months of wrangling, European Union leaders are expected to release a statement on Monday finalising a price cap, and other measures, to deal with high energy prices.

The Germans have not done things by halves amid an energy crisis that has gripped the world's fourth largest economy after Russia's invasion of Ukraine.

Russia supplied 55 per cent of Germany's gas in 2021. Not only did it face the likelihood of losing that gas supply, it brought it on by halting the commissioning of a major gas pipeline from Russia.

Germany has subsequently transformed its energy policies to fill the gaps, both keeping some old technology in play (nuclear, coal and oil-fired power plants) but also vowing to accelerate its move into renewables.

It has nationalised a major energy supplier, Uniper, leased floating LNG terminals and announced it was going to build two land-based ones, and moved to accelerate the filling of gas storage tanks in time for winter.

Striking to Australian eyes in all this, however, is the singular focus in the German debate (and for that matter, the European one) on securing supply and some price protections.

Price relief, or a complicated world of pain?

Compare that with the Australian discussion in recent weeks which, at the retail and political level may have been about getting some price relief for households and business consumers, but at a wholesale one has morphed into a complicated world of pain for everyone about market regulation of energy producers.

Federal parliament approved a $12 cap on wholesale gas prices on Thursday, and the means to give people who receive income support additional subsidies.

The announced plan to cap coal prices at $125 still has to be handled by the states.

National Cabinet's deal on energy prices reflected the complexities of the way our energy markets are structured, but also made the politics a lot more interesting.

The federal government doesn't carry the political burden of getting involved in coal markets. The states, however, were locked into the deal, significantly reducing the chances of backlash if things don't go to plan.

Reflecting the chaotic way our resources extraction and production sectors are structured, there was a perfect shemozzle of politics and policy, federal-state relations, public versus private sector ownership issues, government revenue and company profits tied up in all of this.

On top of the shemozzle, the federal Opposition complained the government had tried to wedge it by linking the income support measures to a regulatory regime it doesn't like.

And all this noise helps explain why a relatively straightforward piece of legislation about a 12-month gas price cap has ended up being an unhappy episode which has seen share prices fall, companies pulling out of agreements to supply the domestic gas market and stall contract negotiations, and accusations that the federal government is engaged in 'Soviet' era market interventions.

Where did the government go wrong on energy cap?

It's not the immediate price cap that's the problem, but draft legislation, and a consultation paper released at the same time, about how the gas market might work in the future.

Now the huge windfall profits being made from soaring spot prices for gas don't exactly leave resources companies in a place where anyone feels sorry for them.

They are somewhat lucky the government hasn't hit them with a windfall tax, as many other nations have done.

Equally, many see merit in the argument that these are 'our' natural resources and we should not have to pay exorbitant prices for them.

So the resources companies have quite a problem in terms of the value of their social licence just now.

Even the business sector is split between those who back more intervention in the gas market, and those who don't.

But none of that quite explains why the Albanese Government, which has been at such pains to restore relationships with the business community, has taken the path it has.

Nor does it quite fit with the cautious and painstaking way it went about constructing a deal on energy prices in the first place – at the risk of criticism that it was taking too long.

A long-held disposition to howling that various government interventions represented the end of the world might give rise to scepticism about the resources sector's case.

But a cursory look at the language of the consultation paper, and the draft legislation, helps explain the problem.

Bill raises questions about Treasurer and ACCC's powers

The draft legislation gives the Treasurer the power to regulate "dealings between persons who supply or acquire gas, including negotiations and agreements between such persons; or require a person to supply gas in particular circumstances; or deal with resolving disputes between persons who supply or acquire gas".

By any reading of this, the bill would give sweeping powers to the Treasurer to control supply, demand and the price of the gas market in general, and to intervene in particular contracts.

The consultation paper argues that "current low levels of competition between producers, high prices and risks of supply shortages warrant the inclusion of a reasonable pricing provision within the code".

"A reasonable pricing provision would provide a basis for producers and buyers to negotiate domestic wholesale gas contracts at 'reasonable prices', which reflect the cost of domestic gas production, allowing for a reasonable return on capital.

"This provision is expected to remain as long required, and until the ACCC advises the Government that domestic gas prices are reflective of the underlying costs of production and that there is sufficient supply at these prices".

Ongoing arrangement needed: Chalmers

The government therefore raises a plethora of questions about the powers of both the Treasurer, and the ACCC, to judge market conditions and costs of production.

The suggestion is that, 'underneath' the legislation would be a regulatory code which was much more specific and constrained.

Indeed, Treasurer Jim Chalmers on Thursday suggested that all the government was after was a capacity to force buyers and sellers negotiating any specific deal to arbitration if things weren't going well.

"What we need here is an ongoing arrangement to make sure that if there are dud deals in the market, there's a way to arbitrate them", Chalmers told ABC radio.

In addition to the temporary $12 price cap, he said, "we need a set of arrangements which recognise that the market isn't working".

"It's not working when manufacturers are at risk of hitting the fence, it's not working when we get these extraordinary prices and so we need to have a mechanism where both sides of the relationship can access arbitration. The reasonable pricing framework will do that."

As Grattan Institute energy analyst Tony Wood said on Friday, the 'discussion' is now one in which both sides are sending missiles at each other through the public domain: as perilous as trying conduct a relationship via text message.

While the government may celebrate finishing the parliamentary year by getting its price cap legislation approved, the reality is there are torrid months ahead to sort out the detail.

Laura Tingle is 7.30's chief political correspondent.

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The government plans to quadruple offshore wind power generation by 2030, but industry experts express doubts about meeting these targets due to infrastructure limitations .

**Public and Political Sentiment on Nuclear Energy** Public opinion in Germany regarding nuclear energy is increasingly divided.

**Public and Political Sentiment on Nuclear Energy** Public opinion in Germany regarding nuclear energy is increasingly divided.

**Public and Political Sentiment on Nuclear Energy** Public opinion in Germany regarding nuclear energy is increasingly divided.

While the government, especially the Green Party, remains committed to the phase-out, recent polls indicate that a significant portion of the population now views nuclear power as a viable option for achieving climate targets and ensuring energy security .

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Content: Home » Greentech Hydrogen should do the trick – countries are fully committed to H2

Greentech Hydrogen should do the trick – countries are fully committed to H2

by admin

“Numerous interests must be taken into account and harmonized in the energy transition,” said Saxony-Anhalt’s Energy Minister Armin Willingmann (SPD) during an exchange with the respective heads of department for energy, environment and economy in Saxony-Anhalt’s state representation in Berlin on Monday. Federal Economics Minister Robert Habeck and State Secretary for the Environment Stefan Tidow (both Green) also attended the meeting.

According to Willingmann, there is a consensus that renewables must be expanded much more vigorously in the future in order to become more independent in the energy sector and at the same time strengthen climate protection.

NRW Transport Minister and Chairman of the Environment Ministers’ Conference (UMK), Oliver Krischer (Greens), said: “Between the environment, economics and energy ministerial conferences, there is a common understanding that the rapid expansion of renewable energies is crucial for a secure energy supply and for the achievement of climate protection goals.»

Bavaria’s Economics Minister and Chairman of the Economics Ministers’ Conference (WMK), Hubert Aiwanger (free voters), added: “In order to keep industrial value added in Germany, we need an internationally competitive industrial electricity price.”

Greentech Saxony-Anhalt: Chair of the Energy Ministers’ Conference

As the chairing state of the Energy Ministers’ Conference (EnMK) 2023, Saxony-Anhalt organized the meeting with the representatives of the UMK and WMK to exchange views on interdepartmental issues. The focus was on ways to ensure a secure and affordable energy supply and to expand the relevant infrastructure in an environmentally friendly way. In addition, the federal and state governments discussed options for further accelerating planning and approval procedures in the energy sector.

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Russia shut off the undersea Nord Stream pipeline to Germany for three days starting Wednesday and ... gas prices actually fell.

The price of gas on the benchmark Dutch TTF hub was trading at €241.50 per megawatt hour on Wednesday, down from €265.33 on Tuesday and well below Friday's record peak of €346.52.

It's a sign that the EU's effort to diversify supplies, cut back on usage and rapidly fill up gas storage ahead of winter is having an impact on the market. The bloc's gas storage is above 80 percent, a level that the EU had mandated for November 1.

"Let’s continue filling where the level is still lower & implement the #EU demand reduction plan. This will help us get through winter safely," tweeted EU Energy Commissioner Kadri Simson.

Germany's own storage facilities are filled to 83 percent.

"The government prepared for a situation in which gas from Russia no longer flows reliably," tweeted German Chancellor Olaf Scholz. "That's why we were able to react quickly and fill the gas storage facilities for the winter."

Russia is also squeezing other customers. Before the three-day shutdown, Gazprom had limited Nord Stream to a fifth of its normal capacity and has reduced or ended deliveries to a dozen EU countries. It said it would halt deliveries to France's Engie as of Thursday over a payment dispute.

Even without the full closure of Nord Stream, Russia’s deliveries to the EU are well below last year’s level, when it accounted for 40 percent of the bloc’s gas supply. Last week, Russia sent 856 million cubic meters to the EU, 68 percent lower than in the same period in 2021, according to the Breugel think tank.

"Russia is using gas as a weapon of war,” French Energy Transition Minister Agnès Pannier-Runacher said on Tuesday.

Politics is playing a big role in who gets the gas. Hungary, one of the Kremlin's few defenders in the EU, on Wednesday announced a new deal to buy more Russian gas.

"Hungary’s energy supply is safe," said government spokesperson Zoltán Kovács.

Worries remain

The lack of a panicked market reaction to Russia shutting down Nord Stream for maintenance — a claim that Western European politicians disputed — doesn't mean that the Kremlin cutting off deliveries will have no consequences.

"The situation is tense and a further worsening of the situation cannot be ruled out. The gas supply in Germany is, however, currently stable," said the Bundesnetzagentur, Germany's grid regulator.

Even at Wednesday's slightly lower levels, gas prices are still about 10 times higher than a year ago. That is feeding through to electricity prices thanks to the EU's power market design, where the final input needed to balance demand — usually gas — sets the price for the whole market.

"Wholesale prices have risen sharply recently and continue to be at very high levels," warned the Bundesnetzagentur. "Companies and private consumers must expect a considerable increase in gas prices."

EU energy ministers will meet on September 9 to discuss the situation, and are expected to look at short-term measures to rein in prices as well as a longer-term revamp of the bloc's energy market structure.

The German government is preparing for a lot of pain this winter, something Economy and Climate Minister Robert Habeck made clear on Wednesday. Measures will be taken to "prevent prices from going through the roof," he said after a German Cabinet meeting.

The Cabinet discussed what pro-business Finance Minister Christian Lindner called a "massive package" to relieve pressure on consumers and businesses — the third such initiative from Berlin. Habeck warned that companies were stopping production or shutting down because of high energy prices.

Despite the market pullback, Gazprom CEO Alexey Miller on Wednesday insisted that gas prices would be even higher this winter "if current market trends persist."

If Russia pulls the trigger on its gas weapon and ends deliveries over the longer term, getting through the winter season will depend on the amount of gas in storage, deliveries of liquefied natural gas from suppliers like the United States, and cutting back on demand; Germany pledged to cut demand by 15 percent, and is on track to do so, although other big markets like Italy aren't close to that level.

"The soaring cost of energy seems to have caused consumers to save gas. Large businesses are making especially severe cuts," the International Monetary Fund wrote in a recent assessment of the situation in Germany.

Finally, surviving the coming months without a catastrophe is also going to need some luck — that the winter isn't much colder than usual.

EU progress on filling reserves "will probably be sufficient to muddle through the winter, but it's not going to be smooth and the prices will remain very high," said Alexander Gabuev, a senior fellow at the Carnegie Endowment for International Peace.

More from ... Jan Cienski and Victor Jack

For example, 65% of Germans now see nuclear power as necessary to meet EU climate targets .

The energy crisis and rising prices have fueled public discontent and political pressure to reconsider nuclear energy, with some sectors advocating for bringing reactors back online or extending the life of existing plants .

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Content: Home » Greentech Hydrogen should do the trick – countries are fully committed to H2

Greentech Hydrogen should do the trick – countries are fully committed to H2

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“Numerous interests must be taken into account and harmonized in the energy transition,” said Saxony-Anhalt’s Energy Minister Armin Willingmann (SPD) during an exchange with the respective heads of department for energy, environment and economy in Saxony-Anhalt’s state representation in Berlin on Monday. Federal Economics Minister Robert Habeck and State Secretary for the Environment Stefan Tidow (both Green) also attended the meeting.

According to Willingmann, there is a consensus that renewables must be expanded much more vigorously in the future in order to become more independent in the energy sector and at the same time strengthen climate protection.

NRW Transport Minister and Chairman of the Environment Ministers’ Conference (UMK), Oliver Krischer (Greens), said: “Between the environment, economics and energy ministerial conferences, there is a common understanding that the rapid expansion of renewable energies is crucial for a secure energy supply and for the achievement of climate protection goals.»

Bavaria’s Economics Minister and Chairman of the Economics Ministers’ Conference (WMK), Hubert Aiwanger (free voters), added: “In order to keep industrial value added in Germany, we need an internationally competitive industrial electricity price.”

Greentech Saxony-Anhalt: Chair of the Energy Ministers’ Conference

As the chairing state of the Energy Ministers’ Conference (EnMK) 2023, Saxony-Anhalt organized the meeting with the representatives of the UMK and WMK to exchange views on interdepartmental issues. The focus was on ways to ensure a secure and affordable energy supply and to expand the relevant infrastructure in an environmentally friendly way. In addition, the federal and state governments discussed options for further accelerating planning and approval procedures in the energy sector.

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Content: Why do the four major NATO allies have different views and what do some cases tell us about the future of the organisation?

On April 4, amid Russia’s “special military operation” in Ukraine, NATO turned 73. An old man guarding liberty and democracy in a world at war.

Over the past several weeks, the Ukraine conflict has seen the 30-nation security alliance come together—especially the US, UK, France and Germany—against a common “enemy” in Russian President Vladimir Putin.

But on closer look, no one can miss the bandages that are holding the grouping together. The ravages of time and age appear to be catching up with NATO.

French President Emmanuel Macron’s 2019 description of NATO as “braindead” is ringing through the visible signs of divisions within the grouping as the Ukraine conflict drags on.

Despite the show of unity, it will be quite challenging for the NATO powers to stay on the same diplomatic page through the crisis.

The 2021 AUKUS deal between the US and UK, which broke the submarine contract between France and Australia, had incurred Paris's wrath. French officials accused Australia, the US, and the UK of behaving in a duplicitous manner that betrayed and humiliated France. According to France, the AUKUS deal was far more than just a diplomatic spat; it was a complete failure of trust between allies and doubted what NATO exists for.

For NATO, the Ukraine conflict was seen as the best hope for the allies to mend fences.

For example, the UK — which was charting a new course since Brexit — is now standing shoulder-to-shoulder with its old allies in the EU in supporting Ukraine over Russia.

However, the issue is whether the conflict in Ukraine will have a long-lasting gluing effect on the Western NATO allies. Put differently, it is a primary concern of Washington whether the conflict will serve as a backdrop to strengthen trans-Atlantic cooperation.

The divergent individual interests of the four major NATO powers have been visible through the Ukraine conflict.

 Germany is a case in point. Despite the bold declaration of “Zeitenwende” — which means a turning point in its foreign policy — that led to suspension of the Nord Stream 2 project, a massive boost in defence spending, and a promised end to Russian energy imports, Germany continues to rely on Russian oil and gas.

 From Washington's perspective, Germany's dependence on Russian energy would always put Germans at the mercy of Russia. The US’ fears were threefold. Firstly, it was apprehensive that Germany’s dependence on Russian oil and gas would enhance Moscow’s regional importance at the expense of Berlin’s relations with Washington when the US became the world's largest gas producer and a global player in gas markets.

 Second, Germany's improving energy relations with Russia would threaten trans-Atlantic cooperation. Third, Germany and France’s hesitancy over sanctions on Russia and their reluctance to provide Ukraine with heavy weaponry could deepen the diverging interests among NATO allies.

 The worst-case scenario for Germany and France is a prolonged Ukraine-Russia conflict — with the US and UK making more and more provocative statements against Putin and waging a proxy war by sending heavy artillery, ammunition, and drones to Ukraine to bring about a "grinding war" that nobody wins.

 Such a war of attrition would spill across borders and automatically threaten the European continent rather than the US, whose main aim is to keep Russia busy in Ukraine and thus lessen the Kremlin's military influence in Syria, the East Mediterranean and Libya.

Is Germany an outlier?

Speaking at a joint news conference with European Parliament President Roberta Metsola in Berlin, German Chancellor Olaf Scholz said European countries should carefully assess the sanctions on the Kremlin.

Warning that “sanctions should have an effect on the aggressor, but at the same time, we should make sure that they have minimal repercussions for our economies, and we should be able to uphold them," Scholz drew attention to the fact that the ongoing conflict in Ukraine could destabilise European economy and security.

Interestingly, Scholz's refusal to travel to Ukraine after President Zelensky rebuked German President Frank-Walter Steinmeier clearly shows that Germany is seen as an outlier than the others, including Boris Johnson, who paid a visit to Kiev.

The UK's ability to use "democracy” as a bargaining chip to pressure Germany and France to serve Anglo-Saxon interests is also noteworthy. For example, the UK has seized the opportunity to raise its voice as a defender of democracy and freedom and reaffirm the role of a “great power” that Britain has been looking to play since World War II.

Much more realistic and threatening is the UK and US’s policy of holding democracy and human rights as the Damocles sword over these two pivot countries; Germany and France.

Both have no choice but to make a preference between the two alternatives. One is to support Washington's policy of moving weapons and equipment to Ukraine at "record speed" and applying sanctions on Russia to rescue Ukrainian civilians from Russia's assaults.

The second is to continue energy relations with Russia under Putin, prioritising their economic interests at the expense of being stigmatised as an outlier, anti-democratic at a time when the Bucha incident has put an end to the prospect of a peaceful resolution — the first steps of which were taken in Istanbul, Türkiye — to the war in Ukraine.

The differing views in Berlin, Washington, Paris and London on dealing with Putin's aspiration to rebuild a sphere of influence in ex-Soviet territories have always been in flux, with different capitals taking different views at various points.

The Ukraine conflict is not only a part of the general western perception of Russia, which fulfils the role of being the "other" but is also a severe test to understanding the durability of the unity of the West or NATO.

 In a nutshell, leaving aside futurology, two points should be stressed: first, NATO has not been designed to withstand proxy conflicts — Germany against the Russian Federation, France against the AUKUS, Ukraine against Belarus and the Russian Federation. All these have severely weakened the alliance and endangered world peace.

 Second, NATO is in a risky situation because of differences in security or foreign relations issues between member states and because of their domestic compulsions. After all, every country rides out the rough on a simple principle: safety first.

Disclaimer: The viewpoints expressed by the authors do not necessarily reflect the opinions, viewpoints and editorial policies of TRT World.

We welcome all pitches and submissions to TRT World Opinion – please send them via email, to opinion.editorial@trtworld.com

Source: TRT World

The Free Democratic Party (FDP), a coalition partner, has expressed concerns about the electoral risks of the Green Party’s anti-nuclear stance and has engaged in discussions about the feasibility of extending nuclear plant operations .

Prominent business leaders, such as Elon Musk, have criticized the closure of nuclear plants as a national security risk and have advocated for a return to nuclear energy .

Title:

Content: Three nuclear-fired power plants will be taken off the grid in Germany on Friday as part of the country's plan to end atomic power.

"The nuclear phaseout makes our country safer and helps to avoid radioactive waste," said Federal Environment and Nuclear Safety Minister Steffi Lemke.

"It is now essential to ... advance the search for a final repository for high-level radioactive waste as well as permanent solutions for low- and medium-level radioactive waste," the environment ministry said.

Former German Chancellor Angela Merkel speeded up the phaseout following the 2011 Fukushima accident in Japan.

Friday's shutdown affects power plants in Brokdorf in Schleswig-Holstein, Grohnde in Lower Saxony and Gundremmingen C in Bavaria.

Germany's remaining three nuclear plants — Emsland in Lower Saxony, Isar 2 in Bavaria and Neckarwestheim 2 in Baden-Württemberg — will be closed by the end of 2022 "at the latest," the environment ministry said.

"Since 2011, Germany has been drawing a line under a highly problematic technology in an orderly, reliable process," Lemke said.

Nuclear accounts for about 10 percent of Germany's electricity production. The shutdown has sparked criticism as Germany will have to dramatically ramp up renewable energy and has also increased its reliance on highly polluting coal-fired power.

"Security of supply in Germany continues to be guaranteed," said Robert Habeck, federal climate and economy minister. He added that reliable and "sustainably generated electricity" is a "central requirement for aligning our economy and industry toward climate neutrality."

That stance puts Berlin at loggerheads with France, where nuclear is the largest element of its energy mix (and also helps supply Germany).

EU Internal Market Commissioner Thierry Breton said in September that existing nuclear plants, which provide low-carbon electricity essential to the green transition, can be kept running "for two, five, 10 years," adding: "Why deprive ourselves of this production capacity?"

France is planning to scale down the share of nuclear in its electricity mix from 75 percent to 50 percent by 2035, but President Emmanuel Macron said in November that France "will restart the construction of nuclear reactors" while "continuing to develop renewable energies."

Macron also said France will invest €1 billion into research and development, notably into small modular reactors.

Belgium recently decided to shut down all its nuclear power plants by 2025, but plans to invest €100 million in new generation nuclear reactors and research.

More from ... Louise Guillot

Internationally, Germany’s position contrasts with France, which relies heavily on nuclear power and is pushing for its inclusion in the EU’s sustainable finance taxonomy .

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German parliament approves €200-billion energy relief plan

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German lawmakers have voted to suspend a constiutional debt brake to back the relief package amid an energy crisis.

https://p.dw.com/p/4IVnd

Germany's parliament, the Bundestag, on Friday backed the government's proposal of a €200 billion ($195 billion) fund to tackle skyrocketing energy prices.

The rescue package aims to help ease the energy crisis for industries and households.

The plan will be in the form of loans to pay for energy price caps and subsidies.

According to the German government, the fund is set to last until 2024.

Private households could benefit from a price cap of 80% of their usual consumption starting March. The price cap for big company could come into effect as soon as January.

Suspending the constitutional debt brake

To allow for the funding, German lawmakers first voted to suspend the so-called debt brake.

The brake, which limits the federal government's structural net borrowing to 0.35% of gross domestic product (GDP), was adopted in 2009 after the financial crash.

Under Germany's Basic Law, the brake can only be suspended "in the event of natural disasters or exceptional emergencies beyond the control of the state and significantly affecting the state's financial position."

The Bundestag has repeatedly suspended the enshrined law since the beginning of the coronavirus pandemic to allow the country to get large loans.

fb/ar (AFP, dpa, Reuters)

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Content: (Bloomberg) -- Germany has set out its plan to claw back 90% of the earnings from some clean power generators as the government seeks funding for its consumer aid package.

The government is planning to skim earnings above €130 a megawatt-hour for solar, wind and nuclear, according to a draft law seen by Bloomberg News. Politicians are trying to reclaim some of the profits that companies like RWE AG are making from high power prices.

The windfall tax will be applied to electricity producers based on the fuel they use. Lignite plants will be taxed on earnings above €82 a megawatt hour and oil plants above €280. The measures will apply for 10 months, backdated to start of September 2022, until end June 2023 and could be extended to end of 2024.

Germany set out a €54 billion package on November 22 that puts a cap on gas prices for companies and households from next year with more earmarked for electricity. The aid for bills will be partly financed by the windfall tax, from which the government expects to raise a double-digit billion-euro amount, according to officials.

The level proposed is lower than the European Commission’s suggested level of €180 a megawatt hour. Renewable generators in Germany have warned that such a levy will deter investment needed to help the nation wean itself off imported fossil fuels.

The more than 200-page-long law proposal, which is supposed to pass cabinet on Friday, has already provoked widespread criticism from energy lobby groups. Andreas Jung, a lawmaker from the oppositional Christian Democrats, said that the levy will “suffocate” renewable energy companies because they have been investing a lot of money in new technology.

The law is scheduled to pass the upper house on December 16 so that it can go into effect on January 1.

(Adds detail on timing in last paragraph)

©2022 Bloomberg L.P.

This divergence has led to tensions within the EU, as Germany opposes the recognition of nuclear as a sustainable investment while France advocates for it .

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France hosts nuclear energy exhibition, signaling comeback of nuclear power

(MENAFN) France recently hosted a nuclear energy exhibition, marking a significant shift in the discourse around nuclear power. This event, the first of its kind in nearly a decade, attracted considerable attention, contrasting with concerns two years ago when organizers feared potential disruptions by anti-nuclear protesters. This resurgence is evident in the current exhibition held on the outskirts of Paris, where Miss USA 2023, a nuclear engineering student, played a prominent role in showcasing the event. The exhibition featured displays of radiation-protective gloves and cutting-edge designs for small reactors, signaling a clear message that nuclear power is making a comeback.

With 56 reactors, France stands as a key player in European nuclear energy and aims to position itself at the forefront of the industry's revival. Sylvie Berman, former French ambassador to China and Russia and chair of the Paris expo, emphasized the end of a taboo era surrounding nuclear energy. The industry is gaining attention for its low-emission technology, notably at the ongoing Summit of the Parties (COP28) in the UAE, where a dedicated event spotlights nuclear energy for the first time.

The renewed interest in nuclear power reflects changing perspectives after years of decline and stagnation. This shift is influenced by growing concerns about climate change and last year's energy crisis triggered by the Russian-Ukrainian war, leading to Russia cutting off gas supplies to Europe. Even Japan, home to the Fukushima reactor disaster in 2011, has restarted decommissioned reactors, while other nations are contemplating the construction of new reactors. These developments provide additional reasons for optimism among nuclear energy suppliers.

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**Comparative Context and Future Outlook** Germany’s nuclear phase-out stands in contrast to other EU countries.

**Comparative Context and Future Outlook** Germany’s nuclear phase-out stands in contrast to other EU countries.

**Comparative Context and Future Outlook** Germany’s nuclear phase-out stands in contrast to other EU countries.

France generates about 77% of its electricity from nuclear sources and is actively promoting nuclear as part of its energy strategy .

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Germany Achieves 10% Reduction in Greenhouse Gas Emissions, On Track for 2030 Climate Goals

Germany achieves a 10.1% cut in greenhouse gas emissions in 2023, marking significant progress in its journey towards environmental sustainability.

Nimrah Khatoon
New Update

Germany marked a significant milestone in its environmental efforts, reporting a 10.1% decrease in greenhouse gas emissions in 2023, as confirmed by official data. Vice Chancellor Robert Habeck, doubling as the economy and climate minister, announced that with about 673 million tons of greenhouse gases emitted last year, Germany is poised to meet its ambitious 2030 target of reducing emissions by 65% relative to 1990 levels. This progress is attributed to the robust expansion of renewable energy sources and a strategic move away from coal and gas, despite the economic challenges faced by businesses and consumers.

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Strategic Expansion of Renewable Energy

The Federal Environmental Agency highlighted the country's "very successful expansion of renewable energies" as a pivotal factor in the emission reduction. Germany's focused efforts on solar and wind power and other renewable sources have not only contributed to the decline in emissions but also positioned the country as a leader in renewable energy adoption. However, the agency also pointed out that more efforts are needed, especially in the transport sector, to continue this positive trend.

Challenges and Projections

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The ministry led by Habeck noted that while projections for the coming years are promising, showing a potential decline in emissions by nearly 64% by 2030 compared with 1990, challenges remain. The transport sector, in particular, requires significant advancements in electric mobility and a reevaluation of subsidies. The country's economic performance, impacted by high energy prices and global economic instability, underscores the need for continued dedication to environmental goals amidst adversity.

Looking Forward

Germany's commitment to achieving net-zero emissions by 2045 remains steadfast, with renewable energy playing a crucial role in this journey. The nation's progress, including the notable decline in greenhouse gas emissions in 2023, serves as a testament to its capacity for green transformation. As Germany continues on this path, the global community watches closely, recognizing the potential ripple effect of its actions on international climate policy and the broader fight against climate change.

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Other countries, such as Belgium and Spain, are also planning nuclear phase-outs, illustrating a division in EU energy strategies .

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Content: German greenhouse gas emissions dropped sharply last year, raising hopes of meeting 2030 target

By The Associated Press

BERLIN (AP) — Germany’s greenhouse gas emissions dropped by one-tenth last year as renewable energy grew in importance, the use of coal and gas diminished and economic pressures weighed on businesses and consumers, official data showed Friday.

Vice Chancellor Robert Habeck, who is also the economy and climate minister, said Europe’s biggest economy is on course to meet its target for 2030 of cutting emissions by 65%, compared with 1990.

Germany aims to cut its emissions to net zero by 2045 and is working to ramp up the use of solar and wind power and other renewable sources.

The country’s environmental protection agency said that Germany emitted about 673 million tons of greenhouse gases in 2023, a decline of 76 million tons or 10.1%, compared with the previous year. It was the strongest decline since 1990.

The agency pointed to Germany’s “very successful expansion of renewable energies” but cautioned that progress in cutting emissions is not satisfactory across the board. It said more needs to be done in the transport sector in particular, for example by expanding electric mobility and cutting some subsidies.

Habeck’s ministry said projections for the coming years point to a decline in emissions by 2030 of nearly 64%, compared with 1990.

“Germany is on course, for the first time,” Habeck said in a statement. “If we stick to our course, we will reach our 2030 climate targets.”

That, he said, can be done with a recovering economy.

Germany was one of the worst-performing major developed economies last year, weighed down by high energy prices, global economic weakness and interest rate hikes to fight inflation. The country is home to many energy-intensive companies, including in the chemical and metal industries.

The Associated Press

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The German government remains officially opposed to nuclear energy, citing safety and waste disposal concerns, but internal political divisions and shifting public opinion indicate that the debate

The German government remains officially opposed to nuclear energy, citing safety and waste disposal concerns, but internal political divisions and shifting public opinion indicate that the debate

The German government remains officially opposed to nuclear energy, citing safety and waste disposal concerns, but internal political divisions and shifting public opinion indicate that the debate