Various factors indicate that Europe’s grids need a massive overhaul

International News via Reuters:

The European electricity transmission system operator’s (TSO) investment plans to upgrade and expand power grids over the next five years face a 250 billion euro ($293 billion) shortfall, a report by Boston Consulting Group (BCG) said on Thursday.

WHY IT IS IMPORTANT

At the end of April, Spain and Portugal lost power in their worst blackout. Last week there was a power outage in large parts of the Czech Republic. Such incidents have added to concerns about the resilience of Europe’s electricity system.

Increased electrification, power demand growth from AI and data centres, renewables integration and ageing infrastructure mean that Europe’s grids need a massive overhaul.

The report did not provide detail on subsidies some grid operators might receive. Some TSOs can receive subsidies through EU funding programmes or member state initiatives.

BY THE NUMBERS

Europe’s 15 largest TSOs are expected to increase operating cash flow to 120 billion euros from 2025-2029, up from 57 billion euros for 2020-2024, the report said.

They plan to triple capital investment to 345 billion euros over the next five years.

Assuming dividends between 25 billion and 30 billion euros would also need to be paid, this would leave a funding gap of about 250 billion euros, the report said.

This would need to be plugged through debt, equity, divestitures or lower dividends, the report added.

CONTEXT

Europe needs to build more grid infrastructure over the next five years than it has over the past two decades, the report said.

Balance sheets of TSOs are under strain. Many are operating with high debt and publicly traded TSOs are struggling to raise equity in the face of fierce competition.

KEY QUOTE

“Without rapid innovation in how we finance grid infrastructure, Europe risks having world-class renewable generation that can’t reach consumers because the grid hasn’t kept pace,” said Tom Brijs, BCG partner and co-author of the report.

($1 = 0.8528 euros)

Reporting by Nina ChestneyEditing by David Goodman

It was the second Greek bulk carrier sunk this week by the Iran-aligned Houthi militia

International News via Reuters:

Rescuers pulled three more crew members and a security guard alive from the Red Sea on Thursday, maritime security sources said, a day after Houthi militants sank the Greek ship Eternity C and said they were holding some of the crew still missing.

It was the second Greek bulk carrier sunk this week by the Iran-aligned Houthi militia, shattering months of relative calm off Yemen’s coast, the gateway to the Red Sea and a critical route for oil and commodities to the world.

Many shipping companies have suspended voyages due to the fear of attack. The Houthis are believed to be holding six of the Eternity C’s complement of 22 crew and three guards, maritime security sources said.

“These are blameless victims who were simply doing their job,” the UK-based Seafarers’ Charity association said.

“Seafarers should be able to work safely at sea. Instead, they are being unfairly forced into the firing line.”

Eternity C was first hit on Monday with sea drones and rocket-propelled grenades fired from speed boats. Four people are believed to have been killed in the attacks, maritime security sources say. If confirmed, the deaths would be the first fatalities in the area since June 2024.

Following a second attack on Tuesday morning, the crew were forced to jump into the water. Rescuers have been searching for survivors since Wednesday morning. The vessel’s operator, Cosmoship Management, has not responded to Reuters’ requests for comment.

A total of 10 survivors from the Eternity C have been rescued so far – eight Filipino crew members, one Indian and one Greek security guard. The four people rescued on Thursday morning had spent nearly 48 hours in the water.

“This fills us with more courage to continue to search for those missing, as the Greek vessel operator requested, and shows that our search plan was correct,” said Nikos Georgopoulos, an official at the Greece-based maritime risk firm Diaplous.

Another 11 people are still missing.

The United States’ Mission in Yemen has accused the Houthis of kidnapping crew members and has called for their immediate, unconditional release.

On Wednesday, the Houthis’ military spokesperson said in a televised address that the Yemeni navy had “responded to rescue a number of the ship’s crew, provide them with medical care, and transport them to a safe location”.

FRAUGHT PASSAGE

The Eternity C sank on Wednesday, days after Houthis hit and sunk the Magic Seas, reviving a campaign launched in November 2023 that has seen more than 100 ships attacked in what the group said was solidarity with the Palestinians in the Gaza war.

Both of the vessels hit this week flew Liberian flags and were operated by Greek companies. All crew from the Magic Seas were rescued before it went down.

Some of their sister vessels in the respective fleets had made calls to Israeli ports in the past year, an analysis of shipping data showed.

Abdul Malik al-Houthi, the leader of Yemen’s Houthi fighters, reiterated in a televised address on Thursday the group’s ban on companies transporting goods related to Israel through the Red Sea, Gulf of Aden and the Arabian Sea.

He said this week’s attacks were part of that ban, which has been in place since 2023.

“It was never stopped or cancelled, and it is a valid decision,” he said. “What was discovered (this week) was the violation by some companies of the decision.”

The insurance cost of shipping goods through the Red Sea has more than doubled since this week’s attacks, with some underwriters pausing cover for some voyages, industry sources said on Thursday.

The number of daily sailings through the narrow Bab al-Mandab strait, at the southern tip of the Red Sea and a gateway to the Gulf of Aden, was 32 vessels on July 9, down from 43 on July 1, Lloyd’s List Intelligence data showed.

Several ships on Thursday broadcast messages referring to Chinese crew and management or armed guards on board, according to MarineTraffic data. One vessel broadcast that it had no relation with Israel.

Reporting by Renee Maltezou and Yannis Souliotis in Athens, Jonathan Saul in London, Jana Choukeir in Dubai; Writing by Renee Maltezou, Jonathan Saul and Andrew Mills; Editing by Gareth Jones and Alex Richardson

Shares of the company rose more than 5%.

International News via Reuters:

Polestar reported a surge in second-quarter sales on Thursday, bolstered by strong demand for its electric vehicles in its home market of Europe, even as it faces challenges in markets such as the U.S.

Shares of the company rose more than 5%.

Demand for Polestar’s EVs has remained resilient in Europe due to offers and discounts, while several other markets have been weighed by high interest rates, inflation and availability of more affordable hybrid or gas-powered options.

The Sweden-based company sold an estimated 18,049 vehicles in the second quarter, it said, a rise of 38% from the same quarter last year.Europe accounts for 76% of the company’s total sales, CEO Michael Lohscheller told Reuters, adding that Polestar remains “laser focused” on the continent.

Lohscheller reiterated the company’s commitment to localize manufacturing as American import tariffs threaten to hike production costs and disrupt global supply chains.

“In a world where you have more and more tariffs, and also changing tariffs… the only way forward is to localize.”

The tariffs have affected Polestar more than most European automakers because the majority of its cars are produced in China, either by Volvo Cars or Geely. Polestar last week said it would make its Polestar 7 SUV model at a Volvo Cars factory in Slovakia in order to minimize exposure to tariffs. Its vehicle sales in the U.S. fell 56% in the second quarter, Lohscheller said, as the country has seen strong competition and reluctance from consumers to splurge on pricey battery vehicles.

U.S. EV makers Tesla and Rivian also reported drops in second quarter deliveries earlier this month. The country’s EV market is likely to see further pressure from the end of a $7,500 tax credit – which has boosted sales in recent years – this fall.

Reporting by Zaheer Kachwala in Bengaluru; Editing by Leroy Leo

Many airline services remain disrupted in the Middle East

International News via Reuters:

Many airline services remain disrupted in the Middle East following the 12-day air war between Iran and Israel that ended with a U.S.-brokered ceasefire which took hold at the end of June.

Tehran’s main Imam Khomeini Airport opened on July 4 at the end of a 20-day suspension of flights imposed due to Israeli attacks on Iran. But air space closures and safety concerns continue to weigh on airline traffic in the region.

Below are some of the airlines that have cancelled their flights to and from the region:

AEGEAN AIRLINES

The Greek airline will resume part of its flight schedule to and from Beirut starting from July 10, as of July 16 to and from Erbil and as of July 19 to and from Amman. Flight cancellations from and to Tel Aviv will continue up to and including its early morning flight on September 8.

AIR ARABIA

The UAE low-cost airline is resuming flights to Damascus starting on July 10.

AIRBALTIC

Latvia’s airBaltic said that all flights to and from Tel Aviv until September 30 had been cancelled.

AIR CANADA

The Canadian carrier is suspending its flights from Toronto to Dubai until August 4. It had previously postponed resumption of service between Canada and Israel to September 8.

AIR EUROPA

The Spanish airline said that it had cancelled its flights to and from Tel Aviv until July 13. From July 14 to July 31, it will operate on Mondays, Wednesdays, Thursdays and Sundays, and from August 1 onwards, it will operate every day of the week except Saturdays.

AIR FRANCE-KLM 

The group’s Dutch arm KLM said it had cancelled all its flights to and from Tel Aviv until August 30.

DELTA AIR LINES 

The U.S. carrier said that travel to, from or through Tel Aviv may be impacted between June 12 and August 31.

EMIRATES

Emirates said that it had cancelled all flights to and from Tehran through July 17.

FINNAIR

The Finnish airline said that all Doha flights will be rescheduled to depart 25-30 minutes earlier between July 10 and September 2. The carrier added that, currently, it is not flying through the airspace of Iraq, Iran, Syria or Israel.

IAG

IAG-owned British Airways said its flights to Tel Aviv were suspended until July 31. IAG’s low-cost airline, Iberia Express, has cancelled its flights to Tel Aviv until October 25.

ITA AIRWAYS

The Italian Airline said that it would extend the suspension of Tel Aviv flights until July 31, including two flights scheduled on August 1.

LUFTHANSA GROUP 

Lufthansa said that it had suspended all flights to and from Tel Aviv until and including July 31 and to and from Tehran until August 17. Flights to and from Amman are cancelled until and including July 11.

PEGASUS 

The Turkish airline said that it had cancelled all flights to Iran until the end of July.

QATAR AIRWAYS

The Qatari carrier said that flights to Iran remain temporarily suspended.

RYANAIR 

Ryanair said that it had cancelled flights to and from Tel Aviv and to and from Amman until October 25.

UNITED AIRLINES

The U.S. carrier said that it would restart its services to Tel Aviv on July 21, with a second daily flight resuming on July 22.

WIZZ AIR 

The Hungarian airline said that it will resume its flights to and from Tel Aviv on August 8. Flights to Amman are suspended until September 15.

Reporting by Reuters bureaus; compiled by Agnieszka Olenska, Elviira Luoma and Tiago Brandao, Editing by Matt Scuffham, Alison Williams and Milla Nissi-Prussak

An analyst said BMW confirmed on the call its 5-7% auto margin for both the second quarter and the full year

International News via Reuters:

Shares in BMW climbed on Thursday after the German automaker held a well-received pre-close earnings call.

Shares in the German premium carmaker were up 4.4% at 1359 GMT.

An analyst said BMW confirmed on the call its 5-7% auto margin for both the second quarter and the full year.

This is “a strong signal – particularly as the guidance was maintained despite ongoing tariff pressures and a challenging situation in China”, Pal Skirta, an analyst at Metzler Equities, said.

Bernstein analysts echoed this sentiment, noting that the guidance was maintained despite a mid-three-digit million-euro impact from tariffs, which they said helped to assuage some nervousness in the market.

BMW was not immediately available for a comment.

The group holds two investor days next week and releases its quarterly results on July 31.

Earlier on Thursday, the company reported a modest increase in second-quarter deliveries, as growing demand in Europe offset a slump in China, with the U.S. market showing resilience.

Reporting by Danilo Masoni, Amir Orusov, Christina Amann, editing by Samuel Indyk