Energy prices in Europe are rising due to inflation and the impact of Russia’s invasion of Ukraine. There are numerous warning signs that Europe could face a crippling energy crisis this winter.
Inflation has increased
Inflation is rising in Europe. Annual inflation rose in July 9.8% among the 28 member states of the European Union – compared to 2.5% in the previous year.
Russia controls Europe’s natural gas supply
Gazprom – the Russian state energy giant – has shut down an important natural gas pipeline to Europe. Last week, Gazprom shut down the Nord Stream 1 pipeline for urgent maintenance work.
There are concerns that Russia could hold Europe hostage with the pipeline over the winter.
Before the Russian invasion of Ukraine, Russia provided more than a third of Germany’s gas supply.
Europe is already burdened with record high energy prices
In August, Spain experienced its most expensive Month for current since records.
France 24 reported: “The year-ahead contract for German electricity reached 995 euros ($995) per megawatt-hour, while the French equivalent surged above 1,100 euros – a more than 10-fold increase in both countries over last year. In the UK, energy regulator Ofgem said it would increase electricity and gas price caps by almost 2-fold from October 1, to an average of £3,549 ($4,197) a year.”
Daniele Franco – Italy’s Economy and Finance Minister – warned that the country’s net energy import costs will more than double to nearly 100 billion euros ($99.5 billion) this year. Franco said the nation was helpless on the matter: “Basting rising energy prices, at least in part, through public finances is very costly and we could never do enough.”
Germany faces a coal shortage
The lack of oil and gas has forced European nations to do so increase their dependence on coal.
In Germany, the water levels of the Rhine have reached crisis levels amid summer heatwaves. The Rhine – one of the most important waterways in Europe – has already closed because of low water.
“Due to the sharp reduction in inland shipping, the accumulated coal stocks could fall quickly,” says a document from the Federal Ministry for Economic Affairs and Climate Protection Reuters.
Other major waterways have also prevented large ships from bringing coal to European countries. That coal is now stuck in ports. Around 8 million tons of coal were stranded in ports at the end of July, Politically reported. If the problems in the supply chain continue, this will have a bad impact on Germany, Poland and Switzerland in the winter.
Scandinavian governments bail out energy companies
Finland and Sweden announced plans to offer energy companies billions of dollars to protect them from “technical bankruptcy”.
“The rapid increase in power prices has caused paper losses in power futures contracts by energy companies, forcing them to find funds to post additional collateral with the exchanges,” it said Reuters.
Finland will provide US$9.95 billion and Sweden US$23.2 billion to energy companies.
Companies face bankruptcy due to energy costs
MakeUK – the lobbying group for British factories – said almost half of all manufacturers in the country saw electricity bills skyrocket by more than 100% in the past year.
Bloomberg reported: “Rising energy bills threaten to put six in 10 UK manufacturers out of business, according to a survey that reveals the depth of the crisis facing the next Prime Minister.”
Sky-high energy prices severely limit production
“Nordic Greens, one of the largest tomato growers in both Denmark and Sweden, has announced that it will not grow tomatoes in its Sweden-based grow facility over the winter due to skyrocketing electricity prices,” it said HortiDaily – a global greenhouse news website.
An estimated 500 tons of tomatoes will be lost as a result of the shutdown.
Several European aluminum smelters have cut production drastically or temporarily shut down due to rising energy prices.
“Industry insiders say the escalating energy crisis now threatens to wipe out much of the region’s aluminum production,” Bloomberg reported.
Restrictions on electricity, heat and water
Since July, some of Germany’s largest cities have imposed restrictions on hot water, heating and lighting.
US Army prepares for power shortages at a military base in Germany
Last month the US Army notified Troops that there would likely be power restrictions at the US Army Garrison in Ansbach, Germany.
“The USAG Ansbach installations rely solely on local German supply partners for electricity, heating and water,” the army memo said. “Despite all the solar panels and windmills in Germany, a large percentage of the energy used for heating within the EU is imported… much of it from Russia.”
DPW Energy Manager Brad Jennings said: “There is a potential that we may see large cuts in available power and heating.”
The US Army advised soldiers to put on extra clothing, minimize long hot showers by lowering the temperature, and use cold rather than hot water.
Civil unrest is increasing around the world
Verisk Maplecroft – a risk consulting firm – released his latest civil unrest index last week. The latest report found that 101 out of 198 countries recorded an increased risk of civil unrest, while only 42 decreased it.
“The data, which spans seven years, shows that in the most recent quarter, more countries experienced an increase in civil unrest risks than at any time since the index was published,” the report said.
The analysts noted that “rising food and energy prices will make it harder for governments to deal with popular discontent.”
“A cold autumn and winter in Europe would exacerbate an already serious energy and livelihood crisis,” the report said.
Italian on Friday burned their energy bills in front of the city hall in Naples.
On Saturday, an estimated 70,000 protesters demonstrated in Prague “against rising energy bills and demanding an end to sanctions against Russia over the war in Ukraine,” it said the guard.
https://www.theblaze.com/news/europe-energy-crisis-winter-prices Warning signs Europe could face an energy crisis this winter