The federal government has decided to revise its 1975 Energy Security Act. This update will allow law enforcement to expropriate critical infrastructure operators while government agencies are on offer “Very wide range of options for crisis management”.
The update of Germany’s 1970s law, introduced in response to the oil shock, is being accelerated as Russia’s deadline nears when the country will only accept rubles for its gas supplies.
“Russia’s war of aggression against Ukraine, which violates international law, has led to a tense energy situation. Prices are high, uncertainty is high, and there are risks. So we have to be prepared for the situation to get worse.”explained Vice Chancellor Robert Habeck.
“That’s why we are once again sharpening and modernizing our instruments significantly with the amendment to the Energy Security Act”he added.
With gas supplies 33% full, preparing for the worst-case scenario is the focus of this historic overhaul.
“In this way we are strengthening crisis prevention and can act quickly and comprehensively. It’s about doing everything we can to maintain basic services.”said the Vice Chancellor.
Mr. Habeck has already called on German citizens to save energy. “I ask everyone to help save energy now”he told the Funke media group on April 14.
The update of this relatively old law, which now has to be submitted to the German legislature in a hurry, will bring some significant changes.
First, the government will create a digital platform to adopt crisis measures more quickly. In the gas sector, traders and industrial consumers must register and provide data on their gas purchases and consumption. The aim is to enable the authorities to quickly close companies in the event of a gas shortage, said the Ministry for Economic Affairs and Climate Protection.
Second, Berlin will implement regulations to strengthen the EU solidarity mechanism. According to the EU regulation on gas supply security from 2017, EU countries must help each other in the event of gas shortages. “Without these measures, the obligation under the Supply Security Ordinance to supply gas to EU member states cannot be met”the ministry said in a statement.
Third, the law will allow the government to implement “Extraordinary measures for crisis prevention”, which can be applied before an emergency occurs. The aim of these measures is to prevent a threat to the energy supply, according to the ministry.
They could consist of placing critical infrastructure under government supervision and ordering price adjustments.
Germany has always been reluctant to nationalize private companies. Berlin initially temporarily placed the German subsidiary of the Russian state-owned company Gazprom under state control, but continued to resist the idea of expropriation.
Now the government is thinking “Expropriation as a last resort” in the event that operators of critical infrastructures “can’t cope enough anymore” to their obligations. The move comes as the country’s largest gas storage facility in Rehden, owned by Gazprom, continues to experience very low storage levels.
This measure takes up the proposals of the European Commission. In March, the EU executive unveiled a new mandatory certification scheme for gas storage infrastructure owners and warned that those who pose a risk to Europe’s security must relinquish ownership or control of facilities.
In addition, the federal government will take measures to enable suppliers to quickly adjust gas prices in the event of a crisis. The government wants to avoid chain reactions and maintain supply chains and market mechanisms for as long as possible.
In addition, the Energy Market Act will be amended to allow the government to order companies to stop using it “critical components” if public order or national security are “negatively influenced”. This could happen, for example, if the manufacturer of the component is under the control of a non-European government.
Finally, the decommissioning of gas storage facilities must now also be reported to the Federal Network Agency in order to prevent gas storage facilities from being unavailable without the Federal Network Agency being informed.