Spanish steelmaker suspends production due to skyrocketing electricity costs
Spain’s Sidenor has suspended production through the end of 2021 due to spiraling energy costs, according to Reuters. A sharp increase in electricity prices made operations financially unviable. Reuters reports:
European energy prices have skyrocketed this year as tight gas supplies collided with a rebound in demand in the wake of the COVID-19 pandemic and increased appetite for carbon-emissions permits.
Sidenor, which produces around 1 million tonnes of long-steel products per year at plants in northern Spain, said the price it pays per megawatt-hour of electricity had risen fourfold in a year, driving up overall production costs by 25%.
“With an impact on production costs of more than 200 euros per tonne it is impossible for Sidenor to maintain its current production rate,” the company said.
Rising energy prices are economically devastating because energy is the invisible ingredient in everything, whether it be goods, services, or steel. Those who advocate for more wind and solar on the grid never account for the number of jobs lost due to higher energy prices in their press releases, but these are very real job losses that destroy real value in the economy.
In Minnesota, we should be wary of plans proposed by Xcel Energy to shut down their coal plants years before their useful lifetime and switch to a combination of unreliable wind and solar, and natural gas backup power.
This is the same electric grid that is producing huge price spikes in Europe, and Minnesota will experience the same problems if we implement the same bad energy policies.