Europe’s biggest Russian gas buyers shift back to coal as Moscow turns down gas flows

Europe’s biggest Russian gas buyers race to find alternative fuel supplies and could burn more coal to cope with reduced gas flows from Russia that threaten an energy crisis in winter if stores are not refilled.

Germany, Italy, Austria and the Netherlands have all signaled that coal-fired power plants could help see the continent through a crisis that has sent gas prices surging and added to the challenge facing policymakers battling inflation.

Italy’s Eni said it was told by Russia’s Gazprom that it would receive only part of its request for gas supplies on Monday, pushing the country closer to declaring a state of alert that will trigger gas saving measures.

Germany, which has also experienced lower Russian flows, announced on Sunday its latest plan to boost gas storage levels and said it could restart coal-fired power plants that it had aimed to phase out.

“That is painful, but it is a sheer necessity in this situation to reduce gas consumption,” said Economy Minister Robert Habeck, a member of the Green party that has pushed for a faster exit from coal, which produces more greenhouse gases.

“But if we don’t do it, then we run the risk that the storage facilities will not be full enough at the end of the year towards the winter season. And then we are blackmailable on a political level,” he said.

Russia on Monday repeated its earlier criticism that Europe had only itself to blame after the West imposed sanctions in response to Moscow’s military operation in Ukraine, a gas transit route to Europe as well as a major wheat exporter.

The Dutch front-month gas contract, the European benchmark, was trading around 124 euros ($130) per megawatt hour (MWh) on Monday, down from this year’s peak of 335 euros but still up more than 300% on its level a year ago, before prices started rocketing.

The chief executive of Germany’s largest power producer RWE,  Markus Krebber, said power prices could take three to five years to fall back to lower levels.

Russian gas flows to Germany through the Nord Stream 1 pipeline, the main route supplying Europe’s biggest economy, were still running at about 40% of capacity on Monday, even though they had edged up from the start of last week.

Ukraine said its pipelines could help fill any gap in supply via Nord Stream 1. Moscow has previously said it could not pump more through the pipelines that Ukraine has not already shut