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ENERGY

European electricity prices soar as tough winter looms

European electricity prices soared to new records on Friday, presaging a bitter winter as Russia's invasion of Ukraine inflicts economic pain across the continent.

electricity pylons at sunset
Energy prices have soared in Europe as Russia has slashed natural gas supplies to the continent. Photo by Matthew Henry on Unsplash

The year-ahead contract for German electricity reached 995 euros ($995) per megawatt hours while the French equivalent surged past 1,100 euros — a more than tenfold increase in both countries from last year.

In Britain, energy regulator Ofgem said it would increase the electricity and gas price cap almost twofold from October 1 to an average £3,549 ($4,197) per year.

Ofgem blamed the increase on the spike in global wholesale gas prices after the lifting of Covid restrictions and Russian curbs on supplies.

The Czech Republic, which holds the rotating European Union presidency, announced Friday that it would convene an EU energy crisis summit “at the earliest possible date”.

Energy prices have soared in Europe as Russia has slashed natural gas supplies to the continent, with fears of more drastic cuts in the winter amid tensions between Moscow and the West over the war.

One-fifth of European electricity is generated by gas-fired power plants, so drops in supply inevitably lead to higher prices.

European gas prices on Friday reached 341 euros per MWh, near the all-time high of 345 euros it struck in March.

The war is not the only culprit in France.

The shutdown of several nuclear reactors due to corrosion issues has contributed to the French electricity price increase as power production has dramatically decreased in the country.

Only 24 of the 56 reactors operated by energy giant EDF were online on Thursday.

READ ALSO: France extends shutdown of four nuclear reactors amid corrosion problems

France, which traditionally exports electricity, is now an importer.

“Winter is going to be a tough period for all the countries in Europe,” Giovanni Sgaravatti, research assistant at the Bruegl think tank in Brussels, told AFP.

“Prices will stay high, possibly they can even go higher,” he said.

READ ALSO: Air-con, ties and lights: How Europe plans to save energy and get through winter without blackouts

Recession ‘probably unavoidable’

A Bruegel study found that European Union countries have allocated 236 billion euros from September 2021 to August 2022 to shield households and firms from rising energy prices, which began to increase as countries emerged from Covid restrictions and soared after the war.

In recent days and weeks, countries have announced energy-saving campaigns to encourage the public to reduce power consumption during the winter.

Germany announced Wednesday that the temperature of public administrative offices this winter would be capped at 19 degrees Celsius (66 degrees Fahrenheit) while hot water would be shut off.

The German measures also include a ban on heating private swimming pools from September and over the six months that the decree is in place.

Finland is encouraging its citizens to lower their thermostats, take shorter showers and spend less time in saunas, a national tradition.

French households are shielded by an energy price cap until December 31 for now.

Industries are also affected by the soaring energy prices.

Factories that produce ammonia — an ingredient to make fertiliser — announced the suspension of their operations in Poland, Italy, Hungary and Norway this week.

HSBC bank warned in a note that “recession is probably unavoidable” in the eurozone, with the economy shrinking in the fourth quarter and the first three months of 2023.

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ENERGY

How Austria plans to secure the food supply in the event of a blackout

The energy crisis and war in Ukraine have raised fears of blackouts in Austria this winter. While the risk is low, there are now plans in place to distribute food if the worst happens.

How Austria plans to secure the food supply in the event of a blackout

Grocery retailers in Austria have agreed on an emergency plan to secure the food supply to the nation in the event of blackout.

The agreement followed a meeting with Energy Minister Leonore Gewessler (Greens) and Agriculture Minister Norbert Totschnig (ÖVP) on Tuesday (November 29), reports ORF.

FOR MEMBERS: Energy crisis: What to do in case of a power outage in Austria

A statement released following the meeting said: “As a system-critical infrastructure, the domestic food retail trade has a social responsibility to be prepared for emergencies and to be able to ensure the basic supply of the population even in the event of a blackout.”

What is the emergency plan for Austria’s food supply?

If Austria is hit by a widespread blackout, all grocery stores will close to protect the supplies.

On the second day, supermarkets will open from 10am to 3pm, but staff will hand out bags of fresh food at the front of the shops and customers will not be allowed to enter.

This will take place at Spar, Interspar, Maximarkt, Billa, Penny, ADEG, Sutterlüty, Hofer, Lidl, Nah- und Frisch, Unimarkt and M-Preis stores.

The bags will contain ready-made food, water, non-perishable bread and canned goods. Convenience products and candles will be sold for cash. Baby items and hygiene products will be available on request.

If a blackout extends to a third day, only dry food will be distributed.

Additionally, all Austrian households are advised to have a supply of food to last for 14 days, as well as around €100 in cash per family member.

READ MORE: Who to call and what to say in an emergency in Austria

How secure is Austria’s energy supply?

Austria is a country with a stable electricity supply – with most of the power coming from hydroelectric or wind power farms.

In 2020, hydropower accounted for 55 to 67 percent of the electricity generated in the Alpine country. The leading electricity companies operate around 130 hydropower plants, especially taking advantage of its mountainous location.

According to the country’s Climate and Energy Ministry, wind power accounted for 10 percent, while solar 4 percent. In total, around 80 percent of Austria’s electricity comes from renewables.

Vienna has one of the most secure supplies worldwide, according to the independent regulatory authority E-Control. Moreover, the current figures on the subject of security of supply show that the Viennese were only affected by a power failure for just under 18 minutes a year – an improvement from 2021.

The capital is also equipped with “black start-capable power plants”, which can start up independently without outside help – thus ensuring supply even if a prolonged widespread power blackout should occur in Europe.

The situation in the rest of the country is similar. But Viennese authorities have asked the federal government to enter into talks with the federal states to develop a national emergency plan. 

Emergency preparation guidelines for the general population include keeping a flashlight with working batteries in case of a power grid malfunction, keeping a battery-powered radio in your home and even having non-perishable food and potable water in the household.

READ ALSO: Reader question: What are the chances of blackouts in Austria this winter?

Austria’s energy emergency system

Since March, shortly after Russia invaded Ukraine, Austria has been at level 1 (the early warning level) of the alert system related to energy consumption.

However, due to the aggravated situation surrounding gas deliveries, the increasing number of cases of suspected sabotage of gas pipelines to Europe and the current developments relating to the Ukraine war, an alert level (level 2) could be expected for Austria.

Level 2 is declared if the gas situation deteriorates. At this stage, businesses are encouraged to use alternatives to natural gas whenever possible. 

Level 3 – the emergency level – is activated when gas can no longer be supplied and the current demand can no longer be met. Measures for industry, such as substituting natural gas with other energies as energy control measures, are to be put in place. 

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