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China goes for cheap coal to beat green West

Net Zero Samizdat

6 March 2023

1) China goes for cheap coal to beat green West
Reuters, 5 March 2023

2) Two-thirds of European battery production at risk without subsidies
Transport & Environment, 6 March 2023

3) Madness on stilts: Hydrogen boilers might need ‘four-inch holes in walls to prevent explosions’
The Daily Telegraph, 3 March 2023

4) Green energy revolt threatens Tory support in minister’s backyard
BBC News, 6 March 2023

5) Race to Net Zero drives up new car prices by £12,000
The Daily Telegraph, 3 March 2023

6) A first win? UK could U-turn on 2035 gas boiler ban as heat pumps cost ‘many times more’
Daily Express, 1 March 2023

7) Ajay Srivastava: ‘Climate’ is the EU’s big trade weapon against the developing world
The Hindu, 5 March 2023

8) After the experts’ Covid fiasco it’s time to take a very hard look at another “settled science” pseudo-consensus: climate doom-saying
Editorial, New York Post, 4 March 2023

9) Matthew Lynn: If Joe Biden can open massive new oil fields, then so can Britain
The Daily Telegraph, 5 March 2023
10) Javier Blas: The new European energy normal remains rather painful
Bloomberg, 6 March 2023

1) China goes for cheap coal to beat green West
Reuters, 5 March 2023

BEIJING, March 5 (Reuters) – China’s state planner underlined a greater role for coal in its power supply on Sunday, saying the fossil fuel would be used to improve the reliability and security of its energy system.

Soaring global energy prices following Russia’s invasion of Ukraine and domestic supply disruption have prompted Beijing to step up its focus on energy security in recent years.

The world’s second-biggest economy relied on coal to generate 56.2% of its electricity last year, according to data from the National Bureau of Statistics, but has significantly boosted its use of natural gas and renewable energy in recent years to lower carbon emissions.

Fluctuating output from renewable plants, however, has led policymakers to lean on reliable and easily dispatchable coal power to shore up the country’s baseload supply. Last year, scorching summer temperatures and a drought in China’s southwest caused hydropower output to dwindle, leading to power outages.

“We will strengthen the basic supporting role of coal (and) take orderly steps to increase advanced coal production while ensuring safety,” said the National Development and Reform Commission (NDRC) in a report to the annual gathering of parliament.

China approved the construction of another 106 gigawatts of coal-fired power capacity last year, four times higher than a year earlier and the highest since 2015, driven by energy security considerations, research showed last week.

About 50GW of that went into construction.

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2) Two-thirds of European battery production at risk without subsidies
Transport & Environment, 6 March 2023

More than two-thirds (68%) of lithium-ion battery production planned for Europe is at risk of being delayed, scaled down or cancelled, new analysis shows. Tesla in Berlin, Northvolt in northern Germany and Italvolt near Turin are among the projects that stand to lose the greatest volumes of their slated capacity as the companies weigh up investing in the US instead. Transport & Environment (T&E), which conducted the research, called for both EU-wide financial support to scale up battery production and faster approvals processes to capture projects at risk from American subsidies.

Battery production capacity equivalent to 18 million electric cars – 1.2 TWh – is at a high or medium risk of being disrupted or lost. Without this expansion, Europe will not be able to satisfy its battery demand in 2030 and will need to import from foreign rivals. T&E used publicly available information to assess the 50 gigafactories announced in Europe based on their finance and permits, whether they had secured a location, and the companies’ links to the US.

Julia Poliscanova, senior director for vehicles and emobility at T&E, said: “EU battery manufacturing is caught in the crossfire between America and China. Europe must act or risk losing it all. A green industrial policy focused on batteries with EU-wide support for scaling up production is urgently needed to react to US subsidies and China’s years of dominance.”

Germany, Hungary, Spain, Italy and the UK stand to lose the most if battery-makers change their plans. Tesla’s Giga Berlin plant has the largest volumes at risk of being delayed in Europe after the company said it will focus cell manufacturing in the US to take advantage of incentives under the Inflation Reduction Act. There is a medium risk to Northvolt’s planned gigafactory in Heide, Germany, as the company has only secured part of the funding and has not started construction. Also, Northvolt’s CEO said last October that it might delay the plant and prioritise expansion in the US.

Italvolt, whose CEO also founded the failed Britishvolt, is at risk of being deprioritised in favour of its sister project, Statevolt, in California. To avoid the fate of Britishvolt, the planned West Midlands gigafactory in the UK still needs to find an investor. The report also places question marks over projects in Serbia and Spain by InoBat, which recently secured incentives for a joint venture with an American company in Indiana.

Europe’s global share of new investment in Li-ion battery production dropped from 41% in 2021 to a meagre 2% in 2022, according to BloombergNEF. Battery investment in the US and China continued to grow, and European companies have already signalled expansion in America. T&E said that companies’ limited resources to scale up production, as well as the tight supply of raw materials, are making the US-Europe battery race a zero-sum game.

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3) Madness on stilts: Hydrogen boilers might need ‘four-inch holes in walls to prevent explosions’
The Daily Telegraph, 3 March 2023

Households that have hydrogen boilers installed could be forced to drill a 4×4-inch hole in their wall to mitigate risks of explosion, according to recommendations in a government-backed safety report.

Residents in a neighbourhood being considered for a trial of hydrogen for home heating have been alarmed by a report’s recommendation that rooms with boilers hobs or substantial pipework “should have non-closable vents with [an] equivalent area of 10,000 mm2”.

The report, by Arup, the design consultants, said these should be located as close to the ceiling level as possible and no more than 50cm below ceiling level.

The same report, which came out in 2019, said that hydrogen for home heating could cause four times as many explosions and injuries than gas boilers without sufficient mitigations, including ventilation.

The report, which is based on a two-storey, masonry-built, terraced house with a basement and a loft conversion, will be used to inform the trials of hydrogen for home heating expected to go ahead from 2025.

Whitby, in the Cheshire town of Ellesmere Port, is one of two neighbourhoods being considered for conversion to hydrogen, with the final decision expected to be made by the Government this year.

In discussions with residents, representatives from Arup and gas network Cadent, which is bidding to run the trial, have said most homes will not require the maximum ventilation given the draughtiness of much of the UK’s housing stock.

Kate Grannell, a resident of Whitby who has led opposition to the plans for the hydrogen trial, said the assurances had not allayed concerns.

She said: “All we’ve done for decades is insulate and draught-proof our houses. So to say homes are leaky enough to void the requirements for ventilation, I think is a really big question.”

Richard Lowes, an energy expert at the Regulatory Assistance Project, said that it ran counter to efforts to reduce draughts and insulate homes to reduce emissions.

He said: “We’re trying to make building more energy efficient and putting in a 10-centimetre hole is doing the opposite of that. So it’s totally backwards.

“To counteract the heat loss, you’d have to have more heat so it is making hydrogen more inefficient. We already know that hydrogen will be more expensive, so it’s making that even more expensive.”

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4) Green energy revolt threatens Tory support in minister’s backyard
BBC News, 6 March 2023

Along a beautiful stretch of England’s east coast, an ugly dispute is exposing the problems inherent in building the country’s future energy system.

The wind farms to be erected in the North Sea are vast in scale and will one day generate enough power for 1.5 million homes.

They are central to the government’s push to hit climate targets and lower energy bills.

But to get the power from the new turbines into the national grid, a sprawling complex of cables and electrical facilities need to be built in a picturesque area of Suffolk.

Some locals are furious, fearing “a devastating cumulative economic, social and environmental impact” – and they predict a political backlash at council polls in May and the next general election, with support for Tory councillors and local MP, Therese Coffey, threatened.

There are versions of this bust-up across England, as Tory MPs struggle to balance government policy on net zero with the demands of constituents. For Environment Secretary Ms Coffey, it’s a particularly awkward dilemma.

“If you look to the left here, there’s a fence with posters. That’s my house.”

The house belongs to a resident of Aldeburgh, where the posters depict a village under siege by a “threatened onslaught” of energy projects.

At the centre of this web of projects are two offshore wind farms approved by the government last year – East Anglia One North (EA1N) and East Anglia Two (EA2). To deliver the power they generate, the developer, ScottishPower, plans to bring cables onshore near Aldeburgh.

The cables would weave underground towards a large industrial site known as a substation, where electricity can be transmitted further inland.

Elizabeth Thomas says the 14m-high substation “will dwarf” Friston, the medieval village next door. Fearing traffic congestion, flood risk and the loss of farmland, the former teacher has been campaigning to move the substation elsewhere.

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5) Race to Net Zero drives up new car prices by £12,000
The Daily Telegraph, 3 March 2023

The average price of a new car has jumped by £12,000 in five years as the industry embraces more expensive electric models as part of the push for net zero.

Prices have leapt 43pc since 2018 as manufacturers junk internal combustion engines in favour of battery power, according to research by Auto Trader.

Higher energy prices, a shortage of parts and consumers’ preference for bigger, safer cars with more technology in them have also driven up prices.

The average new car cost £39,308 in January this year, Auto Trader said, up from £27,305 half a decade earlier.

Manufacturers typically charge around £10,000 more for an electric version of any given model than a petrol one. However, electric vehicles are cheaper to run if charged at home, meaning they offer an overall saving as long as a driver does enough miles.

For example, a Volkswagen Golf starts at around £25,000, compared to £36,400 for a similarly-sized all-electric VW ID.3.

Prices for Nissan’s battery-powered Leaf start at £29,000, while its combustion engine model Juke starts at £20,700.

New vehicle prices are also rising because demand is outstripping supply. New car stock is about 60pc below the levels of early 2021, just below the lockdowns which slashed production around the world.

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6) A first win? UK could U-turn on 2035 gas boiler ban as heat pumps cost ‘many times more’
Daily Express, 1 March 2023

The lack of cheap alternatives to heat homes could result in the Government scrapping its plan to ban gas boilers.

The Government has hinted that it could U-turn on its proposed ban on the sale of new gas boilers by 2035, as energy experts have warned that heat pump costs will not become cheaper. Over the past year, heat pumps have been hailed as a solution for the energy crisis, because run on electricity instead of natural gas, and are far more efficient than traditional boilers. However, the technology has remained prohibitively expensive for millions of households, with average costs of installation being quoted between £10,000 and up to £13,000 according to some estimates.

During a debate in the House of Lord earlier today, Steven Croft, the Lord Bishop of Oxford, hailed the government’s strong policy on banning petrol and diesel cars, and asked whether the Government would consider moving forward the currently proposed ban on new gas boiler sales from 2035 to 2030.

He said: “I know that in 2020, the Government brought forward – in a very welcome way – the date for phasing out new petrol and diesel cars from 2035 to 2030, which has had a very significant positive effect on that market.

“I wonder, has any further consideration been given to bringing forward to 2030- the present date of 2035- of prohibiting the installation of new gas boilers, to further encourage the rapid development of low carbon domestic heating?”

In response, Conservative peer Lord Callanan corrected the Bishop, clarifying that the Government has not yet banned gas boiler sales, even in 2035.

The Parliamentary Under Secretary of State for the Department of Energy Security and Net Zero said: “We have not set a date of 2035 for prohibiting the installation of new gas boilers.

“We have said that it is our aim, but of course, it will crucially depend on the availability of cheap alternatives for people to heat their homes with.”

Speaking to, Mike Foster from the Energy and Utilities Alliance, noted that according to the Government’s 2021 Heat and Buildings Strategy, gas boilers would be banned in 2035 unless their alternatives remain at unaffordable prices.

He said: “It is clear that the cost of installing heat pumps is many times higher than that of installing a gas boiler or replacing a gas boiler.

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7) Ajay Srivastava: ‘Climate’ is the EU’s big trade weapon against the developing world
The Hindu, 5 March 2023

Developing countries will suffer the most as they carry out the most carbon-intensive manufacturing. 

Starting October 1 this year, the exports of cement, Iron, steel, aluminium, fertilizer, and hydrogen to the European Union (EU) will face extra scrutiny. After 27 months, from January 1, 2026, the EU will start collecting a carbon tax on each consignment of these products.

Welcome to the EU’s new regulation ‘Carbon Border Adjustment Mechanism (CBAM)’. CBAM will gradually cover new products. By 2034, CBAM will levied on all the goods exported to the EU.

The quantum of tariff is worrying. CBAM may translate into average taxes ranging from 20-35 per cent on iron, steel, and aluminium products. This is far above the average 2.2 per cent bound tariffs agreed by the EU at the WTO for manufacturers. High CBAM tariffs will render WTO and FTA commitments meaningless.

Let us understand why the EU implements CBAM and how India should prepare for it.

EU’s eco goals

The EU seeks to achieve 55 per cent lower carbon emissions by 2030 compared to 1990 levels. It wants to be carbon-neutral by 2050. Emissions Trading System (EU ETS) is the EU’s instrument for achieving these goals. It monitors emissions from over 10,000 power stations, oil refineries, iron, steel, aluminium, cement, paper, glass factories, and civil aviation.

The ETS system operates through European Emission Allowance (EUA). Call it a license or permit that allows one tonne of CO2 emission. The EU-ETS sets a cap on the quantity of greenhouse gas emissions (mainly carbon dioxide) each installation can release. Each participating firm gets a limited number of annual EUAs.

If their emissions exceed the EUA allowance, they must buy EUAs through auction at ETS. Firms that have reduced their emissions have surplus EUAs. The EU-ETS system reduces cap gradually to reduce emissions.

The firms are expected to achieve lower emissions by investing in better technologies, fossil fuel alternatives, and energy efficiency.

Thus the EU-ETS is a cap-and-trade system that uses market forces to reduce emissions. The system allows the market to determine a carbon price, and that price drives investment decisions.

While the EU ETS covers many industrial sectors for emission reduction, it allows the most polluting sectors, like steel or aluminium, a free run by giving them free emissions allowances or EUAs to cover all their emissions.

Any emission reduction target on such firms will result in EU firms relocating to cheaper destinations like China or India. The phenomenon of shifting polluting sector firms from high-cost countries to low-cost countries is termed carbon leakage.

Rising EU carbon prices (from €30 per tonne of CO2 in December 2020 to €100 in Feb 2023) make carbon leakage likely.

The EU was in a dilemma. Its most polluting industries must reduce emissions to reach its climate goals. But, if the EU permits free allowances and applied the emission reduction norms, most production may shift to low-cost countries.

One way to reduce carbon leakage was to apply CBAM only on imports from EU firms that have shifted production to low-cost countries. But the EU chose to tax all imports through CBAM at EU’s prevailing carbon prices.

It decided to gradually phase out the free allowances from most polluting sectors and simultaneously introduce CBAM to prevent the relocation of industries or carbon leakage in these sectors.

High CBAM tariffs on all products by 2034 will disrupt global trade. Soon the UK, the US, Canada, and many others may take similar measures.

Developing countries will suffer the most as they carry out the most carbon-intensive manufacturing. The developed country-led global value chains ensured that cleaner production takes place in developed countries while the polluting part of production takes place in developing countries.

CBAM will have a negligible impact on climate. The carbon content of the environment will come down as consumption comes down. CBAM has no plans to reduce consumption. EU has estimated that by 2030, global emissions in the CBAM sectors will decrease by 0.4 per cent.

CBAM violates the Paris Agreement’s core principles, vitiating the climate talks. Developed countries have generated 79 per cent of historical carbon emissions. That’s why it has been agreed they will bear more burden in climate mitigation. CBAM goes against the principle of common but differentiated responsibilities (CBDR) accepted in the Paris Agreement.

It imposes the environmental standards of developed countries on developing countries. Also, instead of helping, the EU will now collect revenue from developing countries through the CBAM mechanism. EU will use this money as a budgetary resource and not for helping developing countries with climate adoption.

Brazil, Russia, India, China, and South Africa, in April 2021, in a Joint Statement called CBAM discriminatory, against the principles of Equity and the United Nations Framework Convention on Climate Change (UNFCCC) principle of Common but Differentiated Responsibilities and Respective Capabilities.

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8) After the experts’ Covid fiasco it’s time to take a very hard look at another “settled science” pseudo-consensus: climate doom-saying
Editorial, New York Post, 4 March 2023

Green fanatics, the numbers show, are just as much in the dark about the climate situation as Anthony Fauci et al were about COVID.

With the demolition of the “expert” views on COVID — mask mandates are useless; vaccines fail to stop transmission; the virus most likely came from that Wuhan lab — it’s time to take a very hard look at another major “settled science” pseudo-consensus: climate doom-saying.

Climate change is real, with human activity contributing to it. But the exact mechanics aren’t remotely as well understood as received wisdom has it — and the terror-campaign hysteria about how to address it, from Greta Thunberg and Al Gore all the way to Joe Biden, Kathy Hochul and most of the media, is utterly anti-science.

Carbon fuels and the technologies that depend up them are essential to modern society: Pretending that governments can simply mandate them away, ordering replacements into existence, is out-and-out magical thinking — and policy based on unicorns and magic crystals can only bring disaster and suffering.

Yes, the hysterics also point to disasters and suffering. But that involves even more disconnects from reality (long documented by brave skeptics like Bjorn Lomborg and others). Here just a few:

At the 2021 Glasgow UN climate summit, John Kerry said we had only nine years left to stop global warming. That followed Prince (now King) Charles’ 2019 claim that we had only 18 months. Which conflicted with AOC’s claim that same year that we had only 12 years left. Which cut against the 2004 claim from British greens that climate change would destroy all human civilization by 2020. That timeline undermined the 1989 UN prediction that we had only three years left to win the climate fight — a major fail, after the same body said in 1972 that only a decade remained before time ran out.

Consider, too, the climate refugees, i.e., people supposedly sure to be driven from their homes by climate change. The Institute for Economics and Peace predicts as many as 1.2 billion climate refugees by 2050; but the big brains have as bad a record here as they do on the date of doomsday. The United Nations not so long ago foresaw 50 million such refugees by 2010, a massive migration flow that utterly failed to materialize.
On individual extreme weather events, the record of “experts” is just as miserable. Despite endless predictions of raging wildfires and city-drowning floods, the overall death toll from such events is down drastically, from about 500,000 worldwide in the 1920s to about 18,000 from 2012 to 2022.

Don’t forget the helpless critters greens love to hype up. Remember the vanishing polar bear, a keystone of Al Gore’s moral-panic masterpiece “An Inconvenient Truth”? Turns out their numbers are up from 2.5 to five times since the ’60s. The allegedly dying coral of the Great Barrier Reef now holds more coral than at any time since record-keeping began.

Green fanatics, the numbers show, are just as much in the dark about the climate situation as Anthony Fauci et al were about COVID. Their “solutions” — ban gas stoves! mandate Teslas! eat mealworms! — are equally nonsensical, catering to the imaginations and emotions of rich progressives rather than aiming rationally to mitigate the (very real) risks climate change actually presents.

It’s time we stopped listening to them, for good.

9) Matthew Lynn: If Joe Biden can open massive new oil fields, then so can Britain
The Daily Telegraph, 5 March 2023

We need to get over the bone-headed opposition to oil and gas production

It would be the biggest new oil field in decades. It could supply as much as 2pc of all the oil needed by the United States. And it would be large enough by itself to make a significant difference to the global price, dealing yet another blow to Vladimir Putin’s collapsing war machine in Ukraine.

Over the next couple of weeks, President Joe Biden is expected to approve the Willow Project, a vast new fossil fuel development in Alaska. Despite the fierce opposition of environmental protesters, Biden has decided that the US, and indeed the world, still needs oil.

If the Left-leaning, climate-friendly Biden can approve new energy projects, why can’t we do the same in the UK? No one could possibly accuse Biden of being a climate change denying reactionary. And yet in the US, unlike most of Europe, the debate about energy still has some vague connection to reality.

It recognises that it will take a while and cost a lot to switch to renewables. In the meantime you will need oil and gas – and you might as well produce it yourself rather than buy it from Saudi Arabia.

With plenty of reserves available in this country, perhaps it is time the UK learnt a lesson from Biden – and started to open up some new oil and gas fields of our own.

President Biden is not ignoring climate change or in hock to the oil industry. He is spending so much money on putting the US at the forefront of the shift to green energy that every other country in the world is complaining about the support he is offering.

From subsidies for electric vehicles, to investment in wind and solar power to building the infrastructure for carbon neutral heating, industrial and transport systems he is spending hundreds of billions of dollars to hit net zero as quickly as any other country. On any measure you care to look at, the Biden White House takes this stuff seriously.

And yet, despite that, he is about to approve the biggest new oil field in years. Led by the energy giant ConocoPhillips, the Willow Project in Alaska has the capacity to generate 180,000 barrels of oil a day, or 1.5pc of the US’s total energy needs.

It will add an extra third to Alaska’s annual production. Unsurprisingly, there has been an outcry from environmental activists, with opposition petitions attracting more than a million signatures, and accusations that Biden is breaking his election pledge not to allow new oil drilling on federal land (which, in fairness, has more than an element of truth to it).

Even so, the president is poised to ignore all that and approve the project. Drilling could start before the end of the year.

So if the United States, which is largely energy independent, can decide to go ahead with developing new fossil fuels, then why can’t we do the same in the UK?

It is about being realistic. Renewable energy capacity takes a long time, and it will be years before we can switch heating systems and cars to electricity.

In the meantime, we will still need oil and gas, and we might as well produce it ourselves, creating wealth, jobs and tax revenues in the process, instead of buying it from Russia or Saudi Arabia instead. In Washington, that is just obvious. In London, unfortunately, it still isn’t.

The UK ought to get over its bone-headed opposition to new energy production. In the North Sea, producers have been harassed and taxed out of existence.

Nicola Sturgeon’s Scottish government did everything in its power to stop new licences being approved, even though it is one of the country’s most important industries. Windfall taxes have been slapped on the sector, with the Labour Party calling for those to be even higher.

When energy giants such as Shell or BP announce bumper profits – hardly a surprise when energy prices are so high – they are vilified, and face calls for even stiffer levies. In response, projects have been put on hold, and investment stalled.

Shell said last year it was ‘reviewing’ (corporate speak for scrapping) the money spent in the North Sea, and so has Norway’s Equinor. We can hardly complain if output is falling.

The record on fracking has been even worse. Even though it enabled the US to be independent in energy, and although Texas has hardly been convulsed by earthquakes, in this country it has been effectively banned despite the fact we have vast reserves of shale oil and gas in the North.

Liz Truss’s doomed pro-growth government briefly tried to revive it, but was shot down in a hail of opposition. The result? The UK has a huge deficit in energy, importing £2 billion more a month in oil alone than we export. But, heck, who cares. Apparently it is better to just buy energy from Qatar, or indeed from Biden’s America, than produce the stuff ourselves.

That is ridiculous. It doesn’t make any difference to the environment whether the oil is extracted in this country or somewhere else.

Nor does running down oil capacity do anything to speed up green technology. It just puts us at risk of shortages when supply is tight. Biden at least has the guts to realise we will still need oil for a while longer, and it might as well be American oil instead of anyone else’s.

It might be too much to hope for from anyone in charge of British energy policy – but it is time we took a lesson from Washington and approved some new energy projects in this country as well.

10) Javier Blas: The new European energy normal remains rather painful
Bloomberg, 6 March 2023

Energy prices are likely to stay higher for longer when compared to the pre-crisis levels, meaning European companies face a long-term loss of competitiveness.

After the convulsions of 2022, the European gas market appears to have entered into a new phase. There are two ways to describe the current environment: The glass half-full view sees prices down 85% from their peak, the half-empty one says they are double their pre-crisis levels. Both are true — to reconcile them, I’m calling it “the new European energy normal.”

In that new normal, European gas changes hands at €45 ($48) to €50 per megawatt hour. For many policymakers, who witnessed prices spiking to about €350 in August and feared blackouts and freezing homes, it’s a cause of celebration. The crisis is over, so the thinking goes from Brussels to London. Europe won, Vladimir Putin lost. I wish it was that simple.

For businesses, which paid an average of €20 for their gas between 2010 and 2020, it’s more complicated. For most, current prices are still painful, although they can probably weather them with some additional belt tightening. For the region’s energy-intensive industries, such as chemical companies and glass manufacturers, prices remain catastrophically elevated.

It’s a similar story in power markets. UK short-term electricity prices appear to have settled at just under £150 ($180) per megawatt hour. That’s a fraction of the £550 seen in August and December last year, but triple the 2010-2020 average of just £45.

Facing what now looks like a long-term, and perhaps permanent, increase in costs, companies are raising prices to protect margins. […]

The new energy backdrop means much lower energy costs than at the peak of the crisis in 2022. But prices are likely to stay higher for longer when compared to the pre-crisis levels, meaning European companies face a long-term loss of competitiveness and the region faces more entrenched inflation. That’s nothing to celebrate.

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