Germany takes 'bitter' decision to fire up coal power plants as Russia chokes off its vital natural gas supplies

• Germany has taken the "bitter" decision to fire up coal power stations as Russia throttles its natural gas supplies.
• Economy Minister Robert Habeck said it's essential that Germany reduce its gas consumption ahead of the winter.

Germany has taken a "bitter" decision to fire up idle coal power plants to reduce its reliance on Russian natural gas, as Vladimir Putin throttles supplies to the country.

Gazprom, the state-controlled Russian energy company, cut natural gas flows through the Nord Stream pipeline to Germany by around 60% last week.

The German economy ministry said on Sunday that idle coal power plants are already being upgraded so they can soon start generating electricity again. It said emergency laws would allow Germany to boost the generation of electricity from coal for a limited period until March 2024.

"This is bitter, but it's essential in this situation to reduce gas consumption," Robert Habeck, economy minister and a senior member of the Green party, said in a statement.

Germany said it intends to cut the use of natural gas so it can fill its storage tanks ahead of the winter, when demand rises.

"The situation is serious," Habeck, who is also vice chancellor, said. "We are therefore further strengthening precautions and taking additional measures to reduce gas consumption. This means gas consumption must continue to fall, so more gas must be stored, otherwise things will get really tight in winter."

Germany's decision to turn back to coal power, which is highly carbon intensive, underscores how Russia's invasion of Ukraine and the subsequent surge in energy prices is threatening governments' climate policies. The German parliament passed a law in 2020 to phase out the use of coal entirely by 2038.

Russia has said Gazprom's decision to slash natural gas flows to Germany is the result of Canadian sanctions which have meant key pieces of equipment are stuck in Montreal.

But Germany has disputed this argument, pointing out that there are alternative pipelines that could be used.

The move has sent natural gas prices soaring and raised the prospect of shortages of the vital energy source during the winter. Germany imported around half of its natural gas from Russia in 2021.

Dutch TTF natural gas futures, the benchmark European price, were up around 5% Monday to 124 euros (or $130) per megawatt hour. That's a more than 500% increase from a year earlier.

Germany's economy ministry said the reintroduction of coal plants could boost production by 10 gigawatts. This would boost the country's use of coal for electricity generation by up to a third, according to the Financial Times.

The ministry also said it would introduce an auction system to encourage industrial users to save gas, and government-backed loans to encourage the gas market operator to fill storage facilities more quickly.

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