FirstFT: Germany reopens coal plants to avoid gas shortage as Russia cuts supply
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The German government said yesterday it would pass emergency laws to reopen mothballed coal-fired power stations for power generation and auction gas supplies to industry to incentivize companies to reduce their consumption.
The move illustrated the depth of concern in Berlin over possible gas shortages in the winter months, as Russian gas export cuts threaten shortages in Europe’s biggest economy.
“It’s bitter, but in this situation it is essential to reduce the use of gas,” said German Economy Minister Robert Habeck, a member of the Greens party. The plan is at odds with Germany’s climate policy, which aims to phase out coal by 2030 because it is far more carbon intensive than gas.
Russia slashed the capacity of the main gas export pipeline to Germany by 60% last week, causing repercussions across the continent as Western officials believe Moscow was arming its gas exports in response to sanctions. the EU following the large-scale invasion of Ukraine.
Italy, which has also seen gas supplies plummet from Russia, is expected to announce emergency measures in the coming days if supplies are not restored.
Habeck said Berlin was working on a new law to temporarily bring back up to 10 gigawatts of idle coal-fired power plants for up to two years; this would increase Germany’s dependence on coal for power generation by up to a third.
“The situation is serious,” Habeck said. “It’s obviously Putin’s strategy to upset us, drive up prices and divide us. . . We will not allow this to happen.
Thanks for reading FirstFT Asia, and we hope you have a great week. Here is the rest of the news from the day. — Sophie
Five other stories in the news
1. US lawmakers ask for more money to counter China in the Indo-Pacific The US House of Representatives will introduce the “Indo-Pacific Engagement Act” to incentivize the White House to funnel more money to the Indo-Pacific region. Lawmakers aim to narrow the gap between the rhetoric that Asia is the priority region and funding levels.
2. Crypto Industry Braces For Fallout After Weekend Crash Bitcoin fell to $17,628 on Saturday before bouncing back. This has contributed to an escalating credit crunch in the digital asset industry that threatens to engulf many of its key players.
3. EU and India to restart trade talks after a decade apart To steer New Delhi away from its historical ties with Russia, the EU will start talks with India at the end of June for agreements on trade, investment protection and other specific regional products. The target timeline is for the deal to be signed by the end of 2023.
4. Japan’s largest discount store, Daiso, beleaguered by falling yen Seiji Yano, the chairman of Daiso Industries, has pledged to defend the chain’s price of ¥100 ($0.75) per item despite an existential threat to the company from global inflation and the falling market. yen. In his very first media interview, he said the store is reviewing its product line to ensure its survival.
Go further: The Bank of Japan kept its main policy rate at minus 0.1% last week, putting it at odds with other central banks that have raised interest rates to tame inflation.
5. China launches new aircraft carrier China has launched its most advanced aircraft carrier yet as Beijing races to catch up with US military capabilities and follow through on its threats to retake Taiwan by force if necessary. The vessel, named Fujian after the coastal province opposite Taiwan, had been under construction at Shanghai’s Jiangnan Shipyard since 2018.
The day ahead
World Air Transport Summit The International Air Transport Association continues its summit today in Doha, Qatar, and will release IATA’s annual report.
June 19 The United States observes a federal holiday today to commemorate the end of legal slavery for black Americans.
Economic data Germany is releasing its May Producer Price Index (PPI) figures today, and the UK will release trade figures, the Rightmove monthly house price index as well as data from the UK. ‘Office for National Statistics on Housing Affordability.
India Australian Defense Minister Richard Marles is visiting India, continuing new Prime Minister Anthony Albanese’s emphasis on closer relations with the subcontinent to counter China.
What else we read
Chinese tourists struggle to overcome Covid travel hurdles While the rest of the country remains wary, people in Beijing and Shanghai have emerged from strict lockdowns. Tourists who tentatively begin moving around the country face a patchwork of local quarantine regulations that in some cases require seven-day quarantines before travelers can begin their vacations.
Related: Chinese consumers are expected to spend $5.2 billion on camping gear this year as city dwellers take to the wild for getaway adventures.
Why pay raises for your company’s ‘flight risks’ can backfire The bosses are doing their best to give money and promotions to resignation candidates to convince them to stay, but the Great Resignation has complicated this practice of counter-offering.
Ransomware Gangs Target Japan as Feeding Ground The United States and Europe have long been prime targets for ransomware attackers. But now one of Japan’s strongest natural defenses – its language – is rapidly evaporating with the help of AI translation software that helps criminals craft traps that seem more plausible and legitimate.
How to Escape the Great Innovation Stagnation With soaring inflation and declining research productivity, ideas have become more expensive to find. Spending more on R&D will not solve the productivity problem — the pressing problem is to improve the scientific process. The answer may lie in accelerating remote collaboration.
Men must intervene at home to increase birth rates When we talk about how to deal with declining birth rates, the conversation usually focuses on young women. But a more successful political target might actually be men. With career versus family no longer such a trade-off for women, “having it all” is only possible with increased paternal custody, writes John Burn-Murdoch.
The pandemic has accelerated the trend towards mini motorhomes. While smaller motorhomes lose kitchens and toilets, they are easier to drive, park and maneuver, opening up a whole new world of adventure.
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