FRANKFURT, Germany (AP) — As Europe heads into winter in the throes of an energy crisis, offices are getting chillier. Statues and historic buildings are going dark. Bakers who can’t afford to heat their ovens are talking about giving up, while fruit and vegetable growers face letting greenhouses stand idle.
In poorer eastern Europe, people are stocking up on firewood, while in wealthier Germany, the wait for an energy-saving heat pump can take half a year. And businesses don’t know how much more they can cut back.
“We can’t turn off the lights and make our guests sit in the dark,” said Richard Kovacs, business development manager for Hungarian burger chain Zing Burger. The restaurants already run the grills no more than necessary and use motion detectors to turn off lights in storage, with some stores facing a 750% increase in electricity bills since the beginning of the year.
With costs high and energy supplies tight, Europe is rolling out relief programs and plans to shake up electricity and natural gas markets as it prepares for rising energy use this winter. The question is whether it will be enough to avoid government-imposed rationing and rolling blackouts after Russia cut back natural gas needed to heat homes, run factories and generate electricity to a tenth of what it was before invading Ukraine.
Europe’s dependence on Russian energy has turned the war into an energy and economic crisis, with prices rising to record highs in recent months and fluctuating wildly.
In response, governments have worked hard to find new supplies and conserve energy, with gas storage facilities now 86% full ahead of the winter heating season — beating the goal of 80% by November. They have committed to lower gas use by 15%, meaning the Eiffel Tower will plunge into darkness over an hour earlier than normal while shops and buildings shut off lights at night or lower thermostats.
Europe’s ability to get through the winter may ultimately depend on how cold it is and what happens in China. Shutdowns aimed at halting the spread of COVID-19 have idled large parts of China’s economy and meant less competition for scarce energy supplies.
German Chancellor Olaf Scholz said this month that early preparations mean Europe’s biggest economy is “now in a position in which we can go bravely and courageously into this winter, in which our country will withstand this.”
“No one could have said that three, four, five months ago, or at the beginning of this year,” he added.
Even if there is gas this winter, high prices already are pushing people and businesses to use less and forcing some energy-intensive factories like glassmakers to close.
It’s a decision also facing fruit and vegetable growers in the Netherlands who are key to Europe’s winter food supply: shutter greenhouses or take a loss after costs skyrocketed for gas heating and electric light.
Bosch Growers, which grows green peppers and blackberries, has put up extra insulation, idled one greenhouse and experimented with lower temperatures. The cost? Smaller yields, blackberries taking longer to ripen, and potentially operating in the red to maintain customer relationships even at lower volumes.
“We want to stay on the market, not to ruin the reputation that we have developed over the years,” said Wouter van den Bosch, the sixth generation of his family to help run the business. “We are in survival mode.”
Kovacs, grower van den Bosch and bakers like Andreas Schmitt in Frankfurt, Germany, are facing the hard reality that conservation only goes so far.
Schmitt is heating fewer ovens at his 25 Cafe Ernst bakeries, running them longer to spare startup energy, narrowing his pastry selection to ensure ovens run full, and storing less dough to cut refrigeration costs. That might save 5-10% off an energy bill that is set to rise from 300,000 euros per year, to 1.1 million next year.
“It’s not going to shift the world,” he said. The bulk of his costs is “the energy required to get dough to bread, and that is a given quantity of energy.”
Schmitt, head of the local bakers’ guild, said some small bakeries are contemplating giving up. Government help will be key in the short term, he said, while a longer-term solution involves reforming energy markets themselves.
Europe is targeting both, though the spending required may be unsustainable. Nations have allocated 500 billion euros to ease high utility bills since September 2021, according to an analysis from the Bruegel think tank in Brussels, and they are bailing out utilities that can’t afford to buy gas to fulfill their contracts.
Governments have lined up additional gas supply from pipelines running to Norway and Azerbaijan and ramped up their purchase of expensive liquefied natural gas that comes by ship, largely from the U.S.
At the same time, the EU is weighing drastic interventions like taxing energy companies’ windfall profits and revamping electricity markets so natural gas costs play less of a role in determining power prices.
But as countries scramble to replace Russian fossil fuels and even reactivate polluting coal-fired power plants, environmentalists and the EU itself say renewables are the way out long term.
Neighbors in Madrid looking to cut electricity costs and aid the energy transition installed solar panels this month to supply their housing development after years of work.
“I have suddenly reduced my gas consumption by 40%, with very little use of three radiators strategically placed in the house,” neighbor Manuel Ruiz said.
Governments have dismissed Russia as an energy supplier but President Vladimir Putin still has leverage, analysts say. Some Russian gas is still flowing and a hard winter could undermine public support for Ukraine in some countries. There have already been protests in places like Czechia and Belgium.
“The market is very tight and every molecule counts,” said Agata Loskot-Strachota, senior fellow for energy policy at the Center for Eastern Studies in Warsaw. “This is the leverage that Putin still has — that Europe would have to face disappointed or impoverished societies.”
In Bulgaria, the poorest of the EU’s 27 members, surging energy costs are forcing families to cut extra spending ahead of winter to ensure there is enough money to buy food and medicine.
More than a quarter of Bulgaria’s 7 million people can’t afford to heat their home, according to EU statistics office Eurostat, the highest in the 27-nation bloc due to poorly insulated buildings and low incomes. Nearly half of households use firewood in winter as the cheapest and most accessible fuel, but rising demand and galloping inflation have driven prices above last year’s levels.
In the capital, Sofia, where almost half a million households have heating provided by central plants, many sought other options after a 40% price increase was announced.
Grigor Iliev, a 68-year-old retired bookkeeper, and his wife decided to cancel their central heating and buy a combined air conditioner-heating unit for their two-room apartment.
“It’s a costly device, but in the long run, we will recoup our investment,” he said.
Meanwhile, businesses are trying to stay afloat without alienating customers. Klara Aurell, owner of two Prague restaurants, said she’s done all she can to conserve energy.
“We use LED bulbs, we turn the lights off during the day, the heating is only when it gets really cold and we use it only in a limited way,” she said. “We also take measures to save water and use energy-efficient equipment. We can hardly do anything else. The only thing to remain is to increase prices. That’s how it is.”
The gourmet Babushka Artisanal Bakery in an affluent district of Budapest has had to raise prices by 10%. The bakery used less air conditioning despite Hungary’s hottest summer on record and is ensuring the ovens don’t run without bread inside.
While it has enough traffic to stay open for now, further jumps in energy costs could threaten its viability, owner Eszter Roboz said.
“A twofold increase in energy costs still fits into the operation of our business and into our calculations,” she said. “But in the case of a three- to fourfold increase, we will really need to think about whether we can continue this.”
Spike reported from Budapest, Hungary; Janicek from Prague; and Toshkov from Sofia, Bulgaria. Videojournalist Irene Yagüe contributed from Madrid.
David Mchugh, Justin Spike, Karel Janicek And Veselin Toshkov, The Associated Press
Future of Energy is Here – Province of Alberta pitches Alberta and Albertans at 2022 Energy Council conference
Alberta’s Energy Minister Pete Guthrie is making a powerful presentation to state and provincial legislators from across the United States and Canada at the Energy Council’s Global Energy and Environmental Issues Conference in Banff.
It’s a convincing pitch on behalf of energy workers, and Alberta taxpayers who rely so heavily on the province’s most lucrative industry. The presentation is boosted by this video profiling Alberta’s stable, abundant and environmentally responsible energy supply.
Energy Minister Pete Guthrie issued the following statement on Alberta’s energy sector at the 2022 Energy Council conference:
“Energy matters now more than ever. This year, we’ve seen how geopolitical events and volatile energy markets can impact the lives of people throughout the world. It matters where the energy that powers our homes, our economies and our lives comes from.
“The world needs a solution for long-term energy security that is also responsible, reliable and affordable. That solution is Alberta.
“It’s in this spirit that Alberta is proud to host the Energy Council’s Global Energy and Environmental Issues Conference in Banff. We are promoting our energy sector to more than 160 participants – including state and provincial legislators from the United States and Canada.
“During the conference, we will focus discussions on the future of the energy industry, the strength and security of the North American energy system and the role Alberta has to play.
“Alberta is the global leader in responsible energy development that the world needs. We have the innovation, technology and expertise needed to produce responsible energy. We have the highest human rights, labour and environmental standards. We have Canada’s fastest-growing renewable energy sector. On top of all that, we are rapidly developing carbon capture and storage and lowering emissions, with the Pathways Alliance targeting net zero by 2050.
“Our government firmly believes Alberta is the key to energy security for North America and the world. Our track record speaks for itself. Last year, about 62 per cent of the crude oil imported to the United States came from Alberta – that is 10 times more than their oil imports from Saudi Arabia, and over four times more than all of OPEC. Every barrel that comes from Alberta helps replace one produced by countries that do not adhere to our high environmental and social standards. Our province has one of the largest oil reserves in the world, and we are ready to supply nations around the world with our reliable and responsibly produced resources.
“Alberta’s support of research and innovation excellence ensures that innovators can continue to make groundbreaking discoveries, commercialize game-changing emissions-reducing technologies and solve some of the industry’s biggest challenges.
“The future of energy is here. It’s Alberta.”
TC Energy shuts down Keystone pipeline system after leak in Nebraska
CALGARY — TC Energy Corp. says it has shut down its Keystone pipeline after a leak in Nebraska.
The company says it has mobilized people and equipment in response to a confirmed release of oil into a creek, about 32 kilometres south of Steele City, Neb.
TC Energy says an emergency shutdown and response was initiated Wednesday night after a pressure drop in the system was detected.
It says the affected segment of the pipeline has been isolated and booms have been deployed to prevent the leaked oil from moving downstream.
The Keystone pipeline system stretches 4,324 kilometres and helps move Canadian and U.S. crude oil to markets around North America.
TC Energy says the system remains shutdown as its crews respond and work to contain and recover the oil.
This report by The Canadian Press was first published Dec. 8, 2022.
Companies in this story: (TSX:TRP)
The Canadian Press
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