Germany introduces energy-saving provisions as key relief runs out and higher prices loom

Germany and Europe are grappling with the fallout from Russia’s war on Ukraine on energy supplies and costs. Oil, gas and coal prices have risen sharply in recent months as many countries have begun phasing out Russian supplies and instead seek alternatives in world markets. The rush for alternative gas supplies and fears of further cuts in deliveries from Russia have both driven prices up significantly, which is expected to cause severe financial hardship for households and businesses in the months ahead.

German Economy and Climate Minister Robert Habeck said finding alternative sources could only be part of the answer to how to overcome addiction. “Saving much more gas will also be a substantial part of the solution: in public institutions, in companies and in as many private households as possible,” the minister stressed. Saving gas would also mean saving money, a measure that could become increasingly important for many consumers once the support mechanisms expire at the end of August.

“Legal Obligations and Voluntary Efforts”

At the end of August, Habeck’s ministry (BMWK) published a series of energy-saving measures on which the government had agreed. The measures, which for the most part had already been the subject of public debate over the past few weeks, will apply to all sections of society – from public institutions to large and small businesses and individual households, with additional help from unions, qualified drafters and trades, industry associations and civil society groups. “A nationwide effort is needed” to ensure that the severe effects of the energy supply crisis are averted and reliance on Russian imports ends, the ministry said. “Legal obligations and voluntary efforts will complement each other,” he added. The regulation is primarily aimed at reducing gas consumption for heating and electricity generation, and serves to support the greater ‘workplan’ for energy efficiency which includes financial incentives, targeted support and regulatory changes.

Households consumed about a third of German gas in 2021, mainly for heating and hot water, and 40% of all households in the country depend on gas for heating. Since the start of the energy crisis, the government has urged citizens and small businesses, including restaurants and retail stores, to reduce their consumption where possible, in particular to reduce their exposure to the expected explosion of price. In June, he launched a campaign called “80 million together for energy change”, in which people were encouraged to help reduce Russia’s grip on the energy sector. The campaign included advertisements in public spaces, online portals and social media, as well as a hotline, events and stakeholder dialogues.

Along effort list which had gradually emerged over the past few months finally received the green light from the government at the end of August. Divided into short-term and long-term responses, some of the measures take effect September 1 and will last at least six months, while others, for which the approval of the German Council of States (the Bundesrat) is still pending, comes into force in October and are planned to remain in place until 2024, thus covering the next two heating seasons. “The focus will be on measures implemented by the state in order to act as a model and provide guidance regarding actionable and achievable measures,” the ministry said. Long-term measures would aim not only to avoid short-term bottlenecks, but also to improve energy efficiency in the years to come.

Short term measures:

  • Right for tenants to deviate from the contractually agreed minimum heating temperatures in rental buildings and lower temperatures at the discretion of tenants
  • Reduction of legal minimum ambient temperatures in offices and public buildings 20 to 19 degrees Celsius, with exceptions for schools, hospitals and other institutions.
  • Prohibition of heating large interior spaces of non-residential public buildingssuch as foyers, halls and technical installations, except where this undermines safety and health standards
  • Prohibition of certain types of heating for private swimming poolswhich means that no gas or mains electric heating is allowed, except for therapeutic applications
  • Shutdown of drinking water heating systems in non-residential public buildingsespecially instantaneous water heaters and decentralized hot water tanks should be switched off as long as this does not affect hygiene standards
  • Reduction of exterior lighting of monuments and public buildingsexcept where this would affect safety standards and for certain events
  • Mandatory information for private energy saving measuresunder which energy suppliers and owners, especially of large residential buildings, are obliged to inform customers of planned cost increases and possible ways of reducing consumption
  • Compulsory closing of entrance doors in heated stores to prevent loss of heating energy, unless doors are required to be left open for operations or are required as an emergency exit
  • Ban on illuminated advertisements from 10:00 p.m. to 4:00 p.m. the following day, unless lighting is necessary for traffic safety reasons and cannot be easily replaced, such as illuminated advertisements at bus stops or in underpasses of railway tracks

Long-term measures:

  • Mandatory maintenance and optimization of the heating systemthat owners of gas-heated buildings must carry out the respective inspections within the next two years
  • Obligation to carry out hydraulic balancing in large buildings, the building owners having to implement the maintenance measure at their own expense. The ministry said this could reduce gas consumption per square meter by around eight euros per kilowatt hour, depending on the specific gas consumption of the building.
  • Obligation for companies to implement efficiency measures if their energy consumption is greater than 10 gigawatt hours (GWh) per year. Possible measures include replacing light bulbs with LED lighting, optimizing workflows and technical instruments, such as in pressurized air systems

A investigation of 16 German state governments, carried out by the news magazine Der Spiegel, revealed that several states have already started working on energy-saving measures that go beyond the federal government’s package. These measures included the obligation to use the buildings of different administrations in common, the reduction of cuts in heating and partial hot water in offices, and the complete closure of public and administrative buildings during holidays. State employees have also been urged to replace business travel with online meetings and use public transportation or shared-drive options whenever possible.

Association of the energy industry BDEW in general welcomed pressure for greater energy saving and efficiency regulation, but criticized that parts of the decree could not be easily implemented by businesses. Providing customers with detailed information on prices and consumption data would prove very difficult for energy companies, and accurate estimates of expected costs almost impossible to make. According to BDEW, tailor-made information for individual customers would take up far more resources than generalized information leaflets and would therefore be a better solution.

NGO Environmental Action Germany (DUH) commented the measures would not address the root causes of the possible energy shortage, namely the energy consumption of the building stock. Stricter minimum efficiency and insulation standards as well as faster modernization would be the only way to reduce consumption sufficiently and sustainably. The recent reduction in modernization support payments would therefore go in the opposite direction to what is needed, the DUH said.