[nradov]

Not just energy but specifically access to natural gas. Even when not burned for power and heat it acts as an essential feedstock for much of the German chemicals industry. With flows from Russia being reduced or eliminated there is no choice but to relocate production.

[gmerc]

And the reason would be that profits were frontloaded and needed reforms were delayed.

Germany had a pretty audacious but absolutely achievable renewables plan 15 years ago but Schroeder & Merkel canned it for cheap Russian Gas and now that the price for that has become apparent there wailing and screaming. It’s just normalizing - if the original plan had been pursued, profits would not have been that great but the cost of adapting would have been staggered too.

Now the bill is due.

[nradov]

You're missing the point. Renewable power generation is nice but it doesn't help with chemical manufacturing.

[gmerc]

Not missing the point at all. it’s two different issues and the same root cause.

Availability of sufficient power reserves not bound to Russia would alleviate many industrial cost issues right now. Costs are up primarily because cheap power is gone.

The chemical industry requiring gas is a separate problem with a similar root cause - supply monoculture. Germany built its first LNG terminal last year, before that it was Russian gas because it was cheap and it was betting on Northstream.

Lack of supply diversity, failure to plan, ideological blinders and good old corruption.

The article is missing the point by failing root cause analysis.

[nradov]

LNG imports won't make chemical manufacturing viable again in Germany. Too expensive. Those industries will relocate closer to the sources where they can connect directly to pipelines.

[FirmwareBurner]

Indeed. People miss the point that metal smelting and chemical plants are built around gas and can't switch to electric over night. Basically entire sectors of Germany's economy have made themselves dependent on that sweeet cheap Russian gas.

[MichaelZuo]

Your missing the parent's point, chemical plants can't switch over to 'electric' at all. It's physically impossible. They will still not 'switch over' even a thousand years in the future.

[Archelaos]

The German government is subsidising gas consumption by industry very heavily at the moment to prevent this.

A press release on the relevant legislation can be found here (in German): https://www.bundesregierung.de/breg-de/aktuelles/energieprei...

The most important section in this matter reads in English translation as follows:

"From January 2023, industrial customers will receive 70% of their natural gas consumption in 2021 from their suppliers at a guaranteed 7 cents per kilowatt hour. For heat consumption, the price will be capped at 7.5 cents per kilowatt hour, also for 70% of consumption in 2021. For the remaining consumption, industry will pay the regular market price."

[nradov]

Right but that level of subsidization is unsustainable. What is the end game? Cheap Russian natural gas is unlikely to return soon enough to save the German chemicals industry.

[Archelaos]

Since the beginning of the year, the wholesale gas price in Europe has already returned to the level seen before the Russian-Ukrainian war.

See: https://www.bundesnetzagentur.de/DE/Gasversorgung/aktuelle_g... (in German)