Prepare for the worst. German power plants discuss about power restrictions plans with BASF and other large enterprises.

Nov 27, 2022

Electricity suppliers are reaching out to large manufacturers such as BASF to assess how much they can reduce electricity demand in the context of tight power supplies. Some manufacturers have agreed to accept power outages for several hours a day when winter sets in, though people familiar with the matter said BASF has yet to reach an agreement with the grid.


Compared with Blackout, this kind of active power reduction is called Brownout. Since the industries can prepare in advance, the impact will be slightly smaller.


For this report, Germany's two large grid operators, Amprion and Tennet TSO, both confirmed it. A spokesman for BASF declined to comment.


Sebastian Bolay, an energy expert at the German Chamber of Industry and Commerce, said that bilateral coordination is currently underway, and we believe that the risk of power supply restrictions this winter is real.


However, what the industry said is somewhat different from the German government, which has recently become more confident. In the context of Germany's official announcement this week that natural gas storage has reached 100%, a spokesman for the German Ministry of Economy said that there is currently no indication that power supply security and system stability are threatened.


Compared with the French authorities who have repeatedly warned that there may be prolonged power outages this winter, Germany's statement is obviously much more optimistic, but risks still exist. Currently about 15% of Germany's electricity supply comes from natural gas. In the event of a cold snap, the supply will prioritize household heating, so there may still be a gap in industrial electricity consumption.


As the largest electricity demand country in the European Union, the electricity consumption situation in different regions of Germany is also different. Eric Landeck, CEO of Berlin Power Grid, once said that the capital in northeastern Germany has made full preparations, including pre-prepared arrangements for power cuts.


But in the Southeast, where most industries is concentrated, there is still a lack of alternative means of access to gas and electricity, making the region's grid even more vulnerable.