- jenny hill
- From BBC News in Wilhelmshaven (Germany)
When Russian President Vladimir Putin turned off the gas taps to Europe, Germany feared a winter plagued by blackouts more than any other country.
But German officials were quick to secure alternative supplies, aware that heavy reliance on Russian gas had left Europe’s economic engine considerably exposed.
Today, a few months later, the lights shine on the Christmas markets and a shy optimism is felt in the air seasoned with Glühwein (mulled wine).
The strategy Germany hastily devised to survive without Russian gas appears to be working, at least for now.
“Energy security for this winter is guaranteed,” said Social Democrat Chancellor Olaf Scholz in the German parliament on Wednesday (23/11).
Looking for other suppliers
The country’s gas deposits are filled, in part, by a frantic — and expensive — purchase operation in the world’s hydrocarbon markets.
Similarly, on Germany’s windswept North Sea coast, engineers have just built, in record time, their first liquefied natural gas (LNG) import terminal.
LNG is natural gas cooled in liquid form to reduce its volume and facilitate its transport. And it turns back to gas when it reaches its destination.
In Germany, this type of project usually takes years, due to excessive bureaucracy. However, the authorities eliminated obstacles so that the work could be completed in less than 200 days.
The most important part of the terminal, a “floating storage and regasification unit” (FSRU), has yet to be secured. The FSRU, which is essentially a specialized vessel in which LNG is converted back to a gaseous state, will be leased for US$207,259 (R$1.1 million) per day.
Within a few weeks, oil tankers from countries such as the United States, Norway or the United Arab Emirates will be able to start delivering their cargo to the port of Wilhelmshaven.
The terminal’s operator, Uniper, which is now controlled almost entirely by the German government, declined to disclose its suppliers, but stressed that the contracts are already in place.
Berlin plans to build another 5 LNG terminals. Most are expected to be completed next year.
A race against time
Powerful German industry held its breath as the government carried out its risky strategy.
“If we don’t have gas, we have to close the kiln,” Ernst Buchow, owner of a brickyard half an hour outside Wilhelmshaven, tells the BBC.
The bricks it produces must be fired in a giant kiln at temperatures of up to 1,200 degrees Celsius. In the near future, the businessman hopes to be able to switch to green hydrogen, but at the moment he is still totally dependent on gas.
“It’s not just the politicians’ fault. The industry wanted Russian gas contracts,” he adds.
Just a year ago, agreements with Moscow supplied Germany with 60% of the gas consumed, much of it through the Nordstream gas pipeline.
Despite significant political and citizen opposition, the government hoped to put into operation the controversial Nordstream 2, which would have doubled the amount of Russian gas reaching Europe via Germany. However, the invasion of Ukraine buried these desires.
The federal power grid agency says that today Germany manages without Russian fuel.
But, to avoid shortages during the winter, its experts say that the LNG terminals should start operating early next year and that gas consumption should be reduced by 20%.
Getting this far can be considered a great national achievement, but it didn’t come for free.
Germany, a heavyweight in the world economy, often gets what it wants. But its newfound appetite for LNG is fueling global demand.
And that can put poorer countries like Bangladesh and Pakistan in a vulnerable position.
“There are many countries, especially emerging economies, that are out of the market and can no longer supply themselves with the LNG they need, because they have less purchasing power than Germany”, says Professor Andreas Goldthau, from the Willy Brandt School of Public at the University of Erfurt, Germany.
Goldthau warns that this puts these nations at greater risk of suffering blackouts or having to resort to “dirtier” energies, such as coal, precisely to avoid this scenario.
What about Germany’s plans to complete its transition to a green model? After all, LNG is a fossil fuel.
Everyone involved in the Wilhelmshaven project insists that LNG is a “transition” fuel.
Uniper promised to build an infrastructure to handle green hydrogen along with the LNG terminal.
This fueled the Wilhelmshaven city council’s ambitious plans. The mayor, Carsten Feist, assured that the LNG terminal will not bring many jobs to the city. But this will happen with your plans to create a green energy center.
“Much of the energy transformation we need for our planet to have a habitable climate in 50 to 100 years, much of what is needed in Germany, will take place in and through Wilhelmshaven,” he says.
But the most staggering cost of Berlin’s strategy to cut its reliance on Russian gas is monetary.
The six LNG terminals forced the German government to spend around US$6.3 billion. This is more than double what ministers had initially budgeted and could rise further next year.
Germany learned the value of a secure energy supply too late and is now paying dearly for it.