The federal government rejects a ban on the import of Russian energy for reasons of security of supply.

The risk of a liquidity crisis for utilities and municipal utilities, which would be acute in the event of a gas boycott, is also likely to play a role in this decision. Larger gas suppliers in Germany such as RWE, Uniper and VNG are contractually obliged to deliver - with high liquidity requirements due to volumes and price risks. Most of them have already had additional credit lines approved by the federal government.

“A possible liquidity crisis from larger gas suppliers in the energy supply would spread to all utilities and municipal utilities,” says Matthias Deeg, energy expert at the Horváth management consultancy. “If, for example, the delivery obligations for upstream suppliers were no longer valid due to 'force majeure', this would mean that utilities and municipal utilities themselves could find themselves in an existential liquidity crisis.”

But what about demand and availability if gas deliveries from Russia stop in the short term because the conflict worsens? How dependent are Germany and Europe currently on Russian gas - and above all: What potential exists to replace the missing quantities in the short term? The management consultancy Horváth and the energy consulting startup evety examined these questions in the analysis “Security of natural gas supply in Germany and Europe” published on Monday.

Liquefied gas imports with the greatest potential for increase

More than half of the 86.5 billion cubic meters of natural gas consumed in Germany annually comes from Russian imports. In total, the federal government imports more natural gas from Russia and associated production regions than all other European countries. Across all European countries, the share of Russian imports is 36 percent, the average over the last few years. Currently, 41 percent of the natural gas consumed in Europe comes from our own production, which corresponds to a volume of almost 220 billion cubic meters.

According to calculations by evety and Horváth, this amount can be increased in the short term by a maximum of 13 percent to around 248 billion cubic meters. According to the analysis, an increase in the purchase quantity of up to 55 percent is possible for pipeline imports from Africa. Through additional deliveries from African countries, a total of 39 billion cubic meters of natural gas could be transported to Europe through the pipelines.

In the area of ​​liquefied gas imports, according to the analysis, it is possible to increase the purchase quantities from 115 billion cubic meters of liquefied gas to around 182 billion cubic meters by increasing the utilization of the LNG terminals - i.e. ports in which “liquefied natural gas” is handled. This corresponds to a 58 percent increase. To do this, existing terminals would have to be trimmed from their current 50 percent capacity utilization to 90 percent. Germany does not yet have a single LNG terminal. The federal government is planning to build two liquefied gas ports, which were not expected to be completed until 2026 a few months ago. However, we are currently intensively examining whether earlier completion of the site in Wilhelmshaven can be accelerated.

Potential alternative sources of supply are not sufficient

Even if the potential for increase in all sources of supply is exhausted, there will still be a gap of around 15 percent of the natural gas required in Europe. This value does not take into account temperature fluctuations, which can mean five to ten percent up or down. This gap represents a major problem, particularly for Germany with its strong dependence on Russia, because, according to the analysis, German natural gas requirements will not change significantly by 2030: If natural gas currently accounts for around 26 percent of the primary energy requirements required in this country, the share will be reduced to eight Over the next few years it can even rise to 30 percent and only then slowly fall. Although the overall demand for primary energy is falling due to energy efficiency measures, this initially has an impact on other energy sources.

From a global perspective, the natural gas production volume of all other countries would have to be increased by 8.5 percent in order to get by without Russian gas exports. Assuming that global consumption volumes remain constant and production volumes are increased as described, according to the analysis, the natural gas reserves without Russian or CIS sources will be sufficient to supply all countries without Russia/CIS for at least 40 years. “The problem is: Neither the world nor Europe can control the supply of energy to individual countries. This means: Every country must develop its own strategy to substitute Russian imports,” said Deeg.

In Germany, natural gas cannot easily be replaced by hydrogen and renewable energies in either the short or medium term. 80 percent of the natural gas consumed here is used to generate heat, specifically for heating buildings, industrial processes and the operation of natural gas-based CHP systems (combined heat and power) to generate heat. The remaining 20 percent comes from electricity generation through CHP systems.

Four concrete measures to reduce natural gas demand in the short term

Specifically, the study team from evety and Horváth recommends the following measures for Germany to compensate for short-term shortages of natural gas:

1. Reduce and replace electricity generation by gas power plants
In order to reduce the amount of natural gas required by gas power plants to generate electricity, existing coal and nuclear power plants should be used more heavily in electricity production.

2. Shut down gas CHP
Shut down natural gas-based combined heat and power (CHP) systems, such as combined heat and power plants. The electricity generation from CHP plants should be balanced by other power plants (coal or nuclear, see 1.). More heat could be generated by peak-load boilers with lower natural gas requirements.

3. Reduce industrial natural gas consumption
, curtail processes that use energy generated from natural gas or switch to alternative energy sources such as green hydrogen.

4. Reduce room temperature in buildings
Even a room temperature reduced by 1 degree Celsius in all buildings in Germany can reduce the local natural gas requirement by 2.5 percent.

Long-term measures to secure supplies

In the long term, industry and municipalities urgently need further measures to secure supplies. The study team from evety and Horváth recommends that hydrogen should be given greater consideration when substituting coal, gas and oil in the future due to its increased economic efficiency.

– Use increasing electricity generation from fluctuating renewable energies.
The overproduction of renewable energies will increase from currently around five percent to up to 50 percent in 2030. Today, excess energy is curtailed or exported at extremely favorable conditions. This potential can be meaningfully used by electrolyzers to produce hydrogen and thus replace natural gas.

– Realize cost reductions in the production of hydrogen
The costs for electrolysers will fall massively by up to 85 percent by 2030 due to economies of scale. Combined with the increasingly cheaper production costs of electricity from renewable energies, hydrogen is quickly becoming competitive - with current natural gas prices already today, there is simply no generation capacity.

– Aim for technological openness in the production of hydrogen
The rapid ramp-up of the hydrogen economy requires suitable infrastructure. To be economically successful, they quickly need large amounts of hydrogen. This circular relationship can be quickly resolved with technological openness in hydrogen production. The discussion about non-renewable hydrogen with reduced CO2 emissions, for example blue hydrogen from Qatar, was avoided for a long time, but is clearly gaining momentum in the current political situation.

– Do not underestimate procurement and price stability through renewable energies.
Conventional energy sources bring with them supply and price risks due to their uneven geographical distribution and political influence. Renewable energies through the use of wind and sun can be sensibly generated over a significantly larger geographical area and brought to Germany as hydrogen or its derivatives (e.g. ammonia). This means that Germany can be supplied with energy sustainably and, above all, safely. This is particularly important for the survival of industry, which is the first to be shut down in the event of bottlenecks.

Sources: Horváth AG, pte


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