Interview with Professor Aaron Praktiknjo

  Group of people sitting Copyright: © Chair of Energy System Economics Professor Aaron Praktiknjo (centre) and his team from the Chair of Energy System Economics at RWTH.

The city of Aachen has announced further energy-saving measures, including heating public buildings later on in the year than usual and then only at a maximum of 19C room temperature. The aim is to save 20 percent of energy consumption and thus lead by example. We were curious to know what Professor Aaron Praktiknjo from the RWTH Chair of Energy System Economics thinks of these measures.

Aaron, will this plan from the city get us through the winter?

I think the underlying message is good, in principle. We really must all do all we can in the current situation. However, we have to make sure that these local efforts, limited to one major city, actually help in an emergency situation. We shouldn’t save gas quotas for them to then be made available to other consumers via the free market.

What could the consequences be?

If we consume less gas locally, more is available for the energy markets overall. One consequence could even be slightly lower gas prices – in view of gas shortages, this would send out the completely wrong message and could lead to higher consumption rates again. Put simply: The gas we save could be additionally "blown" somewhere else. I would, therefore, call for collective action in Germany, or, even better, across Europe, which would see all gas saved from quotas put into gas storage facilities. The German government or even the European Commission should create an intelligent framework for this.

Many are buying electric heaters for winter. Is this a solution?

No, unfortunately not. However, in the current situation, you have to weigh up a lot of different factors. If buildings are not heated properly or gas becomes very expensive compared to other forms of energy, people will find other options – including electric devices. I must confess that several years ago, I myself worked at another institution with a fan heater under my desk. The heating there was set so that the offices did not get warmer than 15C on cold winter days. However, in the current situation, if everyone revs up their electricity consumption in the winter, it puts strain on the electricity supply. We would then have to generate and transport more electricity. We would need free power plant capacity and power lines or otherwise have to ration electricity for this. If free power plant capacity is available on cold days this winter, it will probably be in gas-fired power plants. So we’d be in a catch-22 situation.

Will we have blackouts?

There will be shortages, and I don't think we can totally rule out local power outages. However, I don't think total blackouts, as many pessimists are predicting, are likely at the moment. Ultimately, however, I believe it is absolutely necessary for energy-saving measures to complement each other and not lead to problems at other points in the energy supply chain. To this end, scarcity situations should be reflected in appropriate price signals that are also felt by energy consumers. However, this should not result in any social hardship. Whatever happens, the German government and the network operators will have their work cut out for them.