Interview: Gas crisis: industry president wants to ramp up coal-fired power plants

Berlin.
BDI President Siegfried Russwurm fears for the German gas supply from Russia – and is therefore making an unusual move.

Is Putin turning off the gas taps for the Germans? Deliveries from Russia have already been curtailed. Siegfried Russwurm, President of the Federation of German Industries (BDI), in an interview with our editors, makes a dramatic appeal to German politicians to prepare for a gas freeze. Nuclear power no longer plays a major role in his considerations.

How are four months of war in Ukraine affecting the German economy?

Siegfried Russwurm: The Russian invasion is also making this year extremely challenging economically. Of the War significantly weakens economic growth. There are sectors such as the glass, ceramics or steel industries that are suffering directly, but this has significant consequences in a number of other areas. Companies are adapting to the situation and fighting their way through. Things are going better in a few sectors, such as healthcare.

The federal government still expects growth of 2.2 percent for the current year – is that too optimistic?


sootyworm: We see a lot of uncertainties. Supply networks and supply chains are stretched to the breaking point. We’re still dealing with that Coronavirus and its consequences – acutely due to China’s failed zero-Covid policy, perspectively in the concern about new virus variants.


Do you expect a recession?

sootyworm: We are currently still assuming a positive number. But our expectations of production and exports are lower than at the beginning of the year. We need framework conditions that our companies can cope with – costs, taxes and levies. The situation remains fragile.

What would be the consequences of an import ban on Russian gas?

sootyworm: A failure of Russian gas supplies would immediately lead to massive slumps in industrial production and burden the whole of Europe. Then we would be clearly in the red, huh Economy and employment.

country

Ukraine

continent

Europe

capital city

Kyiv

Surface

603,700 square kilometers (including Eastern Ukraine and Crimea)

resident

approx. 41 million

head of state

President Volodymyr Zelenskyy

head of government

Prime Minister Denys Schmyhal

independence

August 24, 1991 (by the Soviet Union)

language

Ukrainian

currency

hryvnia

What do you expect from the government to secure the energy supply?

sootyworm: It is right to allow the import of liquefied gas, for example from North America or Qatar – and to quickly build the infrastructure on the coast. We also have to reduce gas consumption as much as possible, every kilowatt hour counts. Priority must be that to fill the gas tank for the coming winter.

My appeal is: stop gas-fired power generation now and immediately coal power plants get from the reserve. If the supply situation in the summer actually develops as difficult as it is currently perceived, we must take this option immediately.

After all, importing electricity from neighboring countries has its limits. And whether we are more now or in winter Money converting it into electricity is not significant for the CO emissions, but in this way we at least ensure higher filling levels in the gas storage facilities.

How realistic are Traffic Light’s plans to bring forward the phase-out of coal from 2038 to 2030?

sootyworm: It is currently about short-term bridging measures to secure the energy supply, not about 2038 or 2030. I am not saying that a coal phase-out in this period is completely out of the question.

Renewable energies don’t seem to play a special role for you.

sootyworm: But on the contrary. Here, too, we have to accelerate massively – now! To secure the supply and for the transformation of our country to the climate-neutral industrial country.

Which renewables do you rely on?

sootyworm: Germany must finally say goodbye to paralyzing small-small debates and blocking attitudes and get off the brakes on the expansion of renewables. Politicians and administration must switch on the turbo as soon as possible for the designation of new areas for wind and solar power plants and for faster approvals. the Power generation from wind is by far the most important source of renewable energy in Germany.

The FDP has rekindled the debate about longer nuclear lifetimes. How realistic is that?

sootyworm: In its examination, the federal government came to the conclusion that a term extension with the remaining three miles not worthwhile. And the protest of the operators against this statement was not particularly loud. Nevertheless, if these three nuclear power plants are also taken off the grid at the end of the year, then the need for compensation will be even greater, which means in the short term: more coal. Everyone has to consider that.

In the event of bottlenecks in the energy supply: Do you accept that private households should continue to be supplied, but not industrial companies?

sootyworm: The idea that there could be a priority desk for private households at the Federal Network Agency is wrong. There is no experience like ours gas network reacts when we feed in massively from the north and west instead of from the east. I’m not sure how much of that gets down south. Physics has an important word to say. We should do everything to ensure that there are no bottlenecks.

Ukraine war – background and explanations for the conflict

How do you think about driving bans and speed limits, as the SPD has now brought up for discussion?

sootyworm: I live in a village with 600 inhabitants and I have a very clear opinion on a Sunday driving ban. Unlike in the 70s, nowadays you have to get out of the village for all sorts of things. If the state of country folk says that she is not allowed to leave her village on Sunday, it does not lead to anything good. Saving energy yes – but we need a social consensus for this.

Don’t you also see this consensus for a speed limit on motorways?

sootyworm: people see that energy more expensive – and are smart enough to decide for themselves how to behave in order to save energy.

Secure?

sootyworm: What else does the state want to dictate? How hot can the temperature be in the living room? People will behave properly of their own free will when they see what you power consumption costs. And those who don’t will have to pay a very high price for it.

According to this logic, discharges tend to be a hindrance.

sootyworm:Targeted relief for those who urgently need it is correct. Unfortunately, energy costs will continue to rise. It must be clear that the state is not each price increase can compensate.

The tank discount fizzles out because the mineral oil companies fill their pockets.

sootyworm: The decisive question is what consequences one draws from the price development. Many are dependent on driving to work. For the rising fuel prices could be meaningful over the distance allowance compensate.

Is it a bad assumption that mineral oil companies are enriching themselves from the crisis?

sootyworm: I don’t know that. We are talking about a complex global market in a crisis situation. This results in shortages and increases in costs Supply, transport, further processing. All of this must be thoroughly analyzed and documented before general and serious suspicions are expressed.

Are demands to levy a so-called excess profit tax on war profiteers out of thin air?

sootyworm: I find it very difficult to distinguish profit from excess profit. Where’s the limit? I think moral judgment is difficult. Profits will be in Germany already heavily taxed. And if cartel agreements are the reason for price increases, then the cartel office is called upon.

Economics Minister Habeck wants to change antitrust law. The plans envisage skimming off profits and, if necessary, breaking up corporations – on the mere appearance and without any evidence of market abuse …

sootyworm: My understanding of the law is: If someone accuses me of illegal behavior, then they have to prove it. The breaking up of companies is the sharpest means of what the constitutional state is available. Setting the threshold for the use of this instrument even lower in order to be able to react to the mere appearance of abuse – that would hit the foundations of our legal system.

If these plans are implemented – will you sue?

sootyworm: That’s very hypothetical. Questions about unbundling are complicated and there are no simple ones solutions. Such questions almost always end up before the courts, with arguments lasting for years. In the end, there are often horrendous amounts of compensation that the taxpayer has to pay. Nobody can want that, and it doesn’t help anyone in the current situation.

Ukraine crisis – all the news about the conflict

Does the industry expect new relief from politicians?

sootyworm: We need a globally competitive one electricity price. The abolition of the green electricity surcharge is not enough. Electricity tax and grid fees must also be reduced significantly. At the Industry Day a year ago, Olaf Scholz described an industrial electricity price of four cents per kilowatt hour as sensible. Companies are still paying up to 18 cents – and the trend is rising. We have not forgotten the Chancellor’s statement.

The traffic light wants to relieve low earners. What do you think of Minister of Labor Heil’s initiative to introduce social climate money?

sootyworm: It would make more sense than a climate money, the electricity price for those private households to reduce, which come to their economic limit. The many levies that weigh on the price of electricity give the state the opportunity to do this. But the state cannot compensate for all cost increases for everyone. Energy is no longer getting cheaper – at least for the foreseeable future. For all support that is intended to be permanent, the state must consider financing. Nobody has yet discovered the treasure chest with any amount of money.

To counter inflation, economists have raised the issue of extending working hours. How do you feel about a 42-hour week?

sootyworm: When the baby boomers retire, this country will lose massive amounts of manpower, and we already have a shortage of workers in many places. I personally have great sympathy for an optional increase in the weekly working time – of course with full wage compensation.

Do you have similar sympathy for retirement at 70?

sootyworm: One 42-hour week would certainly be easier to implement than a general introduction of pensions at 70.


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