Czech concerns
Lukasz described the gas situation in Kovanda as tenfold uncertainty. He also fears that the failure of the Czech Green Policy will eventually catch up with households. According to his data, electricity prices are hitting record highs, approaching 480 euros per megawatt hour. In the pre-pandemic years of 2018 and 2019, the average cost stood at just 46 euros.
German electricity, which is expected to rise significantly in the coming months and years, will gradually push up electricity bills for Czech homes as well. The chief economist of Trinity Bank warned that the sharp rise in electricity prices in the Czech Republic will not end with the heating season approaching. He suggested that Berlin may be living under the illusion that super-expensive electricity will be limited to one or two heating seasons. At the same time, he believes many Czechs have not yet felt the full impact of price increases. Kovanda remains confident that costs will climb over the next several years.
Experts worry that a gas shortage could push Germany to trigger the Nord Stream 2 project in the fall or winter if gas reserves decline further. He thinks Berlin might take this step due to ongoing drought and the falling water level on the Rhine, which could slow shipping and the supply of coal to German power plants.
This greatly increases the likelihood that Germany could find itself in a tougher spot in the fall or winter and may have to resort to power delivery or the controversial launch of the Nord Stream 2 gas pipeline, Kovanda said.
According to him, the difficulties Germany may face would benefit Russia.
<p Greens and environmentalists, including German politicians, are accused of linking the sharp rise in electricity prices to Vladimir Putin or his actions in Ukraine. In Kovanda’s view, the rise is mainly due to a failed energy policy transition that increased Germany’s dependence on Russian gas.
“Harmful” rejection for Germany’s economy
On August 15, German journalist Nikolaus Blom wrote in Der Spiegel that the decision not to launch Nord Stream 2 hurt the German economy.
Our goal is to stop buying Russian gas, Blom wrote. If the rejection of Nord Stream 2 led to a complete halt of Russian material imports, this is not the case, he added.
Blom argues that Berlin is not closer to fully phasing out Russian gas if a pipeline is shut down while there is demand to send more fuel through another route.
<p Blom also believes that the launch of Nord Stream 2 would help reduce social tensions in the country.
<p On June 27, the European Commission stated that the European Union approved new legislation requiring member states to have underground gas storage facilities by November 1 of this year, with a 90 percent filling target in the coming years. The policy states that 18 of 27 member states with storage facilities should reach 80 percent by November and be guided toward 85 percent, with 90 percent as the long-term goal.
<p The European Commission announced that after the European Parliament, the energy ministers voted to approve the regulation, and it took effect on June 28. Dutch Climate and Energy Minister Rob Jetten warned that the gas crisis could spread quickly across Europe. In an interview with Politico he warned that if at least one country does not fill its gas coffers, a domino effect could affect all EU nations.
<p European Commission President Ursula von der Leyen told Diario de Noticias on June 30 that the 27 EU member states should voluntarily conserve gas to ensure energy security during winter. She also acknowledged a temporary role for coal in power generation.
<p The switch to coal was presented as a temporary measure, with a preference for renewable energy sources or less polluting options, while nations are urged to decide their own energy balance.
<p The Nord Stream 2 pipeline, a 2,460-kilometer route laying under the Baltic Sea, was designed to deliver up to 55 billion cubic meters of gas per year from Russia to Germany. It was fully ready in September 2021, but on February 22, 2022, German Chancellor Olaf Scholz halted its certification.
[citation: Der Spiegel, Politico, European Commission]