From Bloomberg via the Financial Post, August 5:
After lockdowns forced Basel Hamzeh to close his cafe in a trendy Berlin neighborhood for months, the 53-year-old is confronting a fresh crisis: high energy bills.
The cost of natural gas and electricity has surged across Europe, reaching records in some countries, as businesses re-open and workers return to the office. In Germany, wholesale power prices have risen more than 60% this year, leaving the owner of the Frau Honig cafe in Friedrichshain with no option but to raise prices of everything from cappuccinos to cinnamon rolls.
“The higher power prices were a double whammy after our cafe was forced to close for such a long time, doing only takeaway during the pandemic,” he said. “We just had to pass on the costs to customers.”
Energy prices are rising around the world as the global economy emerges from the pandemic, fueling concerns about inflation. In Europe, plans to decarbonize the economy are also playing a part as utilities pay near-record prices to buy the pollution permits they need to keep producing power from fossil fuels.
Add to that shortages of natural gas and the result is super-charged electricity prices, a bill consumers will eventually have to foot. Spain was already forced to cut energy taxes as power prices rose to a record, and the U.K. is expected to allow utilities to increase bills a second time this year, a move that will be announced Friday and affects 15 million people.
Higher costs are a headache for politicians less than 100 days before world leaders meet in Scotland to nail down a pathway to net zero. Governments fear a backlash as higher utility bills increase voter resistance to the paying for the energy transition. Swiss voters rejected this year an ambitious climate law that would raise taxes on things like flying and driving.
“Are we going to see yellow vests in the streets, are we going to see a repeat of the Swiss referendum?” said Thierry Bros, an energy professor at the Paris Institute of Political Studies. “You are not going to get re-elected if you are putting so many people into energy poverty. That’s going to be a wake up call for governments.”....
....MUCH MORE
