Electricity prices soar, Italian factories close

The war between Russia and Ukraine has made the European energy crisis looming. Many countries that are highly dependent on Russian energy have seen factories being forced to close. For example, in Italy, where about 40% of its electricity comes from Russian natural gas, due to soaring electricity prices, some produce everything from pizza boxes to furniture packaging. Paper mills for the product have been shut down, several steel mills have been forced to close, and even drivers have gone on strike because of soaring oil prices, and fishermen have stopped going to sea.

Italy’s dependence on Russian gas has soared from 27% to 43% over the past decade. There was a time when natural gas consumption fell between 2010 and 2014 due to increased subsidies for wind and solar power, but in recent years the reliance on natural gas has risen again due to the closure of polluting coal-fired power plants.

The Italian government said it would take at least two years to diversify its energy sources from dependence on Russia. Even before the war, Europe was facing a severe energy crunch, driving up the cost of electricity, food, supplies and everything, so the war sanctioned Russia, leading to an energy blackout crisis that affected Europe much more than the United States.

Companies such as Italian paper and packaging manufacturers were able to hold out and continue to operate when the price of natural gas rose during the energy crisis at the end of last year, but the Russian-Ukrainian war made them unbearable. One paper and packaging manufacturer said that at that time, the electricity price per trillion 90 euros per watt hour, now soaring to 300 euros, in order to make money, the price had to be nearly doubled from 680 euros per ton to 1,200 euros, this price is simply not feasible, had to suspend the operation of six factories, affecting Italy One third of packaging needs. Steel mills have also closed, and industry players say it has never had to shut down electric furnaces.

Soaring energy prices have a knock-on effect in Italy. Italian truck drivers cannot afford soaring gasoline prices and have threatened to strike. The fishermen also decided not to go out fishing. Not only Italy was hit, but a stainless steel manufacturer in Spain also stopped production and furloughed all 1,800 employees. The steelmaker’s net profit soared to a record 572 million euros the previous year as global demand surged.

The head of AEGE, which represents energy-intensive companies in Spain, said that Spain’s energy-intensive industries are suffering from rising electricity supply costs, reaching levels unprecedented in the market, warning activities face serious risks and urging the Spanish government to take emergency measures.

High electricity prices are almost unbearable for producers. Finland has started a nuclear power plant that has been delayed for 12 years. Originally, the nuclear power plant was to be opened in 2009, but because of a technical problem that turned into a legal dispute, the plan was suspended. After the dispute was resolved in 2018, it was put into operation at a critical moment in the Russian-Ukrainian war. This is Finland’s first new nuclear power plant in more than 40 years and the first new nuclear power plant in Europe in nearly 15 years. It is expected to meet 14% of Finland’s electricity. By then, about 90% of Finland’s power generation will come from clean and low-carbon power sources. half.

The Ukrainian conflict has led many Europeans to believe that reducing the entire Europe’s reliance on Russia for fuel imports is also a relief, given the uncertainty and economic consequences. The European Commission has proposed plans to diversify Europe’s fossil fuel supply away from Russia and move more quickly to renewable energy.

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