The logo of French tire maker Michelin is seen on a Formula E racing car in Rome, Italy May 17, 2016. REUTERS/Alessandro Bianchi//File Photo
Sign up now for FREE unlimited access to Reuters.com
I am registering
AIX-EN-PROVENCE, France, July 10 (Reuters) – French energy companies are ramping up contingency plans and converting their gas boilers to run on oil as they seek to avoid disruption in case it leads to further reduction of Russian gas supplies to the point of blackout.
Gathered over the weekend at a business and economic conference in southern France, several senior executives said they were preparing for possible blackouts.
“What we have done is we have converted our boilers so that they can run on gas or oil and we can even switch to coal if necessary,” said Michelin boss Florent Menego (MICP. PA), a from the world’s leading tire manufacturers.
Sign up now for FREE unlimited access to Reuters.com
I am registering
“The aim is to avoid plant closures in case we face a shortage,” he added, saying that while gas shortages in Europe were likely, oil would still be available as an alternative.
It takes days to start producing tires in a manufacturing plant, Menego said, making it essential to maintain a stable energy supply.
In June, Russia cut flows through the Nord Stream 1 pipeline, its main gas transport route to Western Europe, to 40% of capacity. Politicians and industry are concerned that there will be further supply restrictions linked to Russia’s invasion of Ukraine, which Moscow describes as a “special military operation”.
Across Europe, industry is turning to more polluting fuels than gas as it prioritizes dealing with the cost to the economy of business disruption and a spike in energy prices over longer-term goals of moving to a zero-carbon fuel.
French Finance Minister Bruno Le Maire told senior corporate executives attending the conference that it would be irresponsible not to prepare for a shortfall.
“Let’s prepare to cut off Russian gas,” he told them. “Today, this is the most likely scenario.
France relies on nuclear power for about 70% of its electricity, meaning it is far less directly dependent on Russian gas than neighboring Germany.
However, state-controlled power producer EDF ( EDF.PA ) is struggling to meet France’s needs due to outages at aging power plants, increasing pressure on the rest of the energy sector.
Power production at 29 of the 56 nuclear reactors has been shut down for inspections and repairs.
The French government is checking every company which of them depends on an uninterrupted energy supply.
He also tried to cushion the impact of a spike in energy prices by capping retail gas and electricity prices until the end of the year, which helped keep inflation in France among the lowest in Europe.
The chairman of another major industrial company, who spoke on condition of anonymity, told Reuters on the sidelines of the conference that he believed all major businesses were looking at switching to oil.
Automaker Stellantis ( STLA.MI ) is weighing options for producing its own power in the event of an energy crisis, Chief Executive Carlos Tavares said at a French factory last month.
These include building your own power plant or investing in an existing one to provide part of the production.
Poland’s former energy minister Michal Kurtyka, whose country relies on coal for 70% of its energy, told conference leaders that Europe was headed for a “perfect storm” this winter.
Sign up now for FREE unlimited access to Reuters.com
I am registering
Reporting by Mathieu Rosemain; edited by Barbara Lewis
Our standards: The Thomson Reuters Trust Principles.
Add Comment