Germany plans to delay closing the country’s last three nuclear power plants as it faces energy shortages this winter after Russia curbs gas supplies to Germany , government officials said, according to the Wall Street Journal . Although temporary, it would mark the first time Germany has departed from the policy of phasing out nuclear energy proposed in the early 2000s, which has become political consensus over time.
The report also said that the decision has not been formally adopted by the German cabinet and may require a parliamentary vote. Three senior government officials said details were still being discussed. A cabinet decision is still pending the results of Germany’s energy needs assessment, which is due in the next few weeks, but officials said it was a foregone conclusion.
However, a spokesman for the German Ministry of Economic Affairs later said that the media reports on Germany’s decision to continue operating nuclear power plants were “unsubstantiated” . Germany is still conducting power stability stress tests and will decide whether to continue operating the remaining nuclear power plants based on the test results. The news stimulated U.S. natural gas futures to rise more than 7% to an intraday high of $9.36/million British thermal. The price of Dutch TTF natural gas futures on the Intercontinental Exchange rose more than 10% on the day.
German electricity prices surged above 500 euros per megawatt hour for the first time on the European Energy Exchange AG as the energy crisis worsened. The power generation of the three power plants mentioned above accounts for about 6% of Germany’s power generation in Q2 2022. Germany’s extensive reliance on gas-fired power plants has led to a lack of natural gas supplies following the Russian-Ukrainian conflict, prompting Germany to restart mothballed coal-fired power plants to increase power generation.
On Tuesday, German Economy Minister Habeck signed a memorandum of understanding with energy giants Uniper and Rheinland Group , which will secure two floating LNG receipts at Brunsbuettel and Wilhelmshaven from this winter until March 2024. The terminal has sufficient inventory. On Monday, Klaus Müller, head of Germany’s Federal Network Agency, said the country must reduce gas consumption by at least 20 percent. Even if German gas inventories reach their target of 95% by November, they would only cover Germany’s heating, industrial and power needs for about two and a half months if Russia cuts supplies entirely, he said .
Germany ‘s natural gas consumption fell significantly in the first half of 2022 , even taking into account weather differences, the German utility industry association (BDEW) said on Tuesday . Germany’s natural gas consumption in the first half of 2022 fell by almost 15% year-on-year, BDEW calculated based on preliminary data, largely due to a much milder spring. Even adjusted for temperature effects, natural gas consumption fell 8% year-on-year, BDEW said. Significant increases in energy prices, weak economic development, and aggressive energy-saving measures by individuals may also have contributed to the decline.
Zero Hedge said Germany has some short-term crisis management tools but may not be enough to stop an economic crisis as energy hyperinflation devastated households and businesses before winter began. Gazprom said on Tuesday that European gas prices could soar by 60% this winter to more than $4,000/thousand cubic meters (about 400 euros/ MWh).