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    Germany unveils plan to phase out Russian energy


Germany says it will take until 2024 for the country to become fully independent of Russian gas.

by: NGW

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Germany unveils plan to phase out Russian energy

Germany's government on March 25 unveiled an ambitious plan for phasing out all imports of Russian oil, gas and coal as quickly as possible in response to Moscow's actions in Ukraine.

In a report, the government noted that Russian gas was used to cover 55% of German consumption last year but that the level had since fallen to 40%. It will take until 2024 for Germany to become fully independent of Russian gas, and achieving this will not only require finding alternative supplies but also significantly reducing consumption, in part by expanding the use of renewable energy.

Germany receives the majority of its Russian gas via the Nord Stream 1 pipeline, as well as some additional volumes via the Yamal Europe pipeline that runs through Poland and Belarus. In response to Moscow's actions in Ukraine, the government has halted the certification process for Russia's Nord Stream 2, and is supporting the development of LNG terminals instead.

Dutch gas gird operator Gasunie is leading a consortium to develop a 8bn m3/yr LNG terminal in the German port of Brunsbuettel. Gasunie signed a memorandum on financing for the project with German development bank KfW earlier this month, and Shell has agreed preliminarily to book a "substantial" share of its regasification capacity.

Germany's Uniper announced days after Moscow launched its invasion of Ukraine that it was looking to revive another 9.8bn m3/yr LNG project in Wilhelmshaven. The company invited binding bids for the facility's capacity in October 2020, but after a weak response, it said it was considering building a hydrogen import terminal instead. But back then, it was assumed that Nord Stream 2 would come online.

At Stade, developer Hanseatic Energy Hub (HEH) invited expressions of interest in capacity bookings at a 12bn m3/yr proposed terminal. HEH held a non-binding phase for capacity interest in February 2021, reporting good results, but has repeatedly delayed holding a binding phase because of the market turbulence that ensued in the wake of the coronavirus pandemic.

Critically, the developers have stressed that all three terminals can import low-carbon hydrogen in the future, giving them a role in the German energy mix even if gas use is significantly reduced. 

Russian supplies account for just over a third of the oil that is refined in Germany, according to the government's report, but this could be reduced to about a quarter "in the coming weeks" if contracts that are due to expire are not renewed. Alternative supplies can be sourced from German and Polish ports to cover the shortfall, the report stated.

Likewise, German imports of Russian coal are expected to fall from 50% to 25% in the next few weeks, according to the report, and the aim is for the country to be completely independent of Russian coal by autumn.