The occasional power outage, a possibility announced in many European media, will illuminate new difficulties for entrepreneurs and further hinder the economy. If the folk saying that ‘one misfortune never comes alone’ comes true, the high energy prices are fueled by the fear that there will not be enough electricity.
In the economically strongest European country, Germany, the possibility of electricity reduction has been taken seriously, and the Federal Office for Civil Protection and Disaster Assistance advised citizens to stock up on food and drink sufficient for ten days. The German Association of Cities and Municipalities joined in by publishing a list of food items, primarily canned goods, as well as eggs and powdered milk, which have a shelf life of several years. The list also includes chocolate, honey, dry cookies, pretzels, nuts… Overloading the electrical grid could occur if gas runs out, for which the Germans have also prepared by purchasing 650,000 heaters this year, the use of which would increase electricity consumption and cause supply interruptions. Some German companies have already started saving electricity; for example, the retail chain Aldi has shortened its working hours by one hour… However, the European Central Bank preempted all others with a recommendation to banks to test their resilience to multi-hour electricity reductions. Even before that instruction, banks were prepared for electrical shocks; for instance, Erste Bank in Croatia can operate for up to ten hours on its own energy supply.
Who Finds It Funny
However, it should be noted that Croats are not meticulous Germans. We do not read instructions longer than two sentences, we do not trust the government, the media, or anyone – but we have an advantage because we have experience with shortages in both the former and current state. We have survived everything and – ‘even laughed’, as Croatian journalist and writer Slavenka Drakulić wrote in her book ‘How We Survived Communism and Even Laughed’.
Foreign companies operating in Croatia, however, have not succumbed to the domestic mentality and have taken the energy crisis seriously. The retail chain Spar has started saving electricity this autumn, turning on only one-third of the lights, otherwise energy-efficient LED lighting, before opening and after closing stores while employees prepare and tidy up the goods. Additionally, Spar and Interspar will turn on their illuminated advertisements, logos, entrance doors, parking lot lighting, and all external store lighting half an hour before opening and turn them off half an hour after closing. By reducing lighting usage, Spar will save 280,000 kWh, which is the amount of electricity consumed annually by eighty Croatian households.
But the real question is what about those who cannot, specifically companies whose activities are strategically important? For example, one of Croatia’s largest exporters, Pliva, operates in the strategically important pharmaceutical industry and cannot halt complete production for several hours.
Critical Drug Production
The possibility of continuous production for the pharmaceutical industry has additional sensitivity because millions of patients worldwide depend on its uninterrupted functioning. Production processes in the pharmaceutical industry are complex, sensitive to small deviations, and cannot be interrupted during the day or at other regular intervals; otherwise, they cannot meet good manufacturing practice rules.
– At our production sites, we have secured backup power sources such as diesel generators and UPS (uninterruptible power supply), but their role is primarily focused on maintaining the operation of critical, mostly safety systems, and preserving critical data in accordance with good manufacturing practice. Complete replacement of stable power supply with electricity for the purpose of continuous production and other business processes is not possible. At the same time, the problem is that due to the significant spike in energy prices, the supply of some products may be jeopardized. While all our suppliers are raising their prices, our sector cannot adjust product prices. We operate in a highly regulated market where the prices of prescription drugs are determined by national pricing and reimbursement authorities and are subject to automatic price reduction measures known as reference prices. Continuous pressure to lower our product prices, coupled with rising inflation, raw material prices increasing by up to 160%, energy prices rising by up to 300%, and transportation costs that can peak at a 500% increase, jeopardizes the sustainability of the production of some drugs – say Pliva.
