Good morning. David Meyer here in Berlin, filling in for Alan.
Last week, I wrote about the European heatwave, with a focus on the U.K. But there’s a mind-blowing detail that only just came to light.
As reported this morning by Bloomberg, London avoided blackouts last week by briefly paying an astonishing $11,700 per megawatt hour—over 5,000% more than the regular spot price—for electricity sent over from Belgium.
There are two underlying problems here. The first is the climate emergency, with the extreme weather it increasingly generates. The other is underinvestment in the power grid—which is far from being a particularly British issue.
For this South African, it feels like developing-nation problems are starting to cross over into the more industrialized world—though there’s a heck of a way to go yet.
Back home, the state power utility Eskom operates a rickety grid that makes rolling “load shedding” blackouts a daily reality. There, it is pretty much essential to install an unofficial app on your phone (EskomSePush: a quite amusing name that I sadly cannot explain in a family-friendly newsletter; rest assured it’s not flattering to Eskom) that informs you of the timing and severity of your area’s scheduled blackouts. Eskom’s near-failure weighs very heavily on the South African economy and its public debt.
Europe obviously isn’t anywhere near that sort of crisis, but recent events have shown it is not immune.
Russia may not have realized Europe’s worst energy fears by turning off its gas supplies entirely, but the artificial constraints it is imposing on those flows have already forced the German government to bail out local energy giant Uniper, to the tune of $15 billion. And a more serious disruption could yet come; Greece is the latest country to unveil a contingency plan for that eventuality that would include rolling blackouts in the worst case.
Again, Europe’s power grids aren’t about to fall apart. But the days of taking electricity for granted 24/7 may be numbered.
More news below.
The Volkswagen Group’s board ousted CEO Herbert Diess on Friday. Elon Musk’s Austrian frenemy clashed with unions—and, being German, VW’s board is half controlled by organized labor. Porsche boss Oliver Blume is the new boss, with a less combative management style. Fortune
Those who doubt the effect of sanctions and business withdrawals on the Russian economy should think again, Yale’s Jeffrey Sonnenfeld and Steve Tian write in an interesting piece for Foreign Policy. “Business retreats and sanctions are crushing the Russian economy in the short term and the long term,” they write, before debunking “nine widely held but misleading myths about Russia’s supposed economic resilience.” Foreign Policy
Tesla opens up
Tesla is applying for public funding that will require it to open up its U.S. Supercharger network to drivers of other vehicles. This is something the company was already planning to do—it’s supposedly going to start producing the necessary Supercharger equipment by the end of this year. Wall Street Journal
AROUND THE WATERCOOLER
Falling home prices? This interactive map shows the statistical odds of it occurring in your local housing market, by Lance Lambert
Yellen says signs of U.S. recession aren’t in sight ‘when you’re creating almost 400,000 jobs a month’, by Bloomberg
China’s answer to Boeing’s 737 is finally, almost ready for take-off, by Grady McGregor
Climate deniers are like the Uvalde police ‘waiting outside an unlocked door while the children were being massacred,’ Al Gore says, by Erin Prater
Monkeypox outbreak a global public health emergency, World Health Organization director-general declares, by Erin Prater
This edition of CEO Daily was edited by David Meyer.
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