(Bloomberg) -- A U.K. rail freight operator said it’s turning back to diesel-operated trains because electricity costs have gotten too expensive, another small example of the wide-ranging impacts of the global energy crisis.
Unprecedented electricity prices forced Freightliner to make the temporary move “to maintain a cost-effective option for transporting vital goods and supplies across the U.K.” the unit of Genesee and Wyoming Inc., said in a statement.
The U.K. is in the grip of an energy crisis that’s also hurting economies across Europe and Asia. Gas is trading at the equivalent of almost $200 in barrel terms in the U.K., driving a 268% surge in power prices this year. By contrast, Europe’s benchmark diesel price appears cheap, reaching a three-year high of $98 a barrel.
The soaring natural gas price has fueled expectations that industries and power companies will look toward alternative fuels. Most oil analysts are expecting about 500,000 barrels a day of additional demand for crude and refined fuels globally, although some are saying the spillover effect could be significantly larger.
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