Faced with very expensive energy, companies stopped production

The next few months will be tough for Aluminum Dunkerque. The largest main aluminum smelter in the European Union and the main French industrial site in terms of electricity consumption (4 TWh) will soon reduce its production by 20%, due to the increase in oil prices. At the end of last year, it was reduced to 15%. “In September 2021, our electricity bill was 17 million euros. This month, it should exceed 45 million, or half of our production costs,” explained its president, Guillaume de Goÿs.

True, the company benefits from the Arenh system, nuclear electricity sold at cost price to EDF, which represents 75% of its electricity supply, but that is no longer enough. Like many other manufacturers, the boss of Aluminum Dunkerque has to buy the necessary supplement in the wholesale market. However, for delivery in the first quarter of 2023, a megawatt hour (MWh) currently costs €1,150, compared to €70 to €80 in 2019.

“We don’t pass our costs on to our customers, if they don’t go elsewhere, advocates Guillaume de Goÿs. Imports of primary aluminum have increased significantly, from Iceland, Norway and the Middle East. We even see some coming from India, Indonesia and Australia, which have a bad carbon footprint. » Clearly, less production in Europe, but more pollution on a planetary scale.

Switch to oil to save gas

This is what should be feared after ArcelorMittal announced, Friday, September 2, that it will stop two of its blast furnaces, in Bremen (Germany) and Gijon (Spain). “The cost of gas and electricity is a heavy weight on our competitiveness”, ensures the group. In France, steel production has slowed significantly. “In fertilizers, 70% of production capacity is closed. And imports are increasing, especially from the United States and the Maghreb,” assured Magali Smets, the general manager of the France Chimie federation.

The glass makers are also in great difficulty. Duralex, based in Loiret, will put its oven on standby for at least four months from November and 250 employees will be put on partial unemployment. “Limiting our energy consumption allows us to preserve activity and work”, assures the president of Duralex, José-Luis Llacuna.

The same scenario shaped the crystal factory in Arques (Pas-de-Calais), where the first drastic measures were taken. “We have decided to put the company in wintering mode”, explains its communications director, Guillaume Rabel-Suquet. Already, employees working in support functions, i.e. 1,600 people out of 4,600, have been placed on partial unemployment two days a week since 1er September and until December. “But for production, it is likely that we will also resort to partial activity during the winter,” warned Guillaume Rabel-Suquet.

The glassmaker saw its gas bill go from 19 million euros last year to 75 million this year and said it was forced to act as soon as possible. In some furnaces, maintenance will be extended to be effective this winter, to save energy. At the same time, some ovens will be made with fuel oil to limit the purchase of gas.

SMEs can no longer find an electricity supplier

No sector today is spared from the violence of this rapid conversion. “We do not rule out stopping the operation of some quarries, or even moving the activity to the night when electricity is cheaper”, said Xavier Breffeil, Deputy Purchasing Manager of Basaltes, one of the independent aggregates groups in France.

For many SMEs, apart from the price, the problem is also finding electricity for next year. “Many suppliers are withdrawing from the market because they have trouble finding themselves. They don’t want new customers and are afraid of not being paid,” explained Charlie Évrard, director of My energy broker.

“If nothing is done, the situation will be dramatic,” confirmed Frank Roubanovitch, the president of Cleee, an association of large industrial and tertiary consumers of gas and electricity. The director general of France Chimie, Magali Smets, asked the State for exceptional support, as has been done for individuals.

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State support

Companies affected by the consequences of the war in Ukraine – especially the increase in energy prices – will benefit from the partial scheme of the activity, which opens the payment to the State in part of the salary.

The government also released an envelope of 3 billion euros to support companies most exposed to the energy crisis. But the device, too complicated, discouraged requests and only €500,000 was given. The Minister of Economy, Bruno Le Maire, promised to simplify the system.

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