“Energy Matters”

THE European electricity grid is hurtling towards disaster, a new paper from the Global Warming Policy Foundation warns.

Countries are closing reliable nuclear and fossil-fuelled power stations while hoping interconnectors – cables linking different grids – will make up the deficit. But they won’t, according to the paper’s author, Alexander Stahel, a Swiss-based commodities expert.

He explains that the European grid has relied on French and German power surpluses for many years. However, with nuclear power in both countries being wound down and the two likely to soon become net power importers – and with fierce international competition for scarce gas supplies – the whole continent is now left hoping for Scandinavian hydro power and occasional surpluses of UK wind to save it.

Manufacturers are furloughing workers and shutting down lines because they can’t pay the gas and electric charges.

The furnace, heated to 1,500 degrees Celsius, was glowing red. Workers at the Arc International glass factory loaded it with sand that slowly pooled into a molten mass. Nearby on the factory floor, machines transformed the shapeless liquid with a blast of hot air into thousands of delicate wine glasses, destined for sale to restaurants and homes worldwide.

Nicholas Hodler, the chief executive, surveyed the assembly line, shimmering blue with natural gas flames. For years, Arc had been powered by cheap energy that helped turn the company into the world’s largest producer of glass tableware — and a vital employer in this working-class region of northern France.

Europe is facing a growing energy crisis. Individuals and industries are being battered by rising energy costs. On August 31, Russia shut down the Nord Stream 1 gas pipeline to Germany for initially what was supposed to be 72 hours, but followed by an announcement of “technical difficulties” that would prevent a resumption. Russian energy giant Gazprom also announced that natural gas supplies to French energy company Engie SA would be immediately reduced. These actions have created significant uncertainty and the threat of much higher energy prices in Europe as the cold winter season approaches.

In the Netherlands last month, I had the opportunity to discuss the skyrocketing energy costs. Monthly utility bills of 400 to 600 euros are not unusual. One company said it was spending four times the amount for natural gas than a year ago. The company indicated because of these higher costs, it would be cutting its production by 50% this winter. Most European Union countries are experiencing an eight-fold increase in energy prices.