Evangelos Mytilineos Speech at the London School of Economics alumni event: Energy security and the future of Europe amid a series of constant crises

Dear Ambassador,

Dear President of the LSE Alumni,

Dear friends,

Allow me also to say ‘dear fellow students’, since quite a few of us here today have graduated from the LSE.

Thank you warmly for this award and your honorary invitation to be the keynote speaker in our event today.

People always feels moved when being awarded.

I have to confess that I usually do not participate in such awarding ceremonies because I harbor some kind of shyness, but the LSE holds a special place in my heart and in my career.

And I am grateful for the so many very useful things it offered me. Not only in terms of knowledge, but also in terms of how I perceive the world; therefore, it affected the way I am thinking, the way I have acted and also my career path.

This path brings me here today, before you, to discuss a very interesting and topical issue:

Energy security and the future of Europe amid a series of constant crises.

But it does not only emerge right on time. It also requires the duty to speak the truth and say things that are not at all pleasant.

I believe that these crises must serve as the springboard to invite us all, politicians, entrepreneurs, and ordinary citizens, to act.

Otherwise, I fear that in the near future we will not just have to be confronted with more difficult problems than the current ones,

but also, the solutions will be more painful; in addition, societies will also be more unprepared, with all the risks this latter may entail.

I have recently been invited to speak publicly at the Cycle of Ideas Forum.

I was surprised to see how my contribution impressed the general public on things that I consider to be common knowledge, as we would say during the years of our studies.

I wouldn't like to make you feel tired, repeating them. 

However, I would like to briefly mention some of them:

• The energy crisis did not emerge when the war broke out in Ukraine and will not end when the war ends
• It started when Europe and the rest of the world decided to abandon the use of fossil fuels, creating disincentives such as a reduction in lending
• Particularly ambitious targets regarding the use of RES were set to combat climate change and incentives were granted to increase the use of products such as electric cars that required higher electricity consumption
• With the decline of the pandemic, economic activity recovered and returned to normal, with much higher demand, both due to the lack of products due to the lockdowns and due to increased energy consumption resulting from increased demand for energy for manufacturing
• All this was happening while fossil-fuel power plants were abandoned, and no infrastructure was created for the new environment, which we had already set as an objective, such as networks that could transfer this energy or energy storage infrastructure.
• We must not forget the conditions that had already increased prices since last winter:
  • The political crisis in Germany following the emergence of the greens as partners in the government with the Socialists
  • The harsh winter that has increased demand across Europe for natural gas
  • The fact that France could not use nuclear power because its plants were out of operation,
  • combined with the non-stochastic nature of wind farms and the limited sunshine in Northern Europe
• The war in Ukraine was added to this perfect storm
• All this - ultimately - affects the fully interconnected European energy system we have today, with the leading Energy Exchange in the Netherlands, where the natural gas prices have skyrocketed.

I have tried to be brief, but at the same time I want to recall several of the causes, so that the multi-faceted energy problem becomes fully understood.

The most important thing though is to fully understand how urgent it is to speak frankly about the energy crisis, to get down to the problems and, above all, to start finding solutions.

The climate crisis targets are ambitious. And it is now imperative that we do something.

After all, I am one of the first entrepreneurs to have invested in this direction.

We have an enormous investment program, of EUR 600 million, under way, and it stretches across a wide range of such investments, significantly reducing carbon dioxide emissions:

• Construction of PV worldwide, on all five continents:
  The total capacity of our mature international portfolio is 2,396 MW and includes a number of projects at various stages of development with a capacity of around 3,7 GW.
• Waste to energy projects like what we do in Great Britain, owned by Covanta, the Green Investment Group and Biffa, part of a wider development of an energy and resources technology hub, known as Protos, owned by Peel L&P Environmental, near Manchester, in Cheshire, with a capacity of 400,000 tons of non-recyclable waste per year, to be completed in 2023 and be put into commercial operation in 2024. I would like to give you a tour at some point
• Investments for green alumina, which is the future for the largest in demand metal, especially for the energy transition, since batteries, PV panels, wind turbines are manufactured by it.
• In Great Britain, we have, of course, also developed three open-cycle gas turbines (OCGT) in the United Kingdom. We have signed contracts with three subsidiaries of Drax Group plc, the largest RES-derived electricity producer in the United Kingdom, namely Hirwaun Power Limited, Progress Power Limited and Millbrook Power Limited for the construction of 3 OCGTs with a power of approximately 299 MW each.

However, if we are to achieve green growth, growth is a prerequisite; it is also necessary for people to have survived the successive economic crises, the looming global recession and inflation.

That is why it is imperative to see what is happening on our continent as a whole, in order to cope with the situation.

I say a continent, because although Great Britain is no longer a Member of the European Economic and Monetary Union, it is a key factor in the wider European family.

Ties remain, economic and trade transactions are in place, co-operation, and investments as well.

However, I come back to the energy crisis, which is our main topic, and which touches on the full range of human activity in society and economy.

With regard to society:

Already the very high electricity prices make bills insurmountable.

In Greece, we are lucky, because the Greek Government soon took care of the establishment of a mechanism, whereby a windfall tax was levied on the electricity producers and windfall profits were funneled back to the households' electricity bills.

We, as a company, over the last 4 months (July, August, September and so far in October) have uncomplainingly given back 100 million in order to support households.

I certainly do not know until when this mechanism will be fiscally sustainable, but it was an important injection for citizens, so that they are not encumbered with the actual bill that would otherwise be 4 and 5 times higher than usual.

I will now shift to the issue of economy and industry.

The energy cost increase has created a very challenging situation in the functioning of European industry.

The fact that the European Union adopted a plan for the sudden abandonment of fossil fuels, without intermediate stages and infrastructure, led to tremendous disincentives for European industry, which has gradually started to leave the European continent, under the threat of energy security besides the energy costs.

Currently, MYTILINEOS owns one of the few aluminum smelters in Europe, the metal we mentioned earlier as being so important for the energy transition.

All the other metals have gradually left the Old Continent for countries where no high CO2 and energy costs are entailed.

Europe therefore pushed for sustainability and green transition policies, without assessing whether European economies and societies could afford them.

We have not attached the importance required on the security of supply, and now both Europe at institutional level and its societies are in distress and at risk.

At the moment, therefore, the existence of European industry, together with its jobs is under threat.

I would just like to dwell on a few figures:

In Europe, the European non-ferrous metals industry posts an annual turnover of over €120 billion, with over 47 million tons of annual production.

With 500,000 direct and 3 million indirect employees.

Metals provide European innovation and a wide range of other industries, basic materials for investments in research and development.

Due to their resilience, they can be reused and multiply their value in the European economy.

Europe is currently re-using: 90% of metals from building constructions, 90% of metals from the transport sector and 60% of metals from recycled packaging

And a few matching figures for Greece:

• 3,000 small and large enterprises operate in the aluminum business, employing more than 30,000 employees.
• It is the third most exports-oriented sector of the Greek economy, with an export value exceeding EUR 2 billion, representing 5.4% of the total exports of the country and the second with the best positive trade balance, amounting to EUR 820 million.
• One understands the contribution of this sector to the current account balance if we consider the deficit of EUR 10.6 billion posted in 2021.

It is not reinventing the wheel if we highlight that wishful thinking and good intentions alone shall not lead us to our target, unless security of supply and competitive energy prices figure as an equal priority to Green Transition. Nor is it reinventing the wheel to stress that the people and the economy need energy at affordable prices to live in dignity.

Unfortunately, I am afraid that these self-evident findings have not yet been understood in Europe. 

And today, with gas hitting record highs, in Brussels, we are discussing how the economy will go green!

No one has told citizens about the cost of climate change, and if they had been informed, it is not at all certain they would agree with it.

I, personally, and I believe all my colleagues who have the responsibility of maintaining jobs and growth, do not agree either.

Moreover, we have not been asked, at institutional level, which I think was an obvious obligation on behalf of the competent European institutions.

It is true that a more balanced and holistic approach is needed to meet not only the needs of society and the economy but also to safeguard Europe's strategic autonomy.

The failure to deal with such serious issues in a timely and realistic manner has certainly had the negative effect of finding ourselves at this current state of play where the European Commission, the national governments, huge companies, but also citizens, sustain very serious damage and a European solution is being sought after while Member States adopt all kinds of different national measures, putting at risk the very foundations of the internal energy market.

It was just recently, last week when I took over as Chairman of Eurometaux, the European Association representing the non-ferrous metal industry. Its members are colossal companies from all over Europe – such as Alcoa, Glencore, Hydro, Rio Tinto – Industrial chambers of Member States of the European Union, as well as associations representing similar and equally important industrial sectors, such as the European Aluminum.

From my short stay in Brussels and based on the contacts I had, it became clear to me how rigid our Union has become; from a solidarity body, it turned into a field of compromises, mainly symbolic compromises, not having an impact on real society and economy.

Without a solution appearing on the horizon, to a large extent, Brussels seems to pursue a number of initiatives, as if it were "business as usual".

I do not intend to be part of this approach.

I intend to use my term of office to grasp the nettle and to make our positions and proposals be dynamically voiced so that the European industry takes the lead anew.

So, at the point we stand now, having confronted reality face to face, our duty is to try and realistically cope with this calamitous crisis, wake up and take action.

Before we vanish into thin air. I didn't mean to sound unpleasant or pessimistic. I am convinced, however, that because the energy crisis will be with us for a long time, we must be immediate and effective in mitigating its impact, for the benefit of people, societies, and economies.

Thank you.