Germany’s largest power producer, RWE, has publicly asserted the nation’s gas supply is secure heading into winter, despite recent severe weather conditions. However, the statement was accompanied by stark warnings about the fragility of the country’s energy infrastructure and a call for continued investment in liquefied natural gas (LNG) terminals.
Speaking to the “Rheinische Post”, RWE CEO Markus Krebber acknowledged that a typical winter poses no significant threat to gas availability, citing stable supply routes. Crucially, however, he emphasized that “the energy system is running on a razor’s edge; this is risky”. This assessment underlines the continued vulnerability of Germany’s energy grid, even after significant diversification efforts following the disruptions caused by the war in Ukraine.
Krebber’s reassurance regarding gas prices are contingent on avoiding extreme weather events or unexpected supply disruptions. He anticipates a softening of prices in the coming years, driven by a projected increase in LNG supplies from various international partners. This projection aligns with market sentiment but raises questions about the long-term economic viability of current LNG import deals and potential over-reliance on specific suppliers.
Looking further ahead, Krebber projected a stabilization of electricity prices for consumers by 2026, with anticipated stable wholesale rates. He tentatively suggested that state subsidies for network fees could marginally reduce costs for some consumers. However, he also cautioned that rising network fees will partially offset production cost reductions.
Despite the glimmer of potential consumer benefit, Krebber directly addressed the ongoing crisis within Germany’s industrial sector. He stressed the urgent need for “structural relief” specifically pertaining to industrial electricity prices, a point of intense political contention. This suggests a growing recognition that competitive energy pricing is critical to preventing further industrial exodus and maintaining Germany’s manufacturing base, even if it necessitates complex and potentially politically unpopular interventions in the energy market. The implicit critique highlights the potential disparity between consumer pricing and the industrial sector’s vital need for affordability.