The new energy crisis: the editor-in-chief’s weekly review

Good morning dear readers,

the Handelsblatt energy team has been reporting dramatic figures for days: the price of Brent oil has doubled within a year, the price of gas rose by 130 percent, and that for coal by as much as 342 percent. The figures show: The world is facing a new energy crisis – a crisis that affects almost all economic areas.

• My colleague Dana Heide reports from China about failed traffic lights, closed factories and nationwide power outages. The energy crisis there has long been an obstacle to growth.
• India is experiencing a similar crisis, where the coal supply in many power plants has melted dangerously. Here, too, the government is sounding the alarm.
• In the USA, experts are already predicting an oil price of over $ 100 per barrel.
• And in many European countries, electricity prices are climbing from record to record. Winter has not even started yet.

We have combined all of this research into a large weekend report in which we analyze the new world energy crisis.

From an economic point of view, a dangerous mixture is brewing here. Because it is energy prices that drive inflation rates up month after month. In Germany, consumer prices rose to 4.1 percent in September. The Bundesbank expects rates to move towards five percent this year.

But that was just the beginning. Because the rising CO2 prices will result in even higher energy prices in the coming months and years. Studies show that the price of gasoline alone would have to rise by 70 percent next year in order to still achieve the climate targets of the transport sector. No wonder that the debate about turning back parts of climate policy is already beginning in the EU.

What else has been on our minds this week:

1. After the CDU’s historic defeat in the federal elections, CDU leader Armin Laschet has announced his withdrawal from the party chairmanship. “Today Armin Laschet clears the way for the CDU to start over,” wrote Friedrich Merz on Twitter. But would Merz really be a fresh start? A man of new beginnings, of renewal – especially one who can define what modern conservatism looks like? Doubts are more than appropriate.

2. In parts, the economy has already made its peace with the traffic light and is demanding: better start-up funding, competitive energy prices – as well as the long-running hits, namely investments in digitization, climate protection and the training of skilled workers. The parties keep the content of the negotiations secret. Only this much: “We saw that there is a willingness to take even deep hurdles,” said FDP General Secretary Volker Wissing. Well at least.

3. While our new China correspondent is still waiting for her visa, she and Nicole Bastian, Head of Foreign Affairs, have analyzed the risks of the Chinese economy. Their conclusion: China’s growth success is built on debt. Real estate developer Evergrande’s payment difficulty is just one particularly prominent example of a dangerous development.

“China’s debt problem could have a domino effect and weaken China’s economic strength, with enormous global repercussions,” warns Lisandra Flach from the Ifo Center for Foreign Trade. Germany would be particularly hard hit. Just a few days ago we reported about the dangerous dependence of the German auto industry on China.

4th Many consumers and companies have long since got used to delivery bottlenecks. However, new research caused quite a stir at our editorial conference: my colleague Christoph Schlautmann describes how the supply chain between the North Sea ports and the European hinterland is now threatening to tear. Schlautmann’s tip: buy your Christmas gifts now. Before the festival, there is a threat of higher prices and empty shelves.

5. One of the most read stories from last week is about Aldi and Lidl. This time, however, the focus is not on internal power struggles or market shares – but on garbage. Aldi wants to earn billions with recycled raw materials in the future. In this way, the discounter not only secures access to valuable raw materials, but also attacks its rival Lidl, our corporate department analyzes.

6th Few people have done more for the German technology scene than BMW major shareholder Susanne Klatten. With a lot of commitment she helped, among other things, to set up the highly successful Munich start-up center “UnternehmerTUM”. With a new institution, she now wants to help turn start-ups into the family businesses of tomorrow. The major BMW shareholder wants to digitize medium-sized companies more effectively and network them with founders and scientists via the “FamilienunternehmerTUM” start-up center. Your goals are ambitious: 500 entrepreneurs are to join the start-up center by 2025.

7th For many years I have been dealing with the energy transition – the big plans and the even bigger misjudgments. That is why I was surprised this week by the analysis by my colleague Kathrin Witsch, who writes about the return of the European solar industry. Manufacturers are currently expanding their production facilities and the industry’s business climate index is nearing a new record high. Europe definitely has a chance: because of the better CO2 balance in production and the lower transport costs – because these now make up between ten and 20 percent of the total costs for a Chinese solar module.

8th. And one more piece of good news: One of the greatest absurdities will be done faster than expected – the plug-in hybrid, which makes neither ecological nor economic sense. Because more electric cars are now registered than vehicles with hybrid drives. Car manufacturers like Daimler are reacting and taking the cheat ecos out of the program.

9. Many dream of writing their own book. How do you do that? Our literature team discussed this with some successful authors. The result is a seven-point program that is well worth reading. And what were the books of the year in your opinion? Please write to me [email protected]. We will publish a list of your favorites in the next few weeks.

Reading, I now say goodbye on vacation. Have a nice weekend to all of you.

Sincerely,
you

Sebastian Matthes
Editor-in-chief Handelsblatt

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