Germany moved to keep two nuclear plants available this winter in a policy reversal, as European leaders scrambled for emergency fixes to the deepening energy crisis.
Moscow’s move to switch off its main gas pipeline to Europe sent gas and power prices surging on Monday, adding urgency to politicians’ efforts to stem a crisis that risks turning into an economic, social and financial disaster too.
In a hastily arranged call, German Chancellor Olaf Scholz and French President Emmanuel Macron made an energy pact to help each other through the winter, as they forged a united front ahead of EU negotiations later this week on crisis-fighting tools.
European Union energy ministers are set to meet on Friday, and the proposals on the table so far include power-demand curbs, measures to boost liquidity in the sector as collateral demands skyrocket and a price cap on gas. In a measure of how the bloc is ready to rip up long-hallowed policies, there’s even a draft proposal to make it cheaper to pollute to reduce the cost of electricity.
Germany’s move to keep two nuclear plants in reserve also marked a policy shift that was a difficult move for Scholz’s coalition government. Economy Minister Robert Habeck insisted that the nuclear exit enacted in the wake of the Fukushima disaster was still in place but two plants will be kept in reserve in case they’re needed — for this winter only.
“I will do everything to ensure Germany’s energy security,” Habeck said. “This way, we can act if worst comes to worst.”
Hours earlier, officials and executives predicted that Germany will struggle to meet its targets of filling up gas storage with Nord Stream shut.
With Germany short of gas and France short of electricity as its once mighty nuclear fleet has been hit by a series of issues, the two countries agreed to back each other up through the winter.
France will complete works in the coming weeks to be able to export gas to Germany “each time it’s needed” this winter, Macron said. At the same time, Germany will boost power output to be able to export more electricity to France when demand peaks.
French power prices for the start of next year are about 30% higher than in Germany as Electricite de France SA struggles with its nuclear plants. Usually, a major exporter of power at peak times, France is demanding imports this year — one of the reasons European prices are so high.
As Macron called on French citizens to cut their demand by 10%, Habeck said more measures would be needed. Both countries back an EU-wide windfall tax on energy profits, Macron said. Macron also called for oversight of “speculation” on energy prices, and backs calls to sever the link between gas prices and those of power.
