‘We hope for the best and prepare for the worst’

With this week:

  • Maintenance work on Nord Stream 1, an important gas pipeline to Europe, has begun.
  • The German government is preparing with measures to prevent a ‘nightmare scenario’.
  • In the Netherlands, last year the state-owned company EBN tried to take full public ownership of the Bergermeer gas storage facility.

On Monday, the 10-day maintenance of Nord Stream 1, an important pipeline for the gas supply to Europe, started. Maintenance can cause even more unrest in the European gas market: Several countries are afraid that the supply via this pipeline after maintenance will no longer return to the old level.

No country in Europe is as vulnerable as Germany. A definitive stop would throw Germany into a recession, as the largest foreign consumer of Russian natural gas, politicians and economists believe. On Monday, Chancellor Olaf Scholz spoke for two hours with CEOs of German companies about energy security. “We hope for the best and prepare for the worst,” said German Economy Minister Robert Habeck, who was also present.

The government is trying to prevent a “nightmare scenario” with measures, Habeck said. In the case of Berlin, it has been clear for several months that Russian President Vladimir Putin is using gas as a ‘weapon’.

Consequences are already noticeable at Uniper

The gas supply has recently been well below the agreed level. The German energy company Uniper has therefore applied for emergency aid from the German government on Friday. This should prevent the sick group from going under. Among other things, the company is pushing for (partial) nationalization.

Last week, it became clear that Uniper, which also owns a number of power plants in the Netherlands, is in great financial distress due to Russia’s cuts in gas supplies. The company is now forced to pick up gas elsewhere, but it cannot pass on the much higher prices to customers. As a result, Uniper’s cash register is being emptied of tens of thousands of millions a day.

There was a glimmer of hope last weekend when Canada announced it would return a controversial gas turbine to the Nord Stream 1 pipeline between Russia and Germany, in the hope that Russia will supply more gas as promised.

Of course, the problems do not only affect Germany. Europe must prepare for Russia’s gas supply to stop completely next winter, while several European countries are still heavily dependent on Russian gas, the International Energy Agency (IEA) recently warned.

In order not to go into the winter in the Netherlands with an empty gas storage, the cabinet says that they have been working on initiatives since the spring. The cabinet will also allow the coal-fired power plants to run at full capacity again while they were on the back burner due to climate targets.

Gas storage in public hands?

At the end of last year, the state-owned Energy Management Netherlands (EBN) tried to get the Bergermeer gas storage completely in public hands. It is the only one of the large gas storage facilities where the so-called high-fuel gas, which is widely used in industry, is stored. An offer in the warehouse, where Gazprom has an important part of the capacity, was to ensure security of supply next winter. In the end, the nationalization fell through because EBN did not get permission from the Ministry of Economic Affairs, which devised another method of filling the gas storage. In the meantime, questions have been asked from VVD and CDA.

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At the same time, the EU is weakening the requirements for the Netherlands to rebuild its gas reserves. New EU rules require member states to have their stocks filled up to 80% before winter. But for the Netherlands, the filling obligation has been reduced to 63%, it appears from a footnote in a letter that Minister Rob Jetten (Climate, D66) sent to the House of Representatives on Tuesday. The government is still striving to reach 80%, a spokesman for the minister said. But with the disappearance of the EU requirement, an important means of pressure disappears.

Shell will build a large hydrogen factory

Oil and gas multinational Shell continues the construction of a large hydrogen factory on the other Maasvlakte in the port of Rotterdam. The company announced last week that it had made a final decision to invest approximately $ 1 billion in a 200 megawatt ‘electrolyzer’. It is one of the largest hydrogen factories in the world. Shell will start production in 2025 and make about 60,000 kilos of hydrogen a day.

Fly with a kite

Joep Breuer (40) is the technical director of KitePower. This makes huge kites that, when attached to a game, can generate electricity in remote and inaccessible places. FD talked a lot with him.

That was it again. The new FD Climate Newsletter will be published next Tuesday. If you have any tips, comments or questions, please send an email to feedback@fd.nl.

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