TOKYO, Feb 2 (Reuters) – Japan’s Honda Motor Co (7267.T) said it will start producing a new hydrogen fuel cell system jointly developed with General Motors Co (GM.N) this year and gradually step up sales this decade, in a bid to expand its hydrogen business.
Honda will target annual sales of around 2,000 units of the new system in the middle of this decade, the company said on Thursday, aiming to boost that to 60,000 units per year in 2030.
The Japanese carmaker is seeking to expand the use of its new system not only for its own fuel cell electric vehicles (FCEVs), but also commercial vehicles such as heavy trucks, as stationary power stations and in construction machinery.
Honda will start production of the hydrogen fuel cell system through its joint venture with GM this year, Honda senior managing executive director Shinji Aoyama told reporters during a company event in Tokyo.
Latest Updates
View 2 more stories
With the “next-generation” system, the company aims to more than double durability compared with its older fuel cell system and to bring costs down by two-thirds.
“While commercial vehicles are in use all over the world, they’ll likely see electrification just as with passenger cars,” said Tetsuya Hasebe, general manager of Honda’s hydrogen business development division.
That would likely lead to a divergence in trucks using batteries and those running on fuel cells, he added.
Reporting by Daniel Leussink; Editing by Chang-Ran Kim and Jamie Freed
Our Standards: The Thomson Reuters Trust Principles.
Jan 11 (Reuters) – U.S. clean energy companies are offering better wages and benefits, flying in trainers from overseas, and contemplating ideas like buying roofing and electric repair shops just to hire their workers as firms try to overcome a labor shortage that threatens to derail President Joe Biden’s climate change agenda.
The Inflation Reduction Act, signed into law last year, provides for an estimated $370 billion in solar, wind and electric vehicle subsidies, according to the White House. Starting Jan. 1, American consumers can take advantage of those tax credits to upgrade home heating systems or put solar panels on their roofs. Those investments will create nearly 537,000 jobs a year for a decade, according to an analysis by BW Research commissioned by The Nature Conservancy.
Reuters Graphics Reuters Graphics
But with the U.S. unemployment rate at an historic low of 3.5%, companies say they fear they will struggle to fill those jobs, and that plans to transition away from fossil fuels could stall out. Despite layoff announcements and signs of a slowdown elsewhere in the economy, the labor market for clean energy jobs remains tight.
“It feels like a big risk for this expansion. Where are we going to find all the people?” said Abigail Ross Hopper, president of the Solar Energy Industries Association trade group.
The shortage is anticipated to hit especially hard in electric vehicle and battery production and solar panel and home efficiency installations, forcing some of the companies into bold new approaches to find workers.
Korea’s SK Innovation Co Ltd, which makes batteries for Ford Motor Co’s (F.N) F-150 Lightning all-electric pickup truck in Commerce, Georgia, has pumped up pay and benefits as it ramps up its U.S. workforce to 20,000 people by 2025 from 4,000 today.
The battery maker is advertising pay between $20 and $34 an hour, above Georgia’s median hourly wage of $18.43, according to the U.S. Bureau of Labor Statistics. It is also covering 100% life insurance costs and matching retirement plan contributions up to 6.5%, above the national average of 5.6%, according to the Plan Sponsor Council of America. And the company is providing free food on the job.
“Georgia’s talent pool is not really massive. But we are trying to improve some of our policies to better source and retain workers,” said an SK official who declined to be named, citing the sensitivity of the matter.
Georgia state officials said SK’s hiring has been a success considering how quickly production had to ramp up to meet the company’s obligations to automakers.
While national residential solar installer SunPower Corp (SPWR.O) is recruiting aggressively, Chief Executive Peter Faricy said the company is also looking at what he called “crazy ideas” to secure labor – including buying up companies just for their workers.
“I’m not suggesting we will do this, but I want to give you an order of magnitude of what we’re considering. Like, should we acquire a roofing company and make them all solar installers? Do we go buy an electrical company and acquire 100 electricians?” he said.
SunPower also held talks within the last year with panel manufacturer First Solar Inc (FSLR.O) about developing a solar panel that would be easier to install, enabling crews to outfit two homes a day instead of just one, Faricy said.
SunPower’s competitor, Sunrun Inc (RUN.O), is deploying drones to survey roofs ahead of installation, reducing the number of workers required to scale roofs. It is also rewarding top crews with office parties.
“As best you can game-ify the experience for the employee… it just makes the industry more fun, more attractive,” Chris McClellan, Sunrun’s senior vice president of operations, said in an interview.
Offshore wind developer Orsted (ORSTED.CO), a Danish company that is planning to build projects off the East Coast, hopes to fly in employees from projects in the United Kingdom and Asia to help train staff. State reports have indicated that New York and Massachusetts face large offshore wind workforce gaps.
“We’re creating sort of an ecosystem where we don’t just have an offshore wind academy, but really train the trainers of the future,” said Mads Nipper, Orsted’s CEO, told Reuters.
The Biden Administration has repeatedly promised that new green energy jobs would be well-paying union jobs.
But many of those jobs have lagged the fossil fuel industry in pay, according to a 2021 study by BW Research, as clean energy companies have sought to contain costs to compete with entrenched industries. The IRA seeks to address that by tying prevailing wage and apprenticeship requirements to the subsidies.
Those provisions — and the hiring challenges — have put pressure on some employers to use unionized labor.
Learning from its earlier hiring challenges in Europe and Asia, Orsted signed an agreement with North America’s Building Trades Unions to secure workers.
Even Amazon.com Inc (AMZN.O), a company that has been embroiled in disputes with workers trying to organize, has used union labor to build the electric charging infrastructure for its fleet of electric delivery vehicles in Maspeth, Queens, NY.
Amazon did not respond to requests for comment.
Corrine Case, an electrician represented by the International Brotherhood of Electrical Workers, said she was paid $43 an hour to install the charging system at Amazon.
A single mother, Case said she was excited about the job security offered by the rising demand for electricians to install charging stations.
“Our field is constantly changing because of new energy sources and to be a part of that is amazing,” she said.
FREE WORKER TRAINING
In their hunt for workers, solar, wind and electric vehicle companies have expanded programs offering free and subsidized training to military veterans, women and the formerly incarcerated.
SK told Reuters that it has been recruiting at military job fairs and American Legion chapters and collaborating with programs like the Georgia National Guard’s Work for Warriors and the Manufacturing Institute’s Heroes MAKE America.
Some solar companies have tried to recruit veterans, saying the skills learned in military life translate well to the industry.
Utility scale solar developer SOLV Energy, SunPower and Nextracker last year teamed up with nonprofit Solar Energy International to fund a women-only training program for solar installers. More than 30 women attended the week-long course in Colorado.
In October, the nonprofit Solar Hands-On Instructional Network of Excellence (SHINE) teamed up with the Virginia Department of Corrections on a pilot program to train 30 prison inmates and recently incarcerated people in solar panel installation. SHINE’s director David Peterson said the group is discussing expanding the program.
In California, the nonprofit Grid Alternatives has trained 150 inmates at the Madera County jail in solar installation since 2017 and is expanding its program this year to other facilities in the state. Potential employers are more open to hiring the formerly incarcerated once they see they have received some training, Tom Esqueda, the nonprofit’s outreach manager, said.
In Los Angeles, nonprofit Homeboy Industries, which works to rehabilitate former gang members, is using the potential job opportunities for solar panel installers to help recruits for its state-funded jobs program. Homeboy trains 50-60 people a year as solar panel installers.
More than 80% of the people who have gone through the training in the last year have found jobs in solar, according to Jackie Harper, who oversees the program.
“I’m going to be sticking with this,” said Marco Reyes, 28, who went through the program after his release from prison in February and earns $23 an hour as an installer in Valencia, California.
He now plans to train in the electrical end of solar installation, which would bump up his pay.
“Everyone has a chance to move up the ladder into a better position,” he said. “This job to me is a life changer.”
Read more:
Korea’s Hanwha Qcells to invest $2.5 bln in U.S. solar supply chain
U.S. solar installations to fall 23% this year due to China goods ban -report
Reporting by Nichola Groom and Valerie Volcovici; Edited by Richard Valdmanis and Suzanne Goldenberg
Our Standards: The Thomson Reuters Trust Principles.
Dec 7 (Reuters) – The first ever auction of offshore wind development rights off the coast of California entered its second day on Wednesday, with high bids topping $460 million.
The Biden administration’s sale is a major milestone in the its goal to put turbines along every U.S. coastline and a critical test of developer appetite for investment in floating wind turbines, an emerging technology necessary in locations where the ocean floor is too deep for fixed equipment.
The Interior Department’s Bureau of Ocean Energy Management (BOEM) is auctioning five lease areas equal to a combined 373,267 acres (151,056 hectares) off the state’s north and central coasts. Previous federal offshore wind auctions have all been for leases in shallower waters of the Atlantic Ocean.
After 22 rounds of bidding, high bids totaled a combined $462.1 million. Two leases off the central coast had commanded high bids of more than $100 million, with the remaining leases attracting high bids in a range of $62.7 million to $98.8 million, according to live auction results on the BOEM web site.
The identities of the bidders are not disclosed during the auction, but 43 companies had been approved to participate.
They include established offshore wind players like Avangrid Inc (AGR.N), Orsted (ORSTED.CO) and Equinor (EQNR.OL), which are all developing projects on the U.S. East Coast, as well as potential new entrants including Swedish floating wind developer Hexicon (HEXI.ST) and Macquarie (MQG.AX) unit Corio.
Reporting by Nichola Groom; Editing by Alexander Smith
Our Standards: The Thomson Reuters Trust Principles.
Nov 11 (Reuters) – More than 1,000 shipments of solar energy components worth hundreds of millions of dollars have piled up at U.S. ports since June under a new law banning imports from China’s Xinjiang region over concerns about slave labor, according to federal customs officials and industry sources.
The level of seizures, which has not previously been reported, reflects how a policy intended to heap pressure on Beijing over its Uyghur detention camps in Xinjiang risks slowing the Biden administration’s efforts to decarbonize the U.S. power sector to fight climate change.
U.S. Customs and Border Protection has seized 1,053 shipments of solar energy equipment between June 21, when the Uyghur Forced Labor Protection Act went into effect, and Oct. 25, it told Reuters in response to a public records request, adding none of the shipments have yet been released.
The agency would not reveal the manufacturers or confirm details about the quantity of solar equipment in the shipments, citing federal law that protects confidential trade secrets.
Three industry sources with knowledge of the matter, however, told Reuters the detained products include panels and polysilicon cells likely amounting to up to 1 gigawatt of capacity and primarily made by three Chinese manufacturers – Longi Green Energy Technology Co Ltd (601012.SS), Trina Solar Co Ltd (688599.SS) and JinkoSolar Holding Co (JKS.N).
Combined, Longi, Trina and Jinko typically account for up to a third of U.S. panel supplies. But the companies have halted new shipments to the United States over concerns additional cargoes will also be detained, the industry sources said.
The sources asked not to be named because they were not authorized to speak publicly on the matter.
China denies abuses in Xinjiang. Beijing initially denied the existence of any detention camps, but then later admitted it had set up “vocational training centers” necessary to curb what it said was terrorism, separatism and religious radicalism in Xinjiang.
Chinese foreign ministry spokesperson Zhao Lijian told a regular news briefing on Friday that claims about the use of forced labor in Xinjiang were “the lie of the century fabricated by a small group of anti-China individuals” and would hinder the global response to climate change.
“The U.S. side should immediately stop the unreasonable suppression of China’s photovoltaic enterprises and release the seized solar panel components as fast as possible,” he said.
In an email, Jinko said it is working with CBP on documentation proving its supplies are not linked to forced labor and is “confident the shipments will be admitted.”
Longi and Trina did not respond to requests for comment.
The bottleneck is a challenge to U.S. solar development at a time the Biden administration is seeking to decarbonize the U.S. economy and implement the Inflation Reduction Act (IRA), a new law that encourages clean energy technologies to combat climate change.
Solar installations in the United States slowed by 23% in the third quarter, and nearly 23 gigawatts of solar projects are delayed, largely due to an inability to obtain panels, according to the American Clean Power Association trade group.
ACP urged the Biden administration to streamline the vetting process for imports.
“After more than four months of solar panels being reviewed under UFLPA, none have been rejected and instead they remain stuck in limbo with no end in sight,” it said in a statement.
The UFLPA essentially presumes that all goods from Xinjiang are made with forced labor and requires producers to show sourcing documentation of imported equipment back to the raw material to prove otherwise before imports can be cleared.
CBP would not comment on the length of the detainments or say when they might be released or rejected. “Ultimately, it is contingent upon how quickly an importer is able to submit sufficient documentation,” CBP spokesperson Rhonda Lawson said.
Longi, Trina and Jinko source most of their polysilicon from U.S. and European suppliers such as Hemlock Semiconductor, a Michigan-based joint venture between Corning Inc and Shin-Etsu Handotai Co Ltd, and Germany’s Wacker Chemie, the industry sources said.
A Wacker spokesperson would not comment on the U.S. detainments but said the company sources quartzite from suppliers in Norway, Spain and France.
“Our procurement strategy gives us every reason to be confident that the products used in our supply chain are made in a manner that respects human rights,” spokesperson Christof Bachmair said.
Hemlock said in a statement that it sources all metallurgical-grade silicon from suppliers using quartz mined in North and South America.
CBP has previously said that it had detained about 1,700 shipments worth $516.3 million under UFLPA through September but has never before detailed how many of those shipments contained solar equipment.
The EU has also proposed a ban on products from Xinjiang but has not implemented one.
Reporting by Nichola Groom; Additional reporting by Eduardo Baptista in Beijing and David Stanway in Shanghai; Editing by Richard Valdmanis, Lisa Shumaker, Lincoln Feast and David Evans
Our Standards: The Thomson Reuters Trust Principles.
Oct 21 (Reuters) – Russia and Ukraine have accused each other of planning to blow up the Kakhovka hydro-electric dam on the Dnipro River, a step that would unleash a devastating flood across a large area of southern Ukraine.
What is the Kakhovka dam, is it about to be blown and what impact would that have?
SIGNIFICANCE OF THE DAM
Register now for FREE unlimited access to Reuters.com
* The dam, 30 metres (yards) tall and 3.2 km (2 miles) long, was built in 1956 on the Dnipro river as part of the Kakhovka hydroelectric power plant.
* It holds an 18 km3 reservoir which also supplies water to the Crimean peninsula, annexed by Russia in 2014, and to the Zaporizhzhia nuclear plant, which is also under Russian control.
* The volume of water in the reservoir is about equal to the Great Salt Lake in the U.S. state of Utah.
* Blowing the Soviet-era dam, which is controlled by Russia, would unleash a wall of devastating floodwater across much of the Kherson region which Russia last month proclaimed as annexed in the face of a Ukrainian advance.
* Destroying the Kakhovka hydro-electric power plant would also add to Ukraine’s energy woes after weeks of Russian missile strikes aimed at generation and grid facilities which Kyiv said have damaged a third of its country-wide power network.
ALLEGATIONS
* Sergei Surovikin, the commander of Russian forces in Ukraine, said on Tuesday he had information that Ukrainian forces were preparing a massive strike on the dam and had already used U.S.-supplied HIMARS missiles of a major strike, he said, could be a disaster.
“We have information on the possibility of the Kyiv regime using prohibited methods of war in the area of the city of Kherson, on the preparation by Kyiv of a massive missile strike on the Kakhovka hydro-electric dam,” Surovikin said.
Ukrainian officials said the allegation was a sign that Moscow planned to attack the dam and blame Kyiv.
* Ukrainian President Volodymyr Zelenskiy said on Thursday that Russia had mined the dam and was preparing to blow it, a step he compared to the use of weapons of mass destruction.
“I informed the Europeans today, during the meeting of the European Council, about the next terrorist attack, which Russia is preparing for at the Kakhovka hydroelectric power plant,” he said. “Destroying the dam would mean a large-scale disaster.”
Blowing the dam, he said, would also destroy the water supply to Crimea and thus show that Russia had accepted that it could not hold onto the peninsula.
Kirill Stremousov, the Russian-installed deputy head of the annexed Kherson region, said Kyiv’s allegations that Russia had mined the dam were false.
Register now for FREE unlimited access to Reuters.com
Reporting by Reuters; editing by Guy Faulconbridge and Philippa Fletcher
Our Standards: The Thomson Reuters Trust Principles.
Register now for FREE unlimited access to Reuters.com
SAMARKAND, Uzbekistan, Sept 16 (Reuters) – President Vladimir Putin on Friday denied Russia had anything to do with Europe’s energy crisis, saying that if the European Union wanted more gas it should lift sanctions preventing the opening of the Nord Stream 2 pipeline.
Speaking to reporters after the Shanghai Cooperation Organisation summit in Uzbekistan, Putin blamed what he called “the green agenda” for the energy crisis, and insisted that Russia would fulfil its energy obligations.
“The bottom line is, if you have an urge, if it’s so hard for you, just lift the sanctions on Nord Stream 2, which is 55 billion cubic metres of gas per year, just push the button and everything will get going,” Putin said.
Register now for FREE unlimited access to Reuters.com
Nord Stream 2, which lays on the bed of the Baltic Sea almost in parallel to Nord Stream 1, was built a year ago, but Germany decided not to proceed with it just days before Russia sent its troops into Ukraine on Feb. 24.
Russian President Vladimir Putin speaks during a news conference following the Shanghai Cooperation Organization (SCO) summit in Samarkand, Uzbekistan September 16, 2022. Sputnik/Sergey Bobylev/Pool via REUTERS
European gas prices more than doubled from the start of the year amid a decline in Russian supplies.
This year’s price surge has squeezed struggling already consumers and forced some industries to halt production.
Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia says the West has launched an economic war and sanctions have hampered Nord Stream 1 pipeline operations.
Russia has cut off gas supplies to several countries, includingBulgaria and Poland, because they refused to pay in roubles rather than the currency of the contract.
Russian gas giant Gazprom (GAZP.MM) also said earlier this month the Nord Stream 1 pipeline, Europe’s major supply route, would remain shut as a turbine at a compressor station had an engine oil leak, sending wholesale gas prices soaring. read more
Register now for FREE unlimited access to Reuters.com
Reporting by Reuters; Editing by Kevin Liffey/Guy Faulconbridge
Our Standards: The Thomson Reuters Trust Principles.
DETROIT/LOS ANGELES, Sept 14 (Reuters) – Biden administration officials hosted labor contract talks late on Wednesday to avert a potential rail shutdown that could disrupt cargo shipments and impede food and fuel supplies, but one small union rejected a deal and Amtrak canceled all long-distance passenger trips.
Railroads including Union Pacific (UNP.N), Berkshire Hathaway’s (BRKa.N) BNSF and Norfolk Southern (NSC.N) have until a minute after midnight on Friday to reach deals with three holdout unions representing about 60,000 workers before a work stoppage affecting freight and Amtrak could begin.
Talks between labor unions and railroads, which started at 9 a.m, were still underway more than 12 hours later after 9 p.m. ET on Wednesday at the U.S. Labor Department’s headquarters in Washington.
Register now for FREE unlimited access to Reuters.com
The talks are being overseen by Labor Secretary Marty Walsh, with input from other U.S. officials. The parties ordered in Italian food for dinner Wednesday in order to continue discussions.
“Everybody is going to have to move a little in order to get a deal done,” Buttigieg told reporters on the sidelines of the Detroit auto show.
A union representing about 4,900 machinists, mechanics and maintenance personnel said on Wednesday its members voted to reject a tentative deal.
Rail workers have gone three years without a raise amid a contract dispute, while rail companies have recorded robust profits.
In the current talks, the industry has offered annual wage increases from 2020 to 2024, equal to a 24% compounded hike. Three of 12 unions, representing about half of the 115,000 workers affected by the negotiations, are asking for better working conditions.
Two of those 12 unions, representing more than 11,000 workers, have ratified deals, the National Carriers’ Conference Committee (NCCC), which is bargaining on behalf of railroads, said on Wednesday.
Unions are enjoying a surge of public and worker support in the wake of the pandemic, when “essential” employees risked COVID-19 exposure to keep goods moving and employers reaped hefty profits, labor and corporate experts say.
A shutdown could freeze almost 30% of U.S. cargo shipments by weight, stoke inflation, cost the U.S. economy as much as $2 billion per day and unleash a cascade of transportation woes affecting the U.S. energy, agriculture, manufacturing and retail sectors.
A cargo train is seen near the border between the U.S. and Mexico, in Laredo, Texas U.S. June 3, 2019. REUTERS/Carlos Jasso
White House spokeswoman Karine Jean-Pierre told reporters aboard Air Force One that a shutdown of the freight rail system would be an “unacceptable outcome for our economy and the American people and all parties must work to avoid just that.”
HIGH STAKES FOR BIDEN
President Joe Biden’s administration has begun making contingency plans to ensure deliveries of critical goods in the event of a shutdown.
The stakes are high for Biden, who has vowed to rein in soaring consumer costs ahead of November elections that will determine whether his fellow Democrats maintain control of Congress.
“Unless they reach a breakthrough soon, rail workers will go on strike this Friday. If you don’t think that will have a negative impact on our economy … think again,” said U.S. Senator John Cornyn, a Republican and Biden critic.
Senator Bernie Sanders late on Wednesday objected to a Republican bid to unanimously approve legislation to prevent a rail strike, noting the profits the rail industry has made.
If agreements are not reached, employers could also lock out workers. Railroads and unions may agree to stay at the bargaining table, or the Democratic-led U.S. Congress could intervene by extending talks or establishing settlement terms. read more
House of Representatives Speaker Nancy Pelosi said it was not clear whether Congress would step in, noting that the main issue is a lack of sick leave for workers.
Amtrak, which uses tracks maintained by freight railways, said it would cancel all long-distance trips on Thursday and some additional state-supported trains. read more
Rail hubs in Chicago and Dallas were already clogged and suffering from equipment shortages before the contract showdown. Those bottlenecks are backing up cargo at U.S. seaports by as much as a month. And, once cargo gets to rail hubs in locations such as Chicago, Dallas, Kansas City and Memphis, Tennessee, it can sit another month or longer.
Package delivery company United Parcel Service (UPS.N), one of the largest U.S. rail customers, and U.S. seaports said they are working on contingency plans.
Meanwhile, factory owners are fretting about idling machinery while automakers worry that a shutdown could extend vehicle buyer wait times. Elsewhere, food and energy companies warn that additional service disruptions could create even sharper price hikes.
Register now for FREE unlimited access to Reuters.com
Reporting by David Shepardson and Lisa Baertlein; Additional reporting by Jeff Mason aboard Air Force One; Joe White in Detroit; Chris Walljasper in Chicago and Abhijith Ganapavaram in Bengaluru; Editing by Will Dunham, Jonathan Oatis, Bill Berkrot and Michael Perry
Our Standards: The Thomson Reuters Trust Principles.
Register now for FREE unlimited access to Reuters.com
Gazprom says ball is in Siemens Energy’s court
Siemens Energy: we don’t understand Gazprom
Siemens Energy: not commissioned to do maintenance
Germany discussing energy rationing
Russia: We’ll send our oil to Asia
VLADIVOSTOK, Russia, Sept 6 (Reuters) – Russia’s biggest natural gas pipeline to Europe will not resume pumping until Siemens Energy (ENR1n.DE) repairs faulty equipment, Gazprom’s (GAZP.MM) Deputy Chief Executive Vitaly Markelov told Reuters on Tuesday.
Europe is facing its worst gas supply crisis ever, with energy prices soaring and German importers even discussing possible rationing in the European Union’s biggest economy after Russia reduced flows westwards.
Gazprom (GAZP.MM) on Friday said the Nord Stream 1 pipeline, Europe’s major supply route, would remain shut as a turbine at a compressor station had an engine oil leak, sending wholesale gas prices soaring. read more
Register now for FREE unlimited access to Reuters.com
When asked when Nord Stream 1 would start pumping gas again, Markelov told Reuters on the sidelines of the Eastern Economic Forum in the Russian Pacific port of Vladivostok: “You should ask Siemens. They have to repair equipment first.”
Siemens Energy said it was not currently commissioned by Gazprom to do maintenance work on the turbine with the suspected engine oil leak, but was on standby.
The company, headquartered in Munich, Germany, said on Tuesday that it did not comprehend Gazprom’s presentation of the situation.
It said an engine oil leak at the last remaining turbine in operation at the Portovaya compressor station did not constitute a reason to keep the pipeline closed. read more
“We cannot comprehend this new representation based on the information provided to us over the weekend,” Siemens Energy said in a written statement.
“Our assessment is that the finding communicated to us does not represent a technical reason for stopping operation. Such leaks do not normally affect the operation of a turbine and can be sealed on site,” it added.
Pipes at the landfall facilities of the ‘Nord Stream 1’ gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke//File Photo
ENERGY WAR?
The Kremlin blames the energy crisis on sanctions imposed on Russia by the West over what President Vladimir Putin calls its “special military operation” in Ukraine. European leaders say Moscow is using energy to blackmail the EU.
Nord Stream 1, which runs under the Baltic Sea to Germany, is by far the biggest Russian gas pipeline to Europe, carrying up to 59.2 billion cubic metres of gas per year.
Once considered a symbol of the cooperation between one of the world’s biggest energy powers and the world’s fourth largest economy, Nord Stream has now become the subject of recriminations between Berlin and Moscow.
Germany, the biggest European purchaser of Russian energy, says Russia is no longer a reliable supplier. EU politicians say Putin is using his clout as the head of one of the world’s biggest energy powers to stoke discord in Europe over the conflict in Ukraine.
Germany dismisses Gazprom’s explanations about turbine issues as a pretext.
But the Kremlin says that the West triggered the energy crisis by imposing the most severe sanctions in modern history, a step Putin says is akin to a declaration of economic war.
The Kremlin also warned that Russia would retaliate over a G7 proposal to impose a price cap on Russian oil, a step that is unlikely to hurt Russia unless China and India were to follow suit.
Russian Energy Minister Nikolai Shulginov said on Tuesday in Vladivostok that Russia will respond to the price cap by shipping more oil to Asia. He said Russia and its partners were considering setting up an insurer to facilitate the oil trade. read more
Register now for FREE unlimited access to Reuters.com
Reporting by Vladimir Soldatkin; Editing by Guy Faulconbridge and Jan Harvey
Our Standards: The Thomson Reuters Trust Principles.
EU says Moscow weaponised gas, Russia blames sanctions
LONDON/OSLO, Sept 5 (Reuters) – European gas prices surged, stocks slid and the euro sank on Monday after Russia halted gas flows via a major pipeline, sending another shock wave through economies in the region still struggling to recover from the pandemic.
European Union governments are pushing through multi-billion euro packages to prevent utilities buckling under a liquidity squeeze and to protect households from soaring energy bills.
Prices could rise further after Russia’s state-controlled Gazprom said it would stop pumping gas via Nord Stream 1.
Register now for FREE unlimited access to Reuters.com
Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia blames those sanctions for causing the gas supply problems, which were down to a pipeline fault.
Many European power distributors have already collapsed and some major generators could be at risk, hit by caps that limit the prices rises they can pass to consumers or caught out by hedging bets, with gas prices now 400% more than a year ago.
Finland aims to offer 10 billion euros ($10 billion) and Sweden 250 billion Swedish crowns ($23 billion) in liquidity guarantees to their power companies.
“The government’s programme is a last-resort financing option for companies that would otherwise be threatened with insolvency,” Finland’s Prime Minister Sanna Marin said.
Utilities often sell power in advance to secure a certain price but must maintain a “minimum margin” deposit in case of default before they supply the power. This has raced higher with surging power prices, leaving companies struggling to find cash.
The benchmark gas price rose as much as 35% at one point on Monday after Gazprom (GAZP.MM) said on Friday a leak in the Nord Stream 1 pipeline’s equipment meant it would stay shut beyond last week’s three-day maintenance halt.
European financial markets reeled on the news, with the euro sinking to a 20-year low and shares tumbling. read more
Nord Stream 1, which runs under the Baltic Sea to Germany, historically supplied about a third of the gas Russia exported to Europe, although it was already running at just 20% of capacity before last week’s maintenance outage.
WESTERN SANCTIONS
“Problems with gas supply arose because of the sanctions imposed on our country by Western states, including Germany and Britain,” Kremlin spokesman Dmitry Peskov said on Monday.
“There are no other reasons that lead to problems with supplies,” Peskov added. read more
Adding to the standoff, he also said Russia would retaliate if G7 states imposed a price cap on Russian oil. read more
Although Russia also sends gas to Europe via pipeline across Ukraine, those supplies have also been reduced during the crisis, leaving the EU racing to find alternative supplies to refill gas storage facilities for winter.
Pipes at the landfall facilities of the Nord Stream 1 gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke
Germany, more reliant than most EU states on Russian gas, has offered a multibillion-euro bailout to power utility Uniper (UN01.DE). Berlin said also it would spend at least 65 billion euros to shield customers and businesses from soaring inflation, stoked by surging energy prices. read more
Berlin said on Monday it plans to keep two of its three remaining nuclear power stations on standby, beyond a year-end deadline to ditch the fuel altogether, to ensure it has enough electricity through the winter.
German Economy Minister Robert Habeck said in a statement on Monday that the move did not mean Berlin was reneging on its long-standing promise to exit nuclear energy by the end of 2022.
Meanwhile, French President Emmanuel Macron said after a call with German Chancellor Olaf Scholz that in the event of energy shortages arising from the Ukraine conflict, Berlin and Paris will support one another. read more
“Germany needs our gas and we need power from the rest of Europe, notably Germany,” Macron told a news briefing.
And Ukraine’s Prime Minister Denys Shmyhal urged the EU to supply Kyiv with more weapons, while offering to help out with gas deliveries to reduce the bloc’s dependence on Russia, which supplied around 155 bcm of gas to Europe last year.
RECESSION FEARS
Some energy-intensive industries in Europe, such as fertiliser makers and aluminium producers, have already scaled back production. Other industries, already grappling with chip shortages and logistics logjams, face rocketing fuel bills.
Several EU states have triggered emergency plans that could lead to energy rationing and fuelling recession fears, with inflation soaring and interest rates on the rise.
“We cannot rule out that Germany might look at rationing gas,” Uniper Chief Executive Klaus-Dieter Maubach told Reuters on the sidelines of the Gastech conference in Milan.
Germany, which is installing liquefied natural gas (LNG) terminals so it can ship in fuel and expand its range of global suppliers, is at phase two of a three-stage emergency gas plan. Phase three would see some industry rationing. read more
German households will be prioritised in the event of the plan being activated but will not be able to heat swimming pools or saunas, the energy regulator said on Monday.
The global market for LNG was already tight as the world economy sucked up supplies in the recovery from the pandemic. The Ukraine crisis has added further demand.
Norway, a major European producer, has been pumping more gas into European markets but cannot fill the gap left by Russia.
EU countries’ energy ministers are due to meet on Sept. 9 to discuss options to rein in soaring energy prices including gas price caps and emergency credit lines for energy market participants, a document seen by Reuters showed. read more
Klaus Mueller, president of Germany’s Federal Network Agency energy regulator, said in August that even if its gas stores were 100% full, they would be empty in 2-1/2 months if Russian gas flows were halted completely.
Germany’s storage facilities are now about 85% full, while facilities across Europe hit an 80% target last week.
Register now for FREE unlimited access to Reuters.com
Reporting by Susanna Twidale in London, Nora Buli in Oslo, Supantha Mukherjee in Stockholm and Essi Lehto in Helsinki; Writing by Edmund Blair and Alexander Smith; Editing by Mark Potter and Carmel Crimmins
Our Standards: The Thomson Reuters Trust Principles.
Register now for FREE unlimited access to Reuters.com
IAEA says Zaporizhzhia plan still producing electricity
Zelenskiy: Russia plans ‘decisive energy blow on all Europeans’
Russia delays pipeline reopening in blow to Europe
G7 finance chiefs agree on Russian oil price cap
KYIV, Sept 4 (Reuters) – A nuclear power plant on the front line of the Ukraine war again lost external power, U.N. inspectors said on Saturday, fuelling fears of disaster while Moscow kept its main gas pipeline to Germany shut to hurt economies of Kyiv’s friends in the West.
The Zaporizhzhia plant, Europe’s largest, had its last remaining main external power line cut off, although a reserve line continued supplying electricity to the grid, the International Atomic Energy Agency (IAEA) said. read more
Only one of the station’s six reactors remained in operation, the agency said in a statement.
Register now for FREE unlimited access to Reuters.com
The plant, seized by Russian troops shortly after their Feb. 24 invasion, has become a focal point of the conflict, with each side blaming the other for nearby shelling.
A standoff over Russian gas and oil exports ramped up last week as Moscow vowed to keep its main gas pipeline to Germany shuttered and G7 countries announced a planned price cap on Russian oil exports.
The energy fight is a fallout from President Vladimir Putin’s six-month invasion of Ukraine, underscoring the deep rift between Moscow and Western nations as Europe steels itself for the cold months ahead.
“Russia is preparing a decisive energy blow on all Europeans for this winter,” Ukrainian President Volodymyr Zelenskiy said in his nightly address on Saturday, citing the Nord Stream 1 pipeline’s continued closure.
Zelenskiy has blamed Russian shelling for an Aug. 25 cutoff, the first Zaporizhzhia was severed from the national grid, which narrowly avoided a radiation leak. That shutdown prompted power cuts across Ukraine, although emergency generators kicked in for vital cooling processes.
Moscow has cited Western sanctions and technical issues for energy disruptions, while European countries have accused Russia of weaponising supplies as part of its military invasion.
NUCLEAR CONCERNS
Kyiv and Moscow have traded accusations about attacks on the Zaporizhzhia plant, which is still operated by Ukrainian staff.
An IAEA mission toured the plant on Thursday and some experts have remained there pending the release of a report by the United Nations nuclear watchdog in coming days. read more
The remaining inspectors noted one reactor was still producing electricity “for cooling and other essential safety functions at the site and for households, factories and others through the grid,” the IAEA said on Saturday.
The plant said in a statement the fifth reactor was switched off “as a result of constant shelling by Russian occupation forces” and that there was “insufficient capacity from the last reserve line to operate two reactors.”
Deteriorating conditions amid the shelling have prompted fears of a radiation disaster that the International Red Cross has said would cause a major humanitarian crisis. read more
Ukraine and the West accuse Russia of storing heavy weapons at the site to discourage Ukraine from firing on it. Russia, which denies the presence of any such weapons there, has resisted international calls to relocate troops and demilitarise the area.
Russia’s defence ministry on Saturday accused Ukrainian forces of mounting a failed attempt to capture the plant. Reuters could not verify the report. read more
Turkey on Saturday also offered to facilitate the situation. read more
GAS AND OIL
Announcing that it would not make a planned restart of gas shipments through the Nord Stream 1 pipeline, one of Russia’s main supply lines to Europe, state-controlled energy giant Gazprom (GAZP.MM) blamed a technical fault.
Gazprom said on Saturday that Germany’s Siemens Energy (ENR1n.DE) was ready to help repair broken equipment but that there was nowhere available to carry out the work. Siemens said it has not been commissioned to carry out maintenance work for the pipeline but it is available. read more
The indefinite delay to restarting Nord Stream 1, which runs under the Baltic Sea to supply Germany and others, deepens Europe’s problems securing fuel for winter as energy prices lead a surge in living costs.
Finance ministers from the Group of Seven wealthy democracies – Britain, Canada, France, Germany, Italy, Japan and the United States – said on Friday the cap on the price of Russian oil aimed to reduce “Russia’s ability to fund its war of aggression whilst limiting the impact of Russia’s war on global energy prices”. read more
The Kremlin said it would stop selling oil to any countries that implemented the cap.
Russia calls its invasion of its neighbour “a special military operation.” Kyiv and the West say it is an unprovoked aggressive war against a former part of the Soviet Union.
The United States and other countries have pledged fresh military aid for Kyiv to fight against an invasion that had killed thousands of people and displaced millions.
Ukraine launched a counteroffensive last week targeting the south, particularly the Kherson region, occupied by Russians early in the conflict.
Register now for FREE unlimited access to Reuters.com
Reporting by Tom Balmforth in Kyiv; Additional reporting by Michael Shields, Ron Popeski and Reuters bureaus; Writing by Susan Heavey and Simon Cameron-Moore; Editing by Nick Zieminski and William Mallard
Our Standards: The Thomson Reuters Trust Principles.