"The Era of Peace Ends"... How Are Countries Responding to Climate Disasters and the Energy Crisis?

Europe Faces Energy Crisis Amid Ukraine War and Climate Disasters
Unstable Supply Causes Natural Gas Prices to Soar Nearly 10 Times Compared to Last Year
President Macron Mentions "End of Abundance"

On the 17th (local time), the fountain at Place de la Concorde in Paris, France, stopped operating due to drought, exposing its bottom. France is implementing water-saving policies as drought continues nationwide. [Image source=Yonhap News]

[Asia Economy Reporter Yoon Seul-gi] The energy crisis is becoming a reality as Europe's natural gas supply becomes unstable. This is due to Russia reducing natural gas supplies in retaliation against Western sanctions imposed after the Ukraine war, combined with a surge in energy consumption caused by climate disasters such as heatwaves.

Recently, Europe has been struggling with soaring energy prices. According to the New York Times (NYT) on the 25th, the price of natural gas in Europe is about ten times higher than a year ago. The price surge is due to Russia cutting natural gas supplies to Europe.

The rise in natural gas prices is related to unstable supply. As the energy supply situation worsens, concerns are growing that gas could run out this winter. The NYT stated, "Nord Stream 1, a major fuel route to Germany, is operating at only 20% capacity," adding, "Due to these cuts, gas suppliers have to purchase gas on the spot market, which is more expensive and volatile than long-term contracts with Gazprom."

As rising energy prices fuel inflation, the French government is responding by introducing an energy price cap system that freezes gas prices and limits electricity rate increases. However, due to opposition from the French power industry, which argues that artificially suppressing energy prices is problematic, and the burden on public finances, this measure is expected to be applied only until this winter.

Olivier V?ran, spokesperson for the French government, said at a briefing on the 24th (local time), "Prices will inevitably continue to rise," adding, "We cannot sustain the energy price cap indefinitely." He further stated, "We will draft a bill next month to accelerate energy infrastructure projects and prepare short-term measures to secure energy smoothly for the winter season."

In the UK, electricity and gas bills have surged, and the inflation rate for next year is expected to exceed 18%, marking the highest level in 50 years. This is the highest since 1976, when the global economy was shaken by the oil crisis.

The surge in prices has been driven by the sharp rise in international wholesale gas prices, leading to increased electricity and gas rates. On the 25th (local time), Ofgem, the UK electricity and gas regulator, set the energy price cap effective from October 1st at ?3,549 (approximately 5.57 million KRW) annually for a standard household.

This is 80% higher than the current cap (?1,971) and about three times higher than last October's cap (?1,277). In the UK, about 40% of power generation uses gas, and since energy companies are privatized, it is difficult to limit the extent of energy price increases.

Logo of Russian state-owned gas company 'Gazprom' [Image source=Yonhap News]

Germany, which heavily depends on Russian gas, is also facing an energy emergency. To save energy, Germany announced regulations limiting heating in public buildings and banning lighting on billboards. Starting September 1st, heating in various public buildings such as city halls and railway passenger waiting rooms will be limited to 19 degrees Celsius, and heaters installed in corridors, lobbies, and entrance passages of public buildings will be turned off.

◆ Macron on Energy Crisis: "We Must Face Sacrifices"... Discussions on 'Return to Nuclear Power'

French President Emmanuel Macron referred to the energy crisis coinciding with the Ukraine war as the "end of abundance." According to AFP, at a cabinet meeting held at the ?lys?e Palace on the 24th (local time), he stated that sacrifices might be necessary due to Russia's invasion of Ukraine and the impact of climate change.

President Macron said that the era of abundance, when goods and resources could be easily obtained at will and life was somewhat peaceful, is coming to an end, adding, "We are living through a great upheaval and standing at a turning point." He continued, "Freedom comes at a cost. To win the war we must fight, our efforts are needed," urging acceptance of new measures the government will prepare.

Macron also said, "People may feel uneasy, but we have a duty to speak honestly and very clearly without being overly pessimistic about these issues we face."

As Europe's energy crisis becomes a reality, calls to increase nuclear power generation have emerged. Joseph Stiglitz, Nobel laureate in Economics and University Professor at Columbia University, said in an interview with Die Welt on the 25th (local time) that Germany must use all means, including hydraulic fracturing to extract gas and restarting nuclear power plants, to fight the energy crisis. He emphasized, "We must be pragmatic during wartime," adding, "Now is not the time for passive measures."

This content was produced with the assistance of AI translation services.