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· Last week, French President Macron warned in a serious speech that France has reached the end of the "era of plenty" and that hard times are still ahead. in the back.
·The Prime Minister of Belgium said that due to energy shortages, there is no solution in the short term and Europe will experience five difficult winters in the next few years.
·Although Europe is stockpiling natural gas in advance and may be able to survive the coming winter, the continent's suffering is far from over.
Last week, affected by expected factors such as the suspension of production in Norway and the decline in nuclear energy production in France, European natural gas prices hit a new high. Of course, there is also the impact of Gazprom, which plans to shut down Nord Stream-1 for three days starting on Wednesday.
Earlier this week, the benchmark price for Dutch was close to €316 per megawatt hour, equivalent to about $315 per megawatt hour. Plans to maintain natural gas fields in Norway in addition to Nord Stream, as well as planned disruptions to export terminals, have contributed to the recent spike in gas prices.
Citi analysts predicted this week that UK inflation could reach 18.6% in January next year as energy costs continue to rise wildly. Those costs prompted several energy executives to warn this week of the potential for social unrest in the country.
Meanwhile, in his first speech after the government's summer vacation, French President Macron dropped a bomb, saying that France had reached the end of the "era of plenty" and warning that hard times were coming, and that this would Blame it all on climate change and Russian President Vladimir Putin.
" The Guardian " this week quoted Macron as saying: "We are currently at an important turning point, undergoing a huge change... We are living in an era of seemingly abundant... A technology product that seems to be used The era of inexhaustibility...an era of seemingly inexhaustible land and water resources is ending."
Nuclear energy is the main source of energy consumption in France and is also used for export. Since about half of its nuclear reactors have shut down, France can only import electricity from Germany. In addition, Macron also mentioned the drought issue in his speech.
The drought did take an additional toll in Europe, affecting hydropower production in large producers such as France and Norway, thus driving up fossil fuel prices while utilities were forced to rely on fossil fuels when hydropower production fell.
In Germany, drought affects oil and coal supplies to utility companies. The water level in the Rhine is too low, and many ships are unable to reach storage points and power plants, where coal and oil are needed to survive the autumn and winter seasons.
Reuters quoted a document from the German Economy Ministry as saying: "Due to a significant reduction in domestic shipping, accumulated coal storage is likely to decline rapidly." The company warned: "Other storage sites in southern Germany, coupled with the construction of Storage locations may not be able to sustain people through the winter.”
At the same time, when Prime Minister Scholz returned from Canada, he did not commit to increasing the supply of liquefied natural gas. Ottawa expressed its preference to cooperate with Germany on hydrogen . Hydrogen is known as a clean alternative to natural gas and will dominate the market after transformation.
To be fair, even if Canada commits to supplying LNG to Germany, it cannot ensure supply this winter in the short term. However, it would have eased fears about the future, as the Belgian prime minister warned that Europe faced not one, but five to ten difficult winters.
Thomas Kosteger, a senior analyst at Pictet Wealth Management, told Reuters this week: "Energy, energy, energy, that's the key. We have an energy crisis and, frankly, electricity prices have risen to where they were before the pandemic. 10 times, which has hit the power system.”
Natural gas prices have surged nearly 30% since the beginning of the year, with increases as high as 40% in August alone.Of course, this has pushed up electricity prices, with daily averages across the country breaking records, increasing pressure on governments to find ways to ease the crisis.
However, expectations were not high. Rising energy prices are exacerbating inflation , making inflation look increasingly uncontrollable. The word recession is used frequently when talking about where European energy is headed.
So far, the only good news is that Europe has already stored natural gas in advance. If Gazprom decides to shut down Nord Stream-1, Europe can still ensure some natural gas supply. However, in the view of analysts, this cannot avoid the crisis, but can only alleviate urgent needs.
Morgan Stanley issued a final warning, saying "if Nord Stream-1 stops supplying gas, stocks should be manageable this winter," but Market Watch added in a cited report , "If natural gas supply is not restored, accumulated losses next year will lead to unusually tight supply in the winter of 2023/24."
It seems that in much of Europe, the era of affluence that people have enjoyed for generations is ending.
Macron said in his speech that this fall he would prioritize the energy transition over finding ways to make energy prices more controllable to benefit millions of French people struggling to pay their bills. If the bills continue to pile up, the UK may not be the only country facing civil unrest.
Translator: Sun Jiatong
Reviewer: Li Jia
Editor: Fan Chunxiao
