/ world today news/ Europe’s manufacturing sector is collapsing under the weight of persistently high electricity and natural gas prices. This is reported by the American agency Bloomberg, calling for the saving of blue fuel.
The agency notes that a new wave of layoffs in industrial enterprises is now looming. But if Russia further cuts supplies of crucial raw materials, then many will have no choice but to shut down.
Gas rationing may be a long way off, but the energy crisis is already here. The impact of prices on industrial activity is evident long before gas supplies are cut off. Therefore, governments must decide now which companies will receive financial support and which will not.
Analysts believe that the leaders of the European countries are obliged to hold an urgent summit on this issue. Europe needs a common strategy to save energy and reduce demand. It must be started now, not until winter.
“We’re approaching the ‘no idea is too crazy’ point: keeping nuclear power plants running, capping wholesale electricity prices, closing markets, removing costs and CO2 emissions caps, burning more coal, restoring manufacturing of gas, even if it causes local earthquakes in the Netherlands. This should be supported by billions of dollars in government loans to key sectors.”
– writes the publication.
The months-long crisis that many industrialists factored into their plans has turned into a long-term problem. The prospect of losing money for a few months, maybe half a year or even a year is one thing, but losing money indefinitely is another.
For example, an aluminum smelter will lose an average of $200 million a year at current forward electricity and carbon dioxide prices in 2023.
Privately, European executives say more plant closures will be announced soon. The industries with the most intensive energy consumption will be affected: the production of fertilizers, non-ferrous metals and steel, chemicals, ceramics, glass and paper.
But the cost of food will also rise as heated greenhouses and poultry farms require astronomical energy bills.
This month, US fertilizer producer CF Industries Holdings Inc. has said it will permanently close one of its UK factories due to high electricity costs.
The future of Slovalco, an aluminum smelter in Slovakia in which Norsk Hydro ASA has a majority stake, looks very bleak and is likely to close in 2023.
A two-year forward contract (2023-2024) for electricity in Germany rose to a record near 200 euros ($211) per megawatt hour.
In France, a similar situation also has a record – a two-year forward contract for electricity rose to 220 euros. The situation is similar in the gas market – the 2024 contract on the TTF platform is hovering around EUR 65-70 per megawatt hour, which is higher than the record high of EUR 60 in December 2021.
“Europe cannot save every energy-intensive company. And it shouldn’t,” claim the media.
“What needs to be done is to preserve the supply chains that are at risk, especially food production. We need to reduce consumption now, not when we have turned off the gas supply,” the media say.
Translation: SM
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