Europe’s energy crisis looming

Photo Credit: Anadolu Agency (AA)

Europe’s energy crisis is looming ahead of winter and countries continue to introduce measures to tackle the crisis.

– France

A French town has decided to distribute winter jackets to schoolchildren as there will be less heating in schools, local media reported.

Gabriel Daube, the mayor of Periers in Normandy, said public buildings will not be heated above 19 degrees Celsius (around 66.2 degrees Fahrenheit) as part of energy-saving measures.

“This is one of the measures that complement a whole series of measures to reduce the energy bill of the municipality,” he told the radio network France Bleu.

The mayor put the cost of jackets at nearly €6,000 ($5,860) for a total of 350 students. But the investment would pay off, Daube continued, as he had set the goal of saving a total of 10% of energy costs, which would correspond to approximately €20,000.

According to the mayor, the heaters at public buildings will be regulated to 19C and public lighting will be completely switched off at 11 p.m. local time.

– UK

The UK’s energy regulator has warned the country may face a “significant risk” of gas shortages this winter.

The shortfall could mean asking big industrial consumers in the UK to stop using gas if an emergency is declared due to the shortage, mainly caused by the impact of the ongoing Russia-Ukraine war.

The warning came in a letter from the energy watchdog Ofgem to The Times of London sent last week.

In a separate warning, earlier on Monday, the International Energy Agency said global natural gas markets are set to remain tight next year, with lower gas flow from Russia to Europe, high gas prices, lower demand, and the impact of energy conservation measures.

As Russia’s curtailing natural gas flow to Europe leads to new highs in international prices, it also disrupts the trade flow, leading to fuel shortages in some emerging and developing economies, the IEA said.

– Belgium

Belgium mulls imposing more taxes on energy companies than the EU’s emergency plan, resulting in over €4.7 billion ($4.6 billion) in extra revenues for the state to handle the economic crisis, local media reported on Monday.

The Belgian federal government revealed a proposal that aims to tax excess profits of companies producing energy at an inframarginal cost which goes far beyond the plan EU countries agreed on Friday.

The new EU rules allow for extending the time and profit limit, Deputy Prime Minister Petra De Sutter told the morning program of the Radio1 broadcaster.

She also explained that the government estimates to collect €4.7 billion over two years to support vulnerable households and businesses.

While the EU energy ministers reached a political agreement on a text that allows to cap revenues at €180/megawatt-hour for electricity generators that benefit from significantly lower production costs than the market price received because of the current crisis, such as nuclear or renewable energy companies, Belgium plans to impose the tax as of 130 euros/MWh.

The proposal of the Federal Energy Ministry would also extend the taxation period to two years instead of the seven-month-long EU plan, setting a retroactive levy on company profits from January 2022 until the end of 2023.

The government calculates to raise €1.2 billion this year, and a further €2.3 billion next year, in addition to the annual €600 million that fossil fuel companies are estimated to pay as a crisis solidarity contribution.

The plan has yet to be adopted by the Belgian Federal Parliament.

– Germany

Germany may not meet its gas-saving targets due to the colder than average temperatures, local media reported on Monday.

The German government’s goal of filling the gas storage facilities to 95% by Nov. 1 is now in jeopardy, the news site Business Insider reported.

According to a Deutsche Bank report published by the news site, German households have to reduce gas consumption by at least 20% to get through the winter without shortages.

But the households have already increased their consumption in September compared to the last year, experts told the news site.

If German households reduce their gas consumption by 15%, the country will likely avoid shortages until early March, according to the experts.

But if the consumption drops by only 10%, gas storage facilities will be empty in February, experts said.


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