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Austria to convert coal power plant as Russian reduces gas deliveries

Austria will convert its Mellach power plant in Styria to run on coal instead of natural gas in case of an emergency.

Austria to convert coal power plant as Russian reduces gas deliveries
A photo shows cooling towers of the hard coal-fired power plant Scholven operated by the German energy group Uniper in Gelsenkirchen, western Germany on April 29, 2022. Austria has shut down all its coal plants in 2020. (Photo by Ina FASSBENDER / AFP)

On Sunday, Austria’s federal government announced it cut a deal with energy group Verbund and will convert the Mellach power plant in Styria to run on coal.

The announcement comes as Russia has delivered only half as much gas as promised in the past few days. Austria gets 80 percent of its supply from Moscow and has been looking for alternative sources since the war in Ukraine.

Mellach was Austria’s last coal-fired power plant until it was converted into a gas-sourced plant and put on stand-by in 2020.

READ ALSO: What is Austria’s emergency plan if Russia cuts gas supply?

The decision to convert it back to coal two years after the country celebrated its coal phase-out was taken by a crisis cabinet led by chancellor Karl Nehammer.

“The most important thing is that the acute gas demand can be met, and we can create gas supplies for the winter,” Nehammer said. Currently, gas storage facilities are filled at 39 percent, but should be at 80 percent by October to be ready for the heating season.

The plant operator said it would need time to make necessary changes to Mellach and purchase the required coal for combustion.

The goal is to have operations ready so that the power plant can be used in a few months, if necessary, the Ministry of Energy told Der Standard.

In the long run, though, Austria intends to reduce its dependence on Russia, which will take years, Energy Minister Leonore Gewessl said.

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COST OF LIVING

Cost of living: Austria’s postal service announces prices increases

Prices in Austria continue to rise and, this time, mailing letters and parcels will become more expensive. Here is what you need to know.

Cost of living: Austria's postal service announces prices increases

Austria’s postal service Post said business is “difficult” due to “inflation and uncertainty in the energy market”, stating that the package volume has decreased while their operation costs went up.

The state company’s answer to the challenging scenario is to increase parcel prices, and the changes will be valid starting in October.

Starting on October 1st, prices for posting S letters will go up from €0.85 to €1, M letters from €1.35 to €1.40, S packages from €2.75 to €3 and M packages from €4.30 to €4.50.

READ ALSO: Cost of living: Why are petrol prices in Austria still so high?

“The first six months of 2022 posed major challenges for companies, especially in Europe”, Post said, stating that the “COVID-19 pandemic, its countermeasures and the resulting delays in the global value chain were the starting point for what is now a worldwide inflationary trend.”

“The war in Ukraine has exacerbated the price increases for important raw materials and energy sources. These conditions will continue in the second half of the year. There is also a risk that the energy market will remain difficult to predict and gas supplies in parts of Europe will not be secure.”

Rising inflation and staff shortages

Inflation has been rising in Austria, reaching 9.2% in July, with essential items becoming increasingly more expensive.

READ ALSO: Inflation at 9.2% in July: How to beat rising prices in Austria

So far, the wave of inflation has affected chiefly energy and food prices but has now also arrived in the gastronomy sector, with increasing costs in bars and restaurants across the country.

However, as fuel and energy prices soar, people in Austria will see increases in all sectors, including postage services.

Another major challenge in the Austrian economy is labour shortage – and Post is now having difficulty finding new employees, especially drivers and workers for its distribution centres.

READ ALSO: Five of the biggest challenges facing Austria right now

“We have virtually full employment”, Post CEO Georg Pölzl told the daily Der Standard. He said that the company could immediately hire 1,000 people – if they were able to find the workers.

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