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Europe strives to manage energy crisis ahead of winter

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Oct 25, 2022 - 01:55 AM

ANKARA (AA) – Europe’s agenda continues to be dominated by an energy crisis brought about by Russia’s war on Ukraine, with no immediate solutions on the horizon.

France

Strikes at two refineries of French oil company TotalEnergies continued Monday.

The affected sites are in Feyzin (Auvergne-Rhone-Alpes region) and Gonfreville-l’Orcher (Normandy region).

The strikes have led to difficulties in the supply of one or more types of fuel at some service stations. Workers at the Feyzin depot were scheduled to vote Monday on whether to extend the strike.

At the Gonfreville-l’Orcher site, the strike has already been extended until Oct. 27 “unless management contacts us before then,” the CGT union said.

Meanwhile, French Transport Minister Clement Beaune said the situation at many service stations in France is easing.

According to Beaune, only 10% of gas stations continue to face supply difficulties. In the days and weeks before, it was more than 30% in some cases.

Germany

The consequences of the energy crisis for German businesses could be severe, with 25% of the companies in a survey saying they may react to rising energy costs by cutting staff and 90% saying they are likely to respond by raising prices, with some already implementing such decisions.

The findings of the survey by the Foundation for Family Businesses, which was carried out in September by the Munich-based Ifo Institute for Economic Research, were based on a total of 1,060 companies, the majority of them family businesses.

In a previous survey conducted by the foundation in April, only 14% of the companies polled said they were planning layoffs.

According to the latest survey, 13% of the companies now also expect to halt production. In April, the figure was 6%.

Production relocations abroad are currently being tackled by 9% of the companies, up from 6%.

According to the study, the companies are dissatisfied with the crisis management of politics, calling for subsidies for private investment in energy efficiency or renewable energies.

Meanwhile, targeted aid for companies or industries is also frequently mentioned in the survey.

Family businesses are the most widespread type of company in Germany. More than 90% of all companies are family-owned, accounting for 58% of all jobs — a stabilizing factor for the job market in times of economic downturns.

Meanwhile, the leader of Germany’s Social Democrats on Monday warned against resuming Russian gas supplies after the end of the war in Ukraine.

“Even after the war, we will clearly not build up our dependence on Russian energy supplies again. We’re glad that we have now taken the most important steps to get out of there,” Saskia Esken told the RTL/ntv broadcast network.

It was a big mistake to make Germany dependent on one state for its energy supplies, she said, adding: “We shouldn’t think about doing it again.”

Esken’s statements followed calls by the premier of the east German state of Saxony, Michael Kretschmer, who spoke out in favor of resuming Russian gas supplies after the war.

“We need long-term contracts for liquid gas supplies from the US, Qatar and other Arab countries. In addition, we must finally develop our own natural gas in the North Sea. And when the war is over, we should use gas from Russia again,” he told the Bild am Sonntag weekly.

But Green Party parliamentarian Anton Hofreiter called the demand for a return to Russian gas “populist and irresponsible.”

Anyone who demands this must then also say that they “would like to give Russia money so that it can buy more drones from Iran in order to destroy even more in Ukraine,” Hofreiter told Berlin-based Phoenix TV.

Cheap gas from Russian pipelines was a boon to industrial companies in Germany until the start of the Ukraine war on Feb. 24, as they were able to operate at lower costs and gain competitiveness.

Natural gas accounted for about 27% of Germany’s total energy consumption in the first half of 2022, mainly for heating and industrial purposes and to a much lesser extent (around 15%) for electricity production.

Germany managed to quickly lower Russia’s share in its gas supply since the war began, from around 55% in February to around 35% in May.

However, it is still grappling with the major challenge of replacing the remaining share with alternative sources. Other important suppliers include the Netherlands, Belgium and Norway, all of which have raised their export volumes but cannot fully fill the void left by Russia.

Ukraine

Ukraine’s sole power grid operator on Monday placed limits on electricity consumption in several regions, including the capital Kyiv.

“In order to maintain the stable operation of the power system, the Ukrenergo Dispatch Center is forced to introduce a temporary controlled restriction of electricity consumption in the Kharkiv, Poltava and Sumy regions,” the company said on Telegram.

Ukrenergo’s statement added that Kyiv would face the most restrictions as well as Kyivskyi district of Kharkiv and the Chernihiv, Cherkasy and Zhytomyr regions.

“This will help reduce the load on power grids and give energy companies time to repair equipment damaged by terrorist attacks,” it further noted, referring to recent missile and drone strikes by Russian forces amid the war.

The company also urged residents to keep their phones charged and inform those who do not use social media of the measures, which it said could help avoid blackouts.

Ukraine’s energy infrastructure has been the target of Russian airstrikes since the start of the war in February.

The Ukrainian government on Thursday said it would cut energy consumption across the country by 20% due to lower output from damaged energy facilities.

Energy Minister Herman Halushchenko said Ukraine’s energy facilities had incurred damage due to Russian airstrikes on Oct. 10.

Speaking on a public broadcaster, he said many Ukrainians had reduced consumption voluntarily.

President Volodymyr Zelenskyy announced last week that 30% of Ukraine’s power stations had been destroyed since Oct. 10.

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