Status: 06/28/2022 1:38 p.m.
According to leading economic researchers, the risk of a gas supply disruption has decreased significantly since April – thanks to fuller storage facilities. However, an immediate shutdown of Russian gas supplies would have massive consequences.
According to estimates by several economic research institutes, the likelihood of a gas supply shortfall has decreased significantly over the past three months. This is the result of their simulations of the future development of the supply situation. However, the economy in Germany remains threatened by a lack of gas supply, the researchers explained.
Even if there were no deliveries of Russian gas, the situation in Germany would be less critical in the coming months than it was in April. The main reason for the relative relaxation is that gas storage facilities in Germany are now about 60% full, compared to just 30% in April.
No shortage of strangled Russian supplies
The researchers also see little danger in scenarios in which Russian deliveries, which are currently reduced to 40%, continue. “Then, even in the event of unfavorable constellations, there is no threat of gas bottlenecks for the industry,” according to the institutes in their analysis.
At the end of 2023, gas storage would only be 14.1% full, after 60.6% in December 2022. “This would mean that the German economy would be significantly less supplied with gas in 2024”, according to the institutes. “However, other sources of supply that have not yet been considered in the simulation should then be within reach.”
If deliveries are stopped, there is a risk of growth losses
However, the situation is different in the case of an immediate stoppage of delivery. The supply of the industry would then be in danger. If this were to happen, there would be a 20% chance of a gas shortage of at least 23.8 terawatt-hours (TWh) within the next year – “in the very unlikely worst-case scenario, would miss almost 160 TWh”.
The loss of production of the gas-intensive industries and their direct customers would lead to a loss of added value of approximately 46 billion euros, or even in the worst case 283 billion euros. This corresponds to up to a tenth of the German economic output of the past year.
Passing the costs on to consumers
Economics researchers from the IfW, ifo, RWI and IWH call for policies to enable “energy shock adaptation” in business and society. The increased costs of supplying energy sources should be passed on to consumers in due course, “because then energy consumption will decrease and more favorable constellations of gas availability will become more likely”. Instead of state bonuses for energy savings, households in need should be supported with targeted transfers.