WILL PUTINS WAR SPEED UP EUROPES TRANSITION TO RENEWABLES.

As the war drags through the winter, Europe is facing up to a future without any Russian gas. That is a problem for industrial companies who have relied on plentiful supplies of cheap gas delivered through pipelines from Russia. Experts warn that the likes of Germany and Italy will lose out to factories elsewhere as their competitiveness is hurt, not least by the US. The business model that has been the backbone of Europe’s industrial heartlands may have been broken by the Kremlin. We assume energy prices remain high for at least the next year and actually also going into 2024. Then we have the entire energy transition going on, which I think in the first stage will also come at higher energy prices and only once there is the shift made towards more renewables, energy prices will drop again. But some are optimistic that substitutes and a massive efficiency drive can offer hope after a tough transition. In addition, companies are trying to shorten supply chains and move production away from regimes that risk being caught up in geopolitical tensions, this is likely to be more than offset by the de-industralisation trend.

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