Extreme high electricity prices may force ski resorts to close this winter: 70 percent of the facilities fear they will have to close.

High electricity prices threaten the skiing industry: lifts, snowmaking, and lighting require large amounts of electricity. In Norway, the industry is concerned. While the households receive electricity support, the ski resorts must pay the market price for electricity, and several have expressed that they fear closure. 

In August, the Norwegian ski resorts sounded the alarm. Then the Norwegian Alpine Resorts and Mountain Destinations industry organization sent a letter to the state calling for measures and support schemes for the ski resorts.

“In our area, with the predicted prices now, we are looking at a tenfold increase in power costs, perhaps more for the coming winter,” says Odd Stensrud to Dagens Næringsliv.  

Stensrud is the industry organization’s deputy chairman and general manager of Alpinco, which owns and operates the alpine resorts at Hafjell and Kvitfjell. For Alpinco, electricity costs are the third largest expense item, and the margins for operating ski resorts are already small, according to his words.

“If the electricity prices signaled for the coming winter become a reality, then it is certain that it will mean the hook on the door for several facilities,” says Odd Stensrud.

End Of Ski Holidays In Europe

Sky-high electricity prices are not only a concern for Norwegian destinations. In central Europe, the situation is even more difficult. 

In France, high prices mean that more than half of the ski resorts would have to cancel the winter season. 

Seventy percent of the ski resorts in France have three-year contracts with the state electricity supplier EDF, which will be renegotiated during the autumn. 

Electricity Becomes 20 Times More Expensive

The offer the ski resorts have received from the state company is causing despair in the industry. The price they are looking for is almost 20 times higher than last year. Then, the ski resorts paid for electricity 55 euros per megawatt. This year, EDF has estimated a price of between 800 and 1,000 euros per megawatt. These are electricity prices that the ski resorts are unable to pay. 

“We cannot accept the contract proposal that EDF has presented,” says manager Sébastien Giraud from the popular destination of Villard-de-Lans in the Alps east of Grenoble.

“The electricity bill normally accounts for around five percent of our budget. With these prices, electricity will account for a quarter of the budget. If this is the final offer, we will not be able to stay open this winter because we will not be able to meet the electricity bill,” says Giraud to French television. 

Enormous Effects

If the ski resort has to close, there will be enormous ripple effects. In Villard-de-Lans, ski tourism accounts for 80 percent of the economic base of the entire local community. 

Giraud suggests that if the ski resort needs to close, it will take between 1,000 and 1,500 people unemployed and further affect restaurants, shops, service industries, schools, and other public offers and services.  

Giraud feels that the authorities only continue to defend increased prices and do not realize how serious the consequences will be.

“We have come to the point where the sanctions we imposed on Russia now affect us and the whole of Europe, and that normal person who gets the biggest bill,” says Giraud, adding that electricity prices come on top of galloping inflation in general.

“What is certain is that this crisis will force us to look honestly at how we use energy. Although French ski resorts have already committed to reducing electricity consumption by 10 to 20 percent in 2021, we are ready to contribute further next season. We are already considering measures such as reducing opening hours and suspending evening skiing,” concludes Giraud.