Faced with too expensive energy, companies stop producing

Faced with too expensive energy, companies stop producing

The next few months are going to be difficult for Aluminum Dunkerque. The largest primary aluminum smelter in the European Union and the leading French industrial site in terms of electricity consumption (4 TWh) could soon reduce its production by 20%, due to soaring energy prices. At the end of last year, it had been lowered by 15%. “In September 2021, our electricity bill was 17 million euros. This month, it should exceed 45 million, or half of our production costs,” explains its president, Guillaume de Goÿs.

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

“We cannot pass our costs on to our customers, otherwise they will go elsewhere, emphasizes Guillaume de Goÿs. Imports of primary aluminum have already increased sharply, from Iceland, Norway and the Middle East. We even see some arriving from India, Indonesia and Australia, with a poor carbon footprint. » Clearly, less production in Europe, but more pollution on a planetary scale.

Switch to oil to save gas

This is also what is to be feared after the announcement of ArcelorMittal, Friday, September 2, to stop two of its blast furnaces, in Bremen (Germany) and Gijon (Spain). “The costs of gas and electricity weigh heavily on our competitiveness”, ensures the group. In France, steel production has already been significantly slowed down. “In fertilizers, 70% of production capacity is shut down. And imports are increasing, especially from the United States and the Maghreb,” assures Magali Smets, the general manager of the France Chimie federation.

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

The same scenario is taking shape at the crystal factory in Arques (Pas-de-Calais), where the first drastic measures have just been 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,” warns Guillaume Rabel-Suquet.

The glassmaker has seen its gas bill go from 19 million euros last year to 75 million this year and says it is forced to react as quickly as possible. On some ovens, maintenance will be brought forward to be effective this winter, in order to save energy. At the same time, other ovens will be converted to fuel oil to limit gas purchases.

SMEs can no longer find electricity suppliers

No sector is today spared from the violence of this energy shock. “We do not rule out stopping the operation of certain quarries, or even shifting activity to night when electricity is cheaper”, says Xavier Breffeil, Deputy Purchasing Manager at Basaltes, one of France’s independent aggregates groups.

For many SMEs, in addition to the price, the problem is also to find electricity for next year. “A lot of suppliers are pulling out of the market because they are having trouble sourcing themselves. They don’t want new customers and are afraid of not getting paid,” explains Charlie Évrard, director of My energy broker.

“If nothing is done, the situation will be dramatic,” affirms 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, is asking the State for exceptional support, like what has been done for individuals.


State support

Companies affected by the consequences of the war in Ukraine – in particular the rise in energy prices – can benefit from the partial activity scheme, which opens up the assumption by the State of part of the remuneration of employees on leave.

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


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