European Businesses Attempt to Ease Energy Crisis Strain

Europe Energy Crisis

(Credit: Pixabay)

by | Oct 21, 2022

Europe Energy Crisis

(Credit: Pixabay)

A grocery store chain in Germany is reducing its hours as one way to reduce energy consumption and costs, highlighting the pressure retailers and other industries face as the result of an ongoing energy crunch in Europe.

The reduction in hours mostly impacts Aldi Nord stores in Germany, where it will begin closing shop at 8 p.m. in November, an hour earlier than most of its operations. The retailer, which has more than 2,000 stores in Germany, didn’t offer many specifics but says it will be at least for the winter months.

It comes as Europe is facing an energy crunch, that is further impacted by the war in Ukraine and the gas supply from Russia being cut off. Somewhere around 40% of the gas used for electricity in Europe comes from Russia.

European Union leaders are meeting in Brussels this week to address energy concerns. The EU has been trying to come up with energy solutions for more than a year, which include increasing the use of renewable energy among other options.

Ways the EU is looking to conserve energy include developing an EU Energy Platform with the goal of pooling demand, coordinating infrastructure use, negotiating with international partners, and studying gas and hydrogen purchases. Earlier this year 27 members of the EU agreed to a voluntary 15% reduction in gas through the winter.

How is the energy crisis impacting retailers and communities throughout the region?

French company LVMH is turning off lights between 10 p.m. and 7 a.m. and adjusting the indoor temperatures of its industrial sites. LVMH says the efforts will result in a 10% energy reduction through October 2023.

In Paris, the Eiffel Tower’s lights are being shut off an hour earlier, which the Guardian says will cut the city’s energy costs by 4%, and Milan has turned off fountains. Throughout Germany streetlights and monuments are being shut off to conserve energy for the winter months, which are when energy use can be at its highest.

The European Fresh Producer Association is asking leaders to minimize the impacts of energy cuts in order to limit the strain on the fresh food sector. The group says the industry’s costs have risen from 15% to 20%, including nearly $6.7 billion in energy use. The industry requires energy-intensive elements such as cold storage. French supermarket E. Leclerc recently installed a refrigeration system to help it curb energy use and reduce emissions.

According to Internet Retailing, as many as 50% of retailers could face losing their businesses without support to reduce the impact of energy costs. Economist Intelligence reports that Europe could lose its competitiveness due to the energy crisis and energy-intensive industries like chemicals, steel, and manufacturing face significant slowdowns.

The energy industry is impacted as well, and BloombergNEF recently released a report on Poland’s Belchatow power plant and its need to accelerate a transition to clean energy technology in part because of the energy crunch in Europe.

As for Aldi Nord, the company didn’t say exactly which stores would be affected by the energy-saving move, but the new hours will begin on Nov. 1 and last through at least the winter months. The company has stores in nine European countries, and the decision comes as other supermarkets, especially with their energy-intensive needs, consider similar changes.

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