There will be no further price increases at Gasag in the coming months. “Nothing will happen until the end of the year,” said Sales Director Matthias Trunk on Wednesday at the presentation of the annual balance sheet.
Anything else would be difficult to convey, because the average increases of 16 percent on January 1 and a further 26 percent on May 1 are the largest in Gasag’s 175-year history. The pandemic and the war are the main causes of this.
As early as the second quarter of 2021, the market had picked up with price jumps of up to 100 percent, “in the fourth quarter things really took off,” Gasag boss Georg Friedrichs looked back. A few months later, the Russians invaded Ukraine, and gas is about four times more expensive today than it was a year ago. “For the year 2023, too, we see prices that are three to five times what we previously knew,” said Friedrichs.
Gasag will probably decide at the end of October whether Berliners will have to pay more for gas in 2023 than this year. The company has 512,000 gas customers and also supplies 300,000 households with green electricity, most of which is generated in Brandenburg.
Gasag itself does not import any gas, but buys the fuel from around 20 wholesale partners. According to Friedrichs, the utility is preparing for a “gas shortage” in the event that there is no more natural gas from Russia.
“The apartments would probably not get cold,” said Friedrichs, since private households as well as hospitals, schools and authorities are among the protected customers. Almost half of the heat required in Berlin is based on the gas network. Non-protected customers include trade and industry, which would not be supplied in an emergency and would have to stop operations. There is currently no reason to doubt the security of supply, said the Gasag boss, who switched from Vattenfall to Gasag a good year ago.
The Gasag owners Eon, Vattenfall and Engie felt that Friedrich’s predecessor Gerhard Holtmeier was too stubborn and dismissed him. The corporations are expecting Friedrich’s help with the planned sale of Gasag to the state of Berlin.
It has been talked about for years, but the Senate currently has other priorities: Vattenfall has put district heating on display and wants to sell ten combined heat and power plants and the approximately 2,000-kilometer pipeline network. Ideally something like the power grid that the Swedish state-owned company sold to Berlin in 2021 for 2.1 billion euros.
As part of the remunicipalisation strategy, the Senate wants to buy back all major networks that were privatized in the 1990s. This has been achieved with water and electricity and advertised for heat. The handling of the gas or the gas network remains controversial, which the Greens believe is not suitable for a climate-neutral energy supply.
According to Gasag boss Friedrichs, 75 percent of the gas network is suitable for hydrogen. This is not the case with older cast iron pipes and steel pipes with welded seams, and seals have to be replaced here and there.
Regarding the energy transition with different owners of the energy infrastructure, Friedrichs said that Berlin is “like a “puzzle – that doesn’t make it easy to make the city climate-neutral”. The willingness to put the puzzle together is currently greater than two or three years ago. “There are a hell of a lot of balls in the air now. I hope that they fall in such a way that the energy transition progresses,” Friedrichs described the situation.
One of the balls is how the Senate is dealing with the gas network concession, which has to be re-advertised and awarded after a certain period of time. In 2014, the responsible office at the then finance senator Ulrich Nußbaum surprisingly awarded the concession for the operation of the gas network to the state-owned company Berlin Energie.
At the end of a legal dispute spanning many years and all instances, there was a major defeat for politicians: in March 2021, the Federal Court of Justice sentenced the Senate to grant Gasag the concession. The Senate must now decide by next November whether to terminate the concession and initiate a new procedure. If Gasag were taken over by the state, the problem would be solved in one fell swoop.
Despite the upheavals on the gas market, Gasag is profitable. Last year, the adjusted gross profit was 116 million euros and thus just above the previous year. “We delivered a very stable result under sporting conditions,” Friedrichs commented on his own balance sheet. This year, the profit is expected to increase to 132 million euros – also an effect of the rising prices.
“I don’t know if we can achieve that,” said the Gasag boss. If there is no more Russian gas, all cards would be reshuffled. But without gas as a bridging technology, the energy transition will not succeed. “The phase-out of Russian gas is not a phase-out of natural gas,” Friedrichs said.