The energy crisis is extinguishing industrial chimneys in Greece and Europe

By Harry Floudopoulos

The energy crisis is leading to the extinction of industrial chimneys, as particularly energy-intensive industries are unable to bear the burden of extreme electricity and gas prices. In fact, the problem becomes even more acute as December was the month with the highest prices ever recorded in the domestic electrical system. The problem is not only Greek, since in Europe, large industries are ringing the bell and warning of factory closures, migration of production lines outside Europe and a visible risk of deindustrialisation.

The problem of the energy crisis was reported by the president of the Association of Industries of Attica – Piraeus Dimitris Mathios, who met with the Minister of Energy and Environment Costas Skrekas. According to Mathios, a large number of manufacturing companies are considering reducing or even temporarily suspending their production and export activities under the pressure of high energy prices.

“Under the current circumstances, Greek industries and handicrafts are forced to reduce or even temporarily close their facilities. Especially for export companies, this ongoing situation significantly affects the competitiveness of their products in international markets, as energy costs are a high share. “Export companies are the most exposed to the dramatic increases in electricity and gas prices,” said Mathios.

At the same time outside Greece, large industrial groups decide to close energy-intensive production units, under the weight of the crisis. Yesterday, Alcoa announced that it had reached a final agreement with the unions to close the aluminum plant with a production capacity of 228 thousand metric tons in San Ciprian, Spain. The plant is scheduled to reopen in two years, in January 2024. It is noted that in December in Spain the average price of electricity in the spot market was 244 euros / MWh.

Norway’s Norsk Hydro also announced a few days ago that it is cutting production capacity by 60% at its Slovalco aluminum plant in Slovakia. This reduction corresponds to 35 thousand tons of aluminum per year. In contrast, the company’s plants in Norway are protected from high energy prices as they meet their needs from privately owned hydroelectric plants.

Appeal to the EU for measures

It is worth noting that the European Association of Energy-Saving Industries had issued a statement calling on the European Union to take action to address high energy prices, stressing that record costs undermine competitiveness and push European companies to migrate.

“Prolonged periods of unbearably high energy prices could lead to serious losses, migration of European companies and an increase in carbon leakage,” said a joint statement from European industrial associations, including Cement. Eurofer, Eurometaux metals and Fertilizers Europe fertilizers. According to the industrial associations, urgent measures are needed at European level in order for the affected companies to overcome this situation, which is expected to last several months, and to continue investing in the energy transition.

SVAP package

In Greece, SVAP, during its meeting with RIS, submitted a package of 7 measures to address the crisis. These measures include, inter alia, the conclusion of medium-term contracts of Medium Voltage companies based on average energy costs and the provision of risk insurance for stock market fluctuations, the removal of the ETMEAR charge, the SGI for the Medium Voltage, the return of EF in electricity and gas, the promotion of net metering, the creation of a type of tax-free reserve in companies for dealing with emergencies, the ability to repay bills with increased prices over a period of 6 months and the immediate implementation of measures against its increase electricity and business support as was the case in countries such as Italy, Spain and Portugal.