Germany imported roughly 55% of its gas from Russia before the invasion of Ukraine and has since reduced its dependence to 35%. Yet German gas supplies are slated to only last three months if Russia decides to cut off supplies completely.
Habeck said that reversing the planned shutdown of the nation’s three nuclear plants would constitute the “wrong decision” given “how little we would save,” as the three facilities would only account for 2% of gas use, according to German state-funded news outlet Deutsche Welle. Former German Chancellor Angela Merkel greenlit the gradual closure of the nation’s nuclear plants following the 2011 nuclear meltdown in Fukushima, Japan.
Habeck dismissed concerns of gas shortages by assuring the public that “we have a really good chance of getting through the winter” if households and businesses cut energy usage by 15% to 20%. Nevertheless, Habeck is open to keeping one plant open in the manufacturing region of Bavaria depending on the results of a stress test on the German power system. He asserted that Germany must pivot entirely away from fossil fuels to avoid future turmoil wrought by geopolitical conflicts.
Germany recently unveiled a winter gas surcharge of 2.4 euro cents per kilowatt hour, according to Deutsche Welle, with German Chancellor Olaf Scholz vowing that the nation’s government is “working on a further relief package” and “will leave nobody alone with these increased costs.”
Meanwhile, German finance minister Christian Lindner argued that keeping the nuclear plants open would be a better option than relying on coal plants. The nation should “reserve all possibilities,” according to Lindner, who noted that he would support an extension of the nuclear phaseout by “several years” under current conditions.
Other European nations have recently proceeded with shutdowns of nuclear facilities despite rising energy prices. Switzerland, for example, slowed production at Beznau nuclear power plant to protect local fish populations. In the United States, however, the Inflation Reduction Act created nuclear production tax credits, amended existing renewable energy credits to incorporate nuclear power, and funded the production of fuels such as enriched uranium, according to an analysis from the Atlantic Council.
Russia is likewise the world’s third-largest oil producer and the overall largest exporter of oil to global markets, according to the International Energy Agency. Although oil continues to be exported from Baltic and Black Sea ports, trading houses are purchasing and storing the oil in Europe, where it could eventually be resold in avoidance of international sanctions, a March report from the Federal Reserve Bank of Dallas explained.
“The surge in global fuel, electricity, residential natural gas and food prices, as well as the supply-chain disruptions caused directly by the invasion of Ukraine and indirectly by the sanctions against Russia, will sustain inflationary pressures in 2022,” the analysts said. “If the bulk of Russian energy exports is off the market for the remainder of 2022, a global economic downturn seems unavoidable.”