Interview With Professor Aaron Praktiknjo

  Professor Praktiknjo Copyright: © Martin Braun Professor Aaron Praktiknjo

The German government has declared an alert level under its emergency gas plan. Around a third of the natural gas consumed in the EU is imported from Russia. Gas-fired power plants in the EU also consume roughly this amount of natural gas for electrical energy production. An interdisciplinary team of researchers from RWTH recently conducted a study to determine the extent to which Europe's electricity supply can do without natural gas consumption in the short to medium term. We spoke with Prof. Aaron Praktiknjo from the Chair of Energy System Economics about the results of the study.

To what extent can the European electricity supply do without natural gas consumption in the short to medium term?

Around one-third of natural gas consumed in Europe is for electricity production. About the same amount of natural gas consumed in Europe comes from Russia. In the short to medium term, the power sector can conserve natural gas in two ways. First, by using other power plants to generate electricity. Second, by consumers, at least in part, reducing their electricity usage.

What are the economic costs of this?

When other power plants have to step in, they are usually less efficient power plants. This results in higher costs in generating electricity for consumers and potentially a greater impact on the environment too. But costs are also incurred when electricity is not consumed. Industry, in particular, would have to curb its production. In Europe, this would result in high economic costs and mean job losses in the long term.

What precautions do you think need to be taken? How can the power outage be rationed wisely?

First, other power plants should be used in the short term if possible. However, the natural gas saved there would have to be reserved for filling the storage facilities and not consumed elsewhere. Finally, if there is a power shortage, we need a plan to determine who should be considered a priority for electricity usage and at what times this applies. For industrial electricity consumers, price signals could be an efficient control mechanism.

How does Germany fare in comparison with other European countries and how important is European-level coordination?

Germany has a relatively strong network with its European neighbors in the electricity sector – in contrast to the gas sector. The strong network is extremely beneficial for the stability of Germany’s electricity supply, as nations can help each other out in the event of power plant outages. In such a community, however, it is becoming increasingly important to coordinate energy policy measures, such as power plant shutdowns, well among the members.

According to the study, we would reach a tipping point at a reduction of 30 percent. What happens after this?

If the European electricity sector aims to save 30% of gas consumption, this can be achieved almost exclusively by shifting to other power plants. Reductions in gas consumption above and beyond this would have to be achieved in particular by cutting electricity consumption, which would entail high costs for the national economies.

How is it significant if coal-fired power plants are shut down later?

In the event of a later shutdown, more alternatives would be available for power generation. Gas consumption and thus gas imports could thus be reduced even more without having to turn off consumers’ supply.

Can the environmental impact and costs resulting from negative effects on the environment be set against this?

CO2 emissions also result in economic costs, as they damage the environment. When deciding whether coal-fired power plants should run longer to avoid blackouts, we need to weigh up the economic costs of power cuts against those of higher CO2 emissions.

The RWTH short study is available to read in German here.