”Winter is coming” for Europeans. The continent faces high electricity bills, thanks to Russia disrupting Europe’s natural gas supply. Europe is therefore taking steps to reduce energy demand by rationing electricity, cutting the lighting of historical monuments, turning to coal for electricity and also levying taxes on oil companies for pass on their profits to customers.
Why is there an energy crisis in Europe? The past six months have been difficult for the world, especially for Europe, which has had to deal with the war in Ukraine, skyrocketing energy costs due to inflation and waves of extreme heat. You may remember how the UK was literally melting in July 2021 as wildfires ripped through neighborhoods and traffic stations melted due to heatwaves.
But now that ‘winter is coming’, Europe is approaching another nightmarish time. European winters are known to be brutal for humans. But this year, the additional financial costs could make the situation worse.
Europe depends on Russia for 40% of its total natural gas and this need is met by the Nordic gas pipeline linking Russia to Germany. This pipeline helps Europe in all aspects of its life: from cooking at home to turning on power plants. But when Russia shut down its main gas pipeline to Germany to retaliate against European sanctions, it cut off gas supplies, causing natural gas prices to skyrocket by 300%.
This change in supply has also led Europe to buy many fossil fuel resources such as oil and coal on world markets, thereby increasing world coal prices.
It’s not even the worst. The reduction in gas flow to Europe has not only disrupted current operating conditions, but has also affected the fuel storage that Europe normally prepares for before the onset of winter. Since electricity demand is highest during winters, Europe relies on its “pre-winter” gas supply to supply itself with natural gas. But as Russia plays around with its natural gas supply, Europe is acting to save energy. If Russia cuts its gas supply, Europe will enter a recession and thus begin the phase of “deindustrialisation”.
Demonstrations in Europe against rising energy bills:
The government’s inability to do anything about rising energy bills has led people to gather and demonstrate in several European countries. While the roads to Prague’s famous Wenceslas Square could not be seen, protesters burned their electricity bills in Germany, Naples in Sweden and the UK.
So what is Europe doing?
1. Power rationing: European nations are setting new energy-saving targets and new limits on energy consumption so as not to “waste energy”.
- First, it intends to reduce overall consumption
- Second, it wants to set a mandatory demand reduction target during certain peak hours, which is 3-4 hours per weekday.
Greece has told public sector institutions to turn off the lights or face dire consequences like the withdrawal of public funding from energy companies.
2. Passing on the profits of energy companies to struggling consumers: Europe will levy an “exceptional and temporary” tax on companies in the oil, gas, coal and refining sectors based on their additional profits.
3. Cap on excessive revenues of non-gas companies: Companies that produce electricity from sources other than gas (such as renewable energy, lignite or nuclear energy) will have to limit their electricity prices. The cap will be set at a level to avoid “jeopardizing the availability and profitability of existing power plants” and investments.
4. The lights of the Eiffel Tower will turn off at 11:45 p.m.: The French Eiffel Tower is currently illuminated by these twinkling romantic lights until 1am. But the extravagant lighting may be turned off at 11:45 p.m. in the future. Similar measures were taken in the “victory column” in Germany and in the Kaiser Wilhelm Memorial Church.
5. Coal is back: Heat waves in Europe have caused water levels in reservoirs to drop, causing a hydropower deficit. Europeans therefore turned to expensive coal to maintain their energy supply. Over the past year, the use of coal has increased by 20%, as countries like Germany, Italy, the Netherlands, Spain and the UK have had to look for alternatives.
6. Hot water rationing: German homeowners began rationing hot water and lowering the temperature of their outdoor pools. Some have even started dimming street lights after 11 p.m. to save energy. The Germans were encouraged to reduce the shower time from 10 minutes to 5 minutes.