Friday, August 5, 2022
It has been nearly six months since Putin launched his invasion of Ukraine, but for Europe, the worst is yet to come. Already companies are contemplating shutting down production, including aluminium smelters in Slovakia and fertilizer producers in the UK. Corporations need to plan long term, and forward contracts for electricity (which are supposed to lock in energy costs) are at all-time highs for 2023 and 2024.
For the foreseeable future, high energy costs will be the new normal, making the production of everything from food to paper to chemicals more expensive. Furthermore, it is not at all clear to what extent hot water, electricity, and heating will be available in countries like Germany, Austria, Italy, or Hungary – or how the population will react if there should be real shortages in these areas.