By Nicholas Earl
German households will suffer the heavy price of a Russian supply squeeze on European gas flows, with energy users set to cough up a further €500 towards a new levy this winter.
This is to fund the country’s plans to replace Russian natural gas and support struggling utilities over the winter.
It will be imposed on top of rising energy bills, with Economy Minister Robert Habeck hoping to distribute the cost of securing alternative supplies evenly among households.
The levy was planned by the German cabinet in a bid to help Uniper and other importers cope with soaring prices amid reduced Russian supply.
Its price has been set at 2.4.19 cents per kilowatt hour (kWh), according to Trading Hub Europe, which will cost the average family of four around €480 this year.
This will be imposed from October 2022, and remain in place until April 2024.
German industry makes up 25 per cent of the country’s overall energy demand, with its government already reaching into the public purse to support Uniper’s €15bn bailout package earlier this year.
German Economy Minister Robert Habeck argued the levy was a consequencec of Russian aggression, typified both by its invasion of Ukraine in February and its retaliation to Western sanctions on its energy supplies.
Habeck said: “The levy is a consequence of Putin’s illegal war of aggression on Ukraine and the artificial energy shortage caused by Russia.”
He also tried to assure households that further relief measures were in the pipeline this winter, after Chancellor Scholz promised an additional relief package at his summer press conference last week.
However, there are concerns interventions could drive up German inflation, which is already running at an elevated 8.5 per cent.
This would further increase household energy bills will push the cost of living up further.
Russia has cut gas flows via the Nord Stream pipeline into Germany down to 20 per cent in retaliation to Western sanctions following the country.
Kremlin-backed gas giant Gazprom has blamed faulty and delayed equipment, while the EU considers the move politically motivated.
This has exacerbated ultra-high energy prices and riased fears of supply shortages.
Despite the challenges, Germany has managed to top up its storage supplies to more than 75 per cent last Friday.
This a couple of weeks ahead of its September target.
Germany has 23.3bn cubic metres (cbm) of underground gas storage, a little more than a fifth of the 100 bcm of gas used in 2021.
The next targets are 85 per cent by October and 95 per cent by November, which are embedded in a number of provisions aimed at helping Germany to avoid a gas crisis this winter,
The country is currently at phase two of a three-stage emergency plan formulated after a reduction in gas flows from Russia, its main supplier.
Meanwhile, major cities such as capital Berlin, Munich, Nuremberg and Hanover have brought in energy saving measures.
This includes switching off spotlights and fountains at night, and imposing controls on heating and hot water in municipal buildings and leisure centres.
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