Europe’s Green Energy Crisis Is Crushing Metals, Making Silicon – Rising Thanks to That?

Quadruple EU energy prices are crippling energy-intensive industries, but the EU sees this as a reason to invest in more renewables.

Guest essay by Eric Worrall

Europe’s silicon output falls, smelters close as electricity prices quadruple, trade body warns

Maybe something needs to be worked out before those chips are built, huh?

Agam Shah Saturday January 22, 2022 // 09:38 UTC

Politicians have been warned this week that rising electricity prices have derailed production related to silicon and non-ferrous metals in Europe.

Eurometaux, a European metals association, urge action [PDF] from the EU, fearing that the region could experience an increase in electricity prices over the next decade if nothing is done to control the situation.

The power crisis has restricted production and closed facilities in the silicon and metals industries across EU countries. “Following the quadrupling of electricity prices, more than half of EU zinc and aluminum smelters are now operating at reduced capacity or temporarily closed, with significant reductions in silicon production,” Eurometaux said. .

Silicon supplier Elkem, headquartered in Norway, also note [PDF] that silicon prices in Europe hit all-time highs in October and November. That was partly driven by market factors including rising silicon prices in China and a potential power crisis. in Brazil, where the company has production facilities.

Europe’s ambitious chip-making plans may not go as planned without some action by the authorities to prevent disruptive electricity price hikes.

“Metals including aluminum, copper, nickel, zinc and silicon all use more electricity to produce than other materials and are valued globally as commodities,” added Eurometaux.

Russian problem

In a speech at the World Economic Forum, von der Leyen called for public and private investment in renewable energy: The EU is trying to move from fossil fuels to cleaner sources.

That said, Europe is currently in the midst of an energy crisis for mixed reasons. The bottom line is that natural gas supplies are running low, and gas and electricity prices in the block have skyrocketed. Late last year, Gazprom was owned by the Russian state reduction Its natural gas supplies to Europe, and speak this is in line with the long-term contracts it has with European buyers.

“Basically, today’s gas crisis must accelerate the transition to clean energy,” says von der Leyen.

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The EU seems to see the Russian gas supply crisis as proof of Russia playing geopolitics with its energy supply, but the truth is that the EU is being victimized by the poor choices of the European Union. their leader.

The EU is having a headache because it doesn’t pre-order enough gas from Russia, they bet spot gas prices will fall, and suffered a heavy loss. Thanks to Russia’s connection to China, Europe is effectively in a bidding war with China, and China is so far willing to spend more money.

China also suffered an energy crisis last year, thanks to incompetent green directives from Chinese Premier Xi Jinping., Therefore Russia triples electricity supply to China to make up for China’s shortfall. China’s IMO demand for energy is most likely the cause of pressure on EU gas prices. EU leadership and energy traders clearly do not see this coming.

If the EU has enough domestic gas supplies, it can get out of Russia’s gas supply crisis, or even participate in profiting from China’s energy crisis, by supplying energy to China through Russian gas pipelines.

But thanks to renewable energy fans like Ursula von der Leyen, the EU has turned its back on the exploitation and development of meaningful domestic energy supplies in favor of imaginary renewable energy programmes.

America is helping Europe with record US gas exports to EU to try to make up Russia short. But European import prices are still sky-high compare to U.S. wholesale gas prices.

Biden quietly rescinds federal fossil fuel mining rental ban last year, in response to a spike in domestic US energy prices. Even so, US prices seem to have stabilized more or less U.S. wholesale gas prices are still significantly higher than last year. Relatively benign US gas prices can be precarious. China is significantly increasing LNG import capacity, which could put additional pressure on global supply.

If President Biden’s hostility to fossil fuel extraction once again puts pressure on US domestic natural gas supplies, domestic natural gas users of the United States could fall into a bidding war with European and Chinese importers, just as Europe is currently in a bidding war with China. The European energy crisis could spread to the US.

The EU can also avoid this crisis by being less greedy and pre-ordering enough gas from Russia at an affordable price to meet its domestic demand when prices are low. Instead, they chose to gamble and lose miserably, given the quality of life of ordinary European citizens, and the fortunes of energy-intensive European industries.

Europeans are paying a heavy price for the incompetence of their leaders.


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