German RWE Warns of ‘Unimaginable Consequences & Lasting Damage’ From Energy Embargo Against Russia

RWE, Germany’s largest power producer, has warned that halting Russian energy imports as part of a sanctions campaign unleashed against Moscow would result in “unimaginable consequences”.

However he acknowledged on Tuesday the strong dependence on Russia “especially in energy supply, in Europe and in particular in Germany”.

The RWE boss warned that “an immediate stop would have unimaginable consequences for the heating supply of households”, while “a prolonged supply interruption would probably cause lasting damage to the production facilities of industry and small and medium-sized enterprises”.

A wide-scale sanctions campaign has been unleashed against Russia over its ongoing operation in Ukraine, despite Moscow repeatedly stressing that it has no plans to occupy its neighbour and insisting the armed forces only target the country's military infrastructure.

The US and European countries moved to slap new sanctions on Moscow, with President Joe Biden announcing a total ban on Russia’s energy imports on 8 March. The UK followed suit, vowing to phase out imports of Russian oil and oil products by the end of 2022. The European Commission announced an ambitious plan to reduce reliance on Russian gas by two-thirds before Christmas, and abolish Russian fossil fuel, such as coal and oil, by 2030.

Germany, which relies on Russia for more than half its natural gas, moved to mothball the Nord Stream 2 gas pipeline amid the unprecedented pressure to sanction the Kremlin. However, Chancellor Olaf Scholz said his country had been working with EU partners "at full speed" to find alternatives to Russian energy, but this could not be done “overnight."

As Markus Krebber weighed in on the decision by the Chancellor to seek to diversify the country’s supply to slash dependence on Russian oil and gas, he said that RWE could revive as much as 3.5GW of coal-power capacity if needed.

Scholz has also vowed to accelerate construction of liquid natural gas terminals as part of the new shift, announcing a €1.5 billion ($1.6 billion) order for non-Russian liquefied natural gas.

Meanwhile, with Germany’s three nuclear power stations, including the RWE-run Emsland plant, are due to be decommissioned by the end of this year, with Berlin has ruling out extending their lifespan.

As some of Europe’s biggest energy companies, such as Shell and BP, have announced plans to withdraw their business interests from Russia, RWE and its German rival Uniper SE have pledged to continue to receive fuel under existing deals. They did concede that no new long-term contracts with Russia would be signed.