Bavaria’s economic motor to boost natural gas

Mario Mehren, Chairman of the Board of Executive Directors of Wintershall, recently underlined the vital importance of a secure natural gas supply for Bavaria’s economy at the German Energy Congress in Munich. ‘In 2022, if not before, Bavaria will face difficulties with its electricity supply,’ he stated. ‘At this time, when the last German nuclear power plants in Bavaria are taken off the grid, there will be an electricity generation shortfall of up to 4 GW. Renewable energies cannot replace that – at least not at affordable and responsible prices.’ Mehren went on to say that gas-fired power plants, which could stabilise the electricity grid, were not so far being deployed sufficiently.

Bavaria sources around 48% of its electricity from nuclear energy, according to Energy Atlas Bavaria. The country will shut down its three nuclear power plants still in operation by the end of 2022, and will then have to import a large share of its electricity requirements. According to plans outlined by Germany’s Federal Economics Ministry, electricity from renewables – primarily from the major wind farms in the north of Germany – will then secure the energy supply in the south. However, the construction of additional electricity lines across several German states is progressing much more slowly than the federal government planned. The new ‘electricity highways’, which are mostly overhead electricity lines, are a contentious issue with the German public. ‘Furthermore, covering the energy requirements with renewables alone would be too expensive and too unreliable,’ Mehren said.

One possible solution would be to scale-up the use of gas-fired power plants in Bavaria, which allow flexible and climate-friendlier electricity generation, especially when there isn’t much sun or wind. But so far there is no clear policy in place that gives gas-fired power plants a longer-term economic perspective for their contribution to supply security. ‘We would be well-advised to find long-term solutions. In a few years, when nuclear power disappears from the market, we will need guaranteed capacities for generating electricity,’ Mehren explained. The Bavarian state government already forecasts that the share of natural gas in the state’s electricity supply will rise from 8.9% (2014) to 23% by 2025.

Natural gas today already plays a very important role in Bavaria’s business interests as well as for the state’s future electricity generation. ‘Bavaria’s economic motor runs on natural gas,’ Mehren said at the Munich Energy Conference. A third of energy consumption in the manufacturing sector in Bavaria is currently covered by natural gas, and this trend looks set to rise. Around 20% of primary energy consumption in Bavaria comes from natural gas. And in the household sector, the Bavarians are also placing their trust in this energy resource, with almost every second new building under construction in the country using natural gas.

The supply of natural gas in Bavaria is relatively secure – the state has good natural gas infrastructure, which is constantly being developed. In contrast to the controversial construction of electricity lines from the north, additional natural gas pipelines to south Germany have already been laid. In 2011, BASF subsidiary Wintershall and Russia’s Gazprom together invested over a billion euros in the construction of the 470-km long OPAL natural gas pipeline from Greifswald on the Baltic Sea coast to the Czech border. This allows natural gas to be transported directly from Russia to south Germany via the Czech Gazelle pipeline, which was commissioned in 2013.

However, the EU Commission so far hasn’t approved the planned use of the full OPAL capacity of 36bn cm, which means only half of the pipeline’s potential is being used at the moment. ‘Brussels shouldn’t block the planned full capacity utilisation of the German pipeline any longer,’ the Wintershall CEO urged the Commission. In Munich Mehren said he hoped approval would be granted before winter.

The link to the Nord Stream Baltic Sea pipeline via OPAL also enhanced supply security in Bavaria and Baden-Württemberg considerably. So far south Germany has received Russian natural gas from the Czech Republic and Austria, via Ukraine. ‘The EU must, of course, respond to developments in Ukraine. But good economic sense must not be overshadowed by foreign policy considerations. A sense of proportion is vital, otherwise we will squander the very valuable asset of supply security in Germany,’ concluded Mehren.

Photo source: Wintershall