For a Glimpse of the Future, Look at Germany

The energy crunch is getting real and winter is coming

The situation in Germany is getting worse. After shutting down their nuclear energy industry and putting themselves at the mercy of Russia, Germany is now worried about a planned 10-day shutdown of the Nord Stream 1 pipeline for maintenance — and what that would mean if the shutdown continued.

So, as [Deutsche Bank's chief FX strategist George Saravelos] warns, if the gas shutoff is not resolved in coming weeks this would lead to a broadening out of energy disruption with material upfront effects on economic growth, and of course much higher inflation, or as he puts it, "beyond the market's worries about slower global growth in recent months, what is unfolding in Europe in recent days is a fresh big negative supply shock."

What does this disruption mean for normal Germans? For one, it means your landlord might forcefully turn down your heat at night.

Suddenly that smart thermostat doesn’t seem so smart, does it?

And Germans are frantically looking for other ways to save energy as well:

Every kilowatt-hour we save helps to fill the gas storage a bit more,” [Helmut Dedy, head of the German Association of Towns and Cities] said as he appealed to town councils up and down the country to take emergency action. He had a few suggestions: turn off traffic lights at night; shut off hot water in council buildings, museums and sports centres; adjust air conditioners; and stop illuminating historic buildings

The district of Lahn-Dill, near Frankfurt, is switching off the hot water in its 86 schools and 60 gyms from mid-September, a move it hopes will save it €100,000 in energy costs, and Düsseldorf has temporarily closed a massive swimming pool complex, the Münster-Therme. Meanwhile, Berlin has turned down the thermostat on open-air swimming pools, reducing their temperature by 2 degrees. In western Germany, Cologne is dimming its street lighting to 70 per cent of full strength from 11pm.

Residential customers are also taking action, reactivating wood-burning stoves and fireplaces. Sales of firewood, wood pellets and coal, as well as of gas canisters and cartridges, have shot up.

So in an attempt to save the planet, we’ve ended up forcing people back into burning wood in their homes. It’s no wonder German farmers have joined in the ‘green agenda’ protest.

And German leaders better learn from the mistakes of places such as Sri Lanka before they’re on the receiving end of a scene like this: