How Europeans react to exorbitant electricity and gas bills

A German retiree facing sky-high energy bills is switching to a wood-burning stove. The owner of a dry cleaning business in Spain has adjusted employee shifts to cut electricity bills and install solar panels. A mayor in France says he has ordered a hiring freeze because soaring electricity bills threaten a financial “catastrophe”.

Europeans have long paid some of the highest energy prices in the world, but no one can remember a winter like this. Lives and livelihoods across the continent are being affected by a range of factors, including supply shortage caused by the pandemic and now political geography stress is causing energy prices to increase 5 times.

The problem could get worse if tensions between Russia and Ukraine further escalate, potentially disrupting gas flow. Russia provides more than a third of Europe’s natural gas, heating homes, generating electricity and powering factories. Even as politicians and leaders in capitals across Europe freeze prices, lower energy taxes and issue checks to households hardest hit by the price hikes, growing concern about what consistently high prices could mean for people’s jobs and their ability to pay their bills.

“People are very upset and very distressed,” said Stefanie Siegert, consumer consultant in the eastern German state of Saxony who is having trouble paying for gas and electricity.

Germany has so far not seen protests against exorbitant energy bills like those that flooded the streets of Spain last year, or an outcry that erupted over inequality. at the level of the so-called Yellow Vest movement. rocking France in 2018. But Ms. Siegert, whose company advised more than 300 clients in January – three times the monthly average – said she wouldn’t be surprised if anger was now directed at her. outlook on vaccine mission Shifting focus to energy prices.

“When you talk to people, you feel their anger,” she said. “It’s very sad.”

Henry Backhaus, 65, is among tens of thousands of Germans abandoned by private energy companies because they cannot afford to buy electricity and gas wholesale at sky-high prices. Under German law, the local utility was then forced to participate, but they sent him a bill for 747 euros (nearly $850) a month – more than he had paid for the whole year. .

“I am a retired person,” he said, looking over the pile of papers spread across the dining table in his dining room. “It’s more than I can afford.”

But Mr Backhaus, who lives in a three-story house in Saxony, has an alternative that could make him the envy of millions of other Germans stuck with high energy bills: He has a large wood stove. in the living room and, in his basement next to his gas stove, a coal or wood stove.

The stove and oven, installed in front of the house connected to a mains gas pipe, allowed him to turn the knob on his radiator to just 18 degrees Celsius, or 64 degrees Fahrenheit, essentially cutting it in half. his gas bill.

“I still have a reserve of coal and a pile of dry wood,” he said, poking another log into the kitchen. “But this is only temporary. It’s not a long-term solution.”

Most people don’t have the option of burning wood or coal, instead piling up clothes. In the UK, the government price limit on energy bill was recently increased by 54 per cent, increasing the annual fee to £1,971. That increase will affect 22 million households starting April, contributing to increased anxiety in the UK about cost of living increases.

Similar concerns can be found across the continent.

Athina Sirogianni, 46, a freelancer in Athens, said she vividly remembers the day about a decade ago when her building switched from oil to natural gas. The move cut her utility bill in half.

Now, her hot water bill is almost tripled last year.

“I kept trying to think of where I could cut back so I could cover the bills,” she said, adding that she hadn’t been to a hair salon in nearly a year, and spent money to buy food for necessary things.

Energy prices are also forcing producers across Europe to shut down or slow down production, even as they look to fill backlogs of orders and resume pre-pandemic business.

The metallurgical industry was particularly hard hit. Nyrstarthe world’s second-largest zinc processor, producing nearly 500 tons of the metal a day at a sprawling plant in Auby, northern France, a complex that consumes as much energy as the French city of Lyon.

When the price of electricity rose from €35 to €50 per kilowatt-hour to €400 last December, it made no sense to keep the plant running, said Xavier Constant, general manager of Nyrstar France. At that rate, he said, “the more we produce, the more we lose money” and so the factory closed last month for three weeks.

Nyrstar temporarily halved output at other plants in Europe in October as the energy crisis began, sending global zinc prices short-lived.

Last fall, fertilizer factory in uk was forced to close because of gas prices. And some German companies that make glass, steel and fertilizers have also reduced output in recent months.

To ease the burden of high prices, the Berlin government has halved the energy surcharge on bills aimed at funding the country’s transition to renewable energy sources and plans to phase it out gradually by the end of the year. end of next year.

But industry leaders say that’s not early enough. Nearly two-thirds of the 28,000 companies surveyed by the Association of German Chambers of Commerce and Industry this month rate energy as one of their biggest business risks. For those in the industrial sector, the figure is as high as 85%.

Small businesses are also scrambling to find ways to cut costs.

Pilar Ballesteros Parra, who co-owns Ronsel, a dry cleaning business in Madrid with 10 employees, says her company’s electricity prices have increased by about 20%. from the previous year. In response, she rearranged her employees’ work schedules, starting shifts earlier and pushing shifts later into the evening so the dry cleaners could run when prices were lowest.

She is also installing solar panels on the company’s building, outside the Spanish capital, so that Ronsel can generate at least 60 percent of her own energy. The government is helping her with a 35% subsidy of a $45,000 investment.

“Our building faces southwest and gets a lot of sun, so that means we’ll be pretty much self-sustaining in the coming months of spring and summer, which will be a great relief,” she said.

Still, she said, the energy crisis and overall price inflation mean she sees little opportunity to ease the burden on her customers.

“Obviously this electricity headache, but now there is also wage inflation and much higher gas bills for our trucks,” she said. “In a few months, it became clear that some of these costs would have to be passed on to our customers if we were to continue.”

A wide range of public institutions are facing strains from higher authority bills. In Poland, hospitals already under financial strain because of the coronavirus pandemic are now questioning whether they will be able to open their doors.

Robert Suroweic, manager of the Provincial Hospital in Gorzow, said: “Managing a hospital in Poland is increasingly like riding a roller coaster. on Twitter. He said the facility’s electricity prices have increased 100 percent.

He and other hospital directors have called on the Warsaw government to intervene, saying the recent cuts in fuel and energy taxes are not enough.

In Germany, tensions are rising among urban-owned companies forced to accept customers, like Mr. Backhaus of Saxony, whose relatively low-cost contracts have been abandoned by private energy companies because of companies cannot pay high energy prices.

City utilities are forced to raise rates for these new customers, often almost astronomically high, to cover the cost of buying more energy in the spot market at record prices. That leads to tension in the community, and can threaten the city’s finances.

“Anyone who wants to be powered will be powered by city utilities,” said Markus Lewe, president of the Association of German Cities and Towns. “But it must not lead to urban utilities and their loyal customers being asked to pay for the problematic business models of other providers and have to answer for flawed financing. their.”

He said he has called on the federal government to step in to protect cities from price volatility.

In France, local leaders are also looking to the federal government to help ease the sting of soaring energy bills.

Boris Ravignon, mayor of Charleville-Mézières, said his city is facing “disaster” after January’s energy bills more than tripled, wiping out the region’s budget surplus for the facility. infrastructure and public services in just one month. The city is trying to cut costs by switching street lights to LED bulbs, which use less electricity, and has proposed a new hydroelectric project.

The mayor has frozen comments on the plan and said the city may have no choice but to raise the cost of public services such as water, transportation, and sports hall fees. such as the city’s public swimming pools and cultural events.

“We really want to protect citizens from these increases,” Mr. Ravignon said. “But when the price hits such crazy heights, it’s just not possible.”

Report by Adele Cordonnier At France, Raphael Minder in spain, Niki Kitsantonis in Greece. How Europeans react to exorbitant electricity and gas bills

Fry Electronics Team

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