Due to rising prices and dwindling supplies, Europe’s industrial enterprises must conserve energy, and they are succeeding as both natural gas and electricity use declined in the most recent quarter.
However, it is way too soon to celebrate. The decline is caused by industrial enterprises closing down factories that might never reopen in addition to lowering thermostats.
And while less energy use helps Europe weather the crisis brought on by Russia’s conflict in Ukraine and Moscow’s supply restrictions, CEOs, economists, and industry groups warn that if high energy costs persist, Europe’s industrial base may be seriously harmed.
Energy-intensive industries like aluminium, fertilisers, and chemicals run the risk of businesses moving their operations permanently to countries with an abundance of inexpensive energy, like the United States.
Natural gas in the United States still costs roughly a sixth of what businesses pay in Europe, even after an exceptionally warm October and forecasts for a mild winter contributed to price reductions.
Patrick Lammers, a member of the executive board at utility E.ON, stated at a conference in London last month that ‘a lot of enterprises are just stopping manufacturing.’ They literally call for destruction.