To protect energy suppliers from the massive effects of a lack of Russian oil and gas imports (also due to a potential embargo) while preventing further massive price explosions, the German government is working on a “protective shield” for ailing energy companies. Legislative changes are designed to create the conditions for the federal government to invest in companies like Uniper, which is reportedly on the brink of bankruptcy.
The German news agency has received a draft amending the Energy Security Act. This regulates financial support up to and including the acquisition of company shares to prevent the bankruptcy of a gas supplier. The aim is to increase the radius of action of the German government, according to coalition circles. The traffic light groups are expected to reach an agreement on Tuesday. The circles said drastic price hikes for gas customers should be prevented with stabilization measures for companies like Uniper, probably worth billions.
Russia had severely restricted supplies through the Nord Stream 1 Baltic Sea pipeline. As a result, the largest importer of Russian natural gas in Germany, Uniper, faced turbulence and called for state aid. The federal government confirmed it would talk to Uniper about stabilization measures. According to a spokeswoman, the Ministry of Economic Affairs is working on solutions ‘under high pressure’. A spokeswoman for Economy Minister Robert Habeck (Greens) said on Monday that the aim was to prepare for an ongoing tense situation in the energy markets and to fill the toolbox. The energy markets must remain functional.
Price jumps distributed more fairly?
The existing Energy Security Act allows utilities to “adjust prices”. To do this, the federal network agency must formally set a “significant reduction in the total amount of gas imported into Germany”, which has not yet happened. If the mechanism is activated, suppliers can pass on their current additional costs to their customers in a short time and lead to large price increases.
Habeck had warned of a possible “price explosion” at some public utilities. To distribute price increases more fairly among consumers, the federal government is therefore working on a pay-as-you-go system. This means that, as mentioned, the loads could be distributed more evenly among all consumers.
Major pipeline maintenance work
The situation could be further exacerbated by an annual maintenance of the Nord Stream 1 pipeline from 11 July. There is serious concern that after the works, which usually last ten days, there will be no more gas flow and the Moscow gas tap will no longer open.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
