Germany to Rely Less on Russian Gas

German Economy Minister Robert Habeck calls on Germany to Rely Less on Russian Gas

Reliance on Russian natural gas must be reduced, said Minister Robert Habeck.

German Economy and Climate Protection Minister Robert Habeck
German Economy and Climate Protection Minister Robert Habeck attends a session of the lower house of parliament Bundestag in Berlin, Germany, January 13, 2022. REUTERS/Hannibal Hanschke

Germany’s Economy Minister Robert Habeck called for Germany to reduce its dependence on Russian natural gas as tensions remain in the Ukraine.

The Nord Stream 2 is a 750-miles pipeline connecting Russia and Germany that is under the threat of sanctions due to Russia’s involvement in the Ukraine crisis.

“We must improve our preparedness for next winter,” said the Green Party politician. Habeck added that the Ukraine crisis is forcing Germany to “create other import opportunities and to diversify its supply, including infrastructural issues.”

Germany is reliant on Russian gas for over a third of its energy needs. Energy is an essential driver of growth and development worldwide. Energy security is a complex question where diversification is a key element.

element of energy
If more countries smooth the way for the development of diverse energy sources, it could lessen the impact of supply chain disruptions like those seen during the Covid-19 and Ukraine crisis.

The Ukraine crisis comes as Europe struggles with rising gas prices and divided opinions on how to reduce dependence on fossil fuels in response to climate change. An increase in the use of renewable energy could reduce dependency on foreign energy sources. 

The Nord Stream 2 pipeline, if approved, would also bypass Ukraine and potentially deprive it from lucrative transit fees. Habeck criticised the gas market for being completely deregulated.

According to the International Energy Agency, $2.2 trillion in investment in worldwide oil production is needed by 2030 to meet the forecasted growth in demand.

Some of the measures which the German Federal Ministry for Economics and Climate Action Minister presented in January include:

  1. Amendment of the Renewable Energy Sources Act (EEG) to set the electricity supply to be based on 80% renewable energy by 2030. “The expansion of renewables is in the overriding public interest and in the interest of public security,” said Habeck.
  2. A solar acceleration package with broad measures to deliver progress on solar energy.
  3. Onshore Wind Power Act to speed up expansion.
  4. Bringing down the price of electricity by financing the renewable energy surcharge (EEG) from 2023 will ease the financial burden on consumers.
  5. Carbon contracts with the industrial sector to usher in climate-neutral manufacturing methods. This needs a reliable funding and investment framework.

However, much of the new oil and gas supplies are concentrated in countries that may lack open and transparent investment administrations. The main challenge is not a lack of resources but rather the need to create the proper environment to realise the potential.

Any country that seeks to attract investments should welcome measures aimed at increasing transparency and openness, two of TOP Beraten’s foundational values.

Governments that can create a transparent and non-discriminatory regulatory environments, favourable investment climates, rule of law and physical safety of energy infrastructure would facilitate the achievement and sustainability of energy goals.

A transition to clean energy is an investment towards securing a more sustainable future. The economic and national security of countries would be less compromised in face of crisis events such as the Covid-19 pandemic or the current tensions in Ukraine.

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