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Director Delphine Grossman has created a barrel-aged Negroni cocktail that spins classic vinyl all night.

In a city that is built around cinema, the Hôtel Martinez is quite the scene during the Cannes Film Festival. Full of celebrity suites, festival partners L’Oréal and Chopard, and a lobby filled with photo shoots, the hotel is at the heart of the hustle and bustle.

Now the Martinez has opened a new spot to be seen in — a glamorous, 1930s-inspired bar tucked under the Palme d’Or restaurant, where the jury traditionally holds its first meal together.

The namesake bar opened its doors in March, with a décor that is a dramatic shift from the rest of the hotel’s airy, whitewashed elegance.

“You step off the Croisette and into something completely different,” said bar director Delphine Grossman, a veteran of high-end hospitality whose most recent tenure was at La Mamounia in Marrakech. “It’s like a portal to the 1930s, but with a Cannes spirit.”

When the hotel converted a disused garage and storage area underneath the Michelin-starred Palme d’Or restaurant, which opened last year, it set out to transform the ground floor into a sexy speakeasy that stands out from the flashy beach clubs around town.

The bar is home to 300 vinyl records, heavy on French pop, including classics from Charles Trenet, Edith Piaf and Dalida, remixed with deep house. Tunes start at 9:30 p.m.; people start to warm up by 11 and it’s a low-key dance party by midnight.

“We can say that we are a festive bar, and the crazy thing is that it is happening in the Martinez,” she said. “There’s other places [in the hotel], but if you want something different, with music and good service — it’s my place.”

Grossman presides over the space to personally greet guests, and is also behind the cocktail list. All of her creations are made with spirits — whiskey, cognac, gin and vodka — aromatic plants and less sugar.

Designer Remi Tessier, who also worked on the Palme d’Or, created a maximalist interior filled with deep velvet sofas, silk damasks and mirrored tables, all bathed in red light. Design cues from the restaurant upstairs, which was designed as a vintage yacht, carry through. Gold details and Tiffany-style lamps complete the 1930s lounge atmosphere.

Tessier wanted to create an “intimate venue…imbued with opulent yet understated luxury,” he said. There are 71 seats inside, and 45 on the new Croisette-facing terrace.

“This exclusive setting ensures absolute privacy, making it the perfect place to host prestigious guests for exceptional evenings,” Tessier added.

“People have been waiting for a concept like this in Cannes,” said Grossman, contrasting between the thumping beach clubs on one hand, and the upscale dining scene on the other. So far it’s been warmly welcomed by the town.

“So many local people come and have fun with us, but we still have a high concept and high standards. We need to keep the five-star line, it’s really important. We are still the Hotel Martinez.”

The menu was created by Hotel Martinez chef Jean Imbert of Monsieur Dior fame. It’s full of sharing-style plates heavy on fresh seafood and vegetables, plus the local crispy chickpea bread socca, and executed by chef Alexandre Elia.

Grossman boasts one of the best liquor shelves in town. They’re stacked with 30 whiskeys from Ireland, Japan and Scotland, and it’s the only bar in town that carries the exclusive Macallan M Black Decanter.

The selection of vodkas is also exclusive, including the limited-edition Beluga Epicure Series by Lalique.

Grossman’s signature creation for the Martinez bar is an aged Negroni. She does a double age of Calvados and bourbon, adds a mix of Tanqueray gin, Rosso Antico, Carpano Antica Vermouth and Campari. The concoction ages for three months in barrels from Kentucky’s famous Woodford Distillery before it’s poured into a cocktail glass.

The drink has proved so popular Grossman has ordered four more barrels to keep up with demand.

The bar is normally closed Sunday and Monday, but will be open for the duration of the film festival.

“I want to know everyone that comes in. I’m really proud of my place, and I appreciate sharing about our spirit selections, creating a degustation of whiskey or tequila,” she said. “It’s not just about, get a drink, pay your bill, it’s about an experience I can share with people.”

The airline will bring a one-tonne piece of plane to the sands of Cannes to replicate the La Première luxury experience.

Walking past the Hôtel Martinez, one might think they are passing a film set. After all, there will be first class service planted in the sand.

But it’s Air France that will be making waves, recreating its new La Première experience on the beach.

There will be a 14-foot-long, fully immersive mock-up of the plane’s first class suite for guests to experience the luxury bubble. In the air, the suite comes with a reclining sofa bed and five windows. On the ground, it’s a great background for a selfie.

“The weight of the La Première cabin recreated on our beach is about one ton. You can imagine that is not that easy to install on the sand,” said Air France director of client experience Fabien Pelous. “It’s a technical feat to install something like this directly on the beach. It’s about allowing people to physically step into the experience.”

The airline has recently redesigned its lounges in Los Angeles and San Francisco, with New York slated soon. Each will have dedicated La Première areas. There’s also a private lounge in Paris’ Charles de Gaulle airport, a luxury space that made its screen debut on an episode of “Emily in Paris.” That lounge offers a private entrance, security area and car service for an “end-to-end luxury experience.”

“It’s definitely part of our moving upmarket strategy,” Pelous said. Other moves include enlisting Simon Porte Jacquemus as its first designer to create loungewear and pajamas for its first-class La Première passengers.

The installation also coincides with the airline’s launch of an L.A. to Nice direct flight that will only take place during the film festival.

“We created this special flight because we have a lot of direct demand, especially from Los Angeles,” Pelous said. “It’s also a way to make a bridge between Los Angeles, an important city of cinema, and Cannes during the festival.”

To play in the plane, guests can reserve for lunch complete with a ticket to test the seat. They’ll also have access to the sunbeds and an adaptation of a La Première lounge with its new colors and atmosphere. The bar will feature the same wines available in La Première.

Private dinners will be held throughout the festival, courtesy of Michelin chef Emmanuel Renaut, who has put his signature on the La Première in flight menus.

The airline has long been a partner of the festival. Pelous said that there are a lot of synergies between the two industries, adding: “We are a fantastic movie theater with 38,000 screens in the sky every day.”

The Tiger Global Management megafund that made more than 200 investments during the peak of the pandemic-era startup boom was still in the red at the end of 2024, thanks to write-downs on a majority of its investments.

But the spike in valuations of OpenAI and other artificial intelligence investments is softening the blow for the $12.7 billion fund, famous for both its size and the speed with which it has backed startups.

The Takeaway

• Tiger’s PIP 15 fund had an annualized return of negative 12% at end 2024

• The fund lost money on the distressed sale of Lacework

• Tiger continues to buy shares of OpenAI, the fund’s most valuable investment

The fund, launched in October 2021, had an annualized return, net of fees, of negative 12% at the end of last year, according to documents reviewed by The Information. That’s an improvement from the fourth quarter of 2023, when it was negative 20%, a person familiar with the matter said.

Still, the fund’s recent performance has lagged the broader market and funds operated by its peers. The S&P 500’s annualized returns, net of fees and including dividends, generated an annualized return of 12% between October 2021 and the end of 2024. As of the third quarter, the Tiger fund’s negative internal rate of return of 14% put it in the bottom decile of global funds launched the same year, according to PitchBook, which hasn’t released its benchmarks for the fourth quarter.

Tiger’s older and newer venture capital funds have performed far better. Its PIP 10, launched in late 2015, had an annualized return, net of fees, of 29%, as of the fourth quarter, according to a person familiar with the matter. That puts it in the top quartile of funds for that year, according to PitchBook.

In April 2024, Tiger Global raised $2.2 billion for its PIP 16 fund, after sharply reducing the original target of $6 billion. PIP 16’s investments are worth more than the capital it has invested in those companies, according to a person familiar with the matter.

Tiger Global has raised more than $41 billion for its 15 VC funds since 2003, according to PitchBook. Together, they have generated a net internal rate of return of 17% and distributed around $31 billion in cash to their investors, according to the person. Meanwhile, the hedge fund’s flagship fund, which holds public stocks, rose 2.5% in the first quarter, a contrast with the nearly 5% drop in the S&P 500.

There is some precedence for big funds to recover after rough starts. SoftBank’s $100 billion Vision Fund, launched in 2017, had been deep in the red in past years thanks to WeWork and other unsuccessful investments. But it has been posting gains in recent quarters, thanks to higher valuations of private startups like ByteDance and of public stocks.

Tiger Global was among the most aggressive tech investors during the pandemic’s low-interest-rate period. In 2020 and early 2021, before raising its $12.7 billion fund, it invested in dozens of startups. The New York hedge fund moved quickly, writing founders’ checks sometimes in as little as three days from initial conversations to signed term sheets, and doubled down on favorite investments using secondary shares.

The buying spree almost immediately soured once tech stocks crashed in late 2021.

The supersize flagship fund, called PIP 15, bet heavily on fintech, e-commerce and crypto, areas hit particularly hard when interest rates spiked. Within a year of raising the fund in October 2021, Tiger had invested nearly $11 billion of the money raised, according to documents shown to investors.

While some of those investments have started to recover, the fund has continued to slash the value for others.

It has written down its stake in nonfungible token marketplace startup OpenSea, which it backed in 2021 and 2022, to $7.5 million at the end of last year, from $127 million.

The fund also wrote down its investment in Level to $2 million from $79.4 million. The benefits startup abruptly shut down in January, The Information first reported.

Investments in some AI startups partially offset those losses. The fund’s biggest position and most valuable investment is OpenAI. The fund made a $125 million investment in 2021 when OpenAI was valued at $15.7 billion. Tiger’s PIP 15 then bought a combined $80 million of shares through a secondary sale that valued the ChatGPT maker at $86 billion and through a fundraise last year that put a $157 billion valuation on it.

Tiger’s PIP 15 stake in OpenAI was valued at $650 million at year-end, which means on paper it is worth more than three times the capital it invested in the company, the documents show. It’s likely worth even more today, thanks to a SoftBank-led round that values OpenAI at $300 billion including the investment.

Tiger is participating in the latest round, and it has also backed OpenAI through other funds, according to the person.

The fund’s returns have benefited from the rising value of its investment in Worldcoin, a cryptocurrency startup co-founded by OpenAI CEO and co-founder Sam Altman, and its associated token. After investing $15 million in Worldcoin in May 2022, the fund wrote down the position to $6 million at the end of 2022, during the depths of the crypto sell-off. But by the end of last year, the stake was worth $114 million on paper, according to the documents shown to investors.

And Tiger marked up its position in humanoid robotics company 1X Technologies, which OpenAI has also invested in. The PIP 15 fund invested $9 million into the company between 2022 and last year. Tiger now estimates the stake is worth nearly $32 million.

The firm also took some money off the table in its AI bets. By late last year, PIP 15 had sold 30% of its stake in Cohere, a competitor to OpenAI. The value of the remaining shares have gone up since Cohere raised more capital in July at a $5.5 billion valuation. The fund invested $62.7 million in the company in 2021 and values the remaining stake at $163.5 million.

The performance of the fund this year may improve thanks to some recent transactions. In March, ServiceNow said it planned to buy AI startup Moveworks for $2.85 billion. Tiger’s PIP 15 fund put $83 million into the startup, a stake that should be worth $100.7 million based on that sales price.

The Tiger megafund also invested $77.4 million in Flock Safety, including leading a round in the surveillance startup at a $3.5 billion valuation in 2022. In March, Flock Safety raised money at a $7.5 billion valuation, with Tiger Global participating in the round.

PIP 15 may also eventually return some capital from its investment in Revolut, a U.K.-based fintech, which is reportedly considering going public.

In recent quarters, the fund has started to sell more of its positions, thanks to a pickup in mergers. For the most part, the sales haven’t translated to big gains. In December, Nvidia acquired Run:ai, an Israel-based AI software startup the PIP 15 fund backed in 2022. The fund realized proceeds of nearly $36 million, or 1.1 times the cost of its investment.

PIP 15 lost money from several distressed sales, including cybersecurity firm Lacework’s sale to Fortinet in August 2024. It also lost $6 million on its $55 million investment in Octo AI, which Nvidia acquired in September.

The fund also wrote down most of its $55 million investment in Humane, which developed a wearable AI device and sold to HP in February at a 86% discount to its last private valuation.

PIP 15’s most successful exit has been Cider Security. The fund’s stake tripled in value when Palo Alto Networks bought the Israeli cybersecurity startup in late 2022.

China Is Building Megaports in South America to Feed Its Need for Crops

State grain trader Cofco plans world’s biggest export terminal in Brazil to substitute U.S. soybeans and other foodstuffs

Key Points

• China is investing in South American infrastructure to secure agricultural imports.
• Santos, Brazil’s main port for exports to China, is struggling with capacity and infrastructure.
• Brazil’s fertilizer supply issues and soil nutrient depletion pose challenges to increased crop production.

SANTOS, Brazil—China has reassured its citizens they would have enough to eat without U.S. crops. It will have to unclog Latin America’s largest port first.

The decrepit port in this Atlantic coast city is the main gateway for South American exports of soybeans and other agricultural goods that represent China’s only viable alternative supply to U.S. exports. Though China has reduced its reliance on U.S. foodstuffs, crops are still among the top U.S. exports to China.

China’s state-owned agricultural conglomerate, Cofco, is building its biggest export terminal outside China at the port to manage shipments of corn, sugar and soybeans. It would increase the company’s annual export capacity to 14 million tons from 4.5 million, but isn’t expected to reach full capacity until next year.

The Santos port fits into China’s wider plan to secure access to South America’s agricultural bounty amid shortages of water and arable land at home. Chinese companies are laying hundreds of miles of railroad across Brazil’s agricultural heartland and finishing work on a $3.5 billion deep-water port on Peru’s Pacific coast.

The trade war with the U.S. has heightened the urgency of these projects. Chinese leader Xi Jinping met South American leaders including Brazilian President Luiz Inácio Lula da Silva in Beijing on Monday to discuss their deepening ties.

Brazilian officials are welcoming the chance to draw foreign investment to the country’s rickety roads, railroads and ports.

“We need more and more infrastructure,” Renan Filho, Brazil’s transportation minister, said in an interview.

Squeezed between rows of warehouses and the ruins of colonial-era sugar mills at the heart of the Santos port, a towering crane was putting the finishing touches to three Cofco silos, each the size of an apartment building.

Since entering the Brazilian market in 2014 by acquiring Dutch grain trader Nidera and the agricultural unit of Hong Kong-based Noble, Cofco has relied on third-party terminals at an extra cost of some 15%. But in March 2022, Cofco secured a 25-year concession to develop the STS11 terminal at Santos Port, committing to invest some $285 million into the site.

China’s state ports conglomerate China Merchants Port Holdings had already acquired a 90% stake in the operator of Paranaguá, another busy port in Brazil’s south, in 2017 for $925 million. The state company China Railway has also been building part of a railroad that connects Brazil’s central farming belt to ports in eastern and northern Brazil.

In Peru, Cosco Shipping built a deep-water megaport to speed trade between Asia and South America. Beijing has also discussed with the region’s governments a vast railroad running from Peru’s Pacific coast to Brazilian ports on the Atlantic.

Chinese officials on April 28 said they can easily drop U.S. crop imports and still hit their 5% growth target this year. Brazil—and, to a lesser extent, Argentina—would fill the void, according to analysts tracking agricultural markets.

Brazil benefited from global trade tensions during President Trump’s first term, displacing U.S. exports to China. Between 2017 and 2024, China increased imports of Brazilian soybeans 35% to 73 million tons, while cutting imports of U.S. soybeans 14% to 27 million tons, according to the Center for Strategic and International Studies in Washington.

“You only have to see what happened in the first Trump administration,” said Cláudia Trevisan, head of the Brazil-China Business Council. “Trump imposed tariffs on imports from China, China retaliated, and Brazil increased its exports to China of products that the U.S. also used to supply, mainly soybeans.”

By 2023, Brazil accounted for about a quarter of Chinese agricultural imports, while the U.S. share had dropped to about 14%, government data show. Brazil now supplies about 70% of soybean shipments to China. About 30% pass through Santos, with smaller shares sent through Paranaguá and the northern ports of Itaqui and Barcarena.

Santos can hardly keep up. Santos handled a record 180 million tons of cargo last year, about 60% of it agricultural goods. Strikes are commonplace. More than 90% of Brazil’s port capacity for exporting agricultural bulk goods is in use, exceeding the operational safety limit of 85%, according to logistics consulting firm Macroinfra.

Because the country lacks the extensive railroads that carry soybeans and corn in the U.S., crops mainly arrive in Santos by truck—as many as 20,000 a day, port authorities say. Traffic jams snake up to 20 miles down nearby highways.

“God knows how anything leaves this country,” said Silvia Ferreira, a schoolteacher in Santos, home to almost half a million people.

Farms are also under pressure, particularly as fertilizer costs soar.

Brazil’s temperate climate allows for three harvests a year, compared with the one most countries manage. But this drains the land of nutrients, and Brazil’s clay-based soils struggle to retain minerals during heavy rains. So fertilizer is critical.

Brazil, which imports 85% of its fertilizers, mainly from Russia, was already struggling to secure what it needed after Russia invaded Ukraine. Trade tensions between the U.S. and Canada, a top fertilizer supplier to its neighbor, have further pushed up global prices.

“Brazil has so much potential, yes, but that doesn’t mean it can wave a magic wand and, overnight, expand production and meet China’s demands,” said Plinio Nastari, head of agricultural consulting firm Datagro. “It has its own problems and all of this is part of the equation.”

Italian train operator calls for European co-operation to create cross-border ‘metro service’

FS Group chief Stefano Donnarumma says competing national interests undermine rail connectivity

The head of Italy’s state railway company has called on European operators to co-operate and create a “common project” to provide faster and more frequent services between the continent’s biggest cities. 

The comments by Stefano Donnarumma, chief executive of FS Group, show how domestic interests have often undermined efforts to improve cross-border rail connectivity despite rising demand since the pandemic. The EU introduced legislation to push competition on many domestic lines in 2016.

Donnarumma, whose company plans to challenge Eurostar’s monopoly by investing €1bn to launch a high-speed London to Paris service by 2029, said some countries had failed to prioritise connectivity within the continent.

“Cross-border transportation has not been a priority of the national operators, because the needs for . . . investment in your own country are so important that you just focus on these,” he said. 

Donnarumma said he wanted to connect European cities “like with a metro service”, but conceded that this would be unrealistic without competitors working together, including on sharing depots and staff.

“I’ve had an open discussion with my colleagues of the other companies, and I said exactly this, why don’t we think about a common project where also several companies may participate?”

FS Group, which employs more than 95,000 people and runs nearly 10,000 trains a day, is one of Europe’s biggest railway groups. It operates domestic and international services from Italy through its Trenitalia subsidiary, and runs services in Spain, the UK, Greece, France and Germany. 

Donnarumma said FS Group wanted eventually to run trains direct from Milan to London, and hoped to jump ahead of others planning services through the channel by using high-speed ETR1000 trains that it has ordered from Hitachi. 

He also said other nations should consider limits on short-haul flights where there is a viable rail alternative, citing a 2023 French ban on some flights where a rail journey of two and a half hours was available. 

“The approach of France is really in a good direction . . . And it may be interesting to enlarge this to the other countries,” Donnarumma added.

Alberto Mazzola, executive director of the railway industry body CER, said European railways “agree on their vision” for a high-speed cross-border rail network connecting major cities but lack “a unifying plan of action”.

CER said this month that cross-border rail travel would only be fully realised if there was faster deployment of the pan-European rail traffic management system, frictionless international ticketing and better harmonisation of national rules.

EU transport commissioner Apostolos Tzitzikostas told the Financial Times that there were “clear signs that citizens are choosing rail”, and pledged to present a plan “to fully connect all EU capitals and major cities with high-speed rail” by the summer. 

The commission is working on legislation that would oblige national rail networks to improve cross-border train lines and to harmonise technology for rolling stock, according to an EU official involved in the work.

“Market integration is happening,” they said. “But we’re still working to fully build the single Europe railway area.”

Jon Worth, a European cross-border consultant, said that some railway companies such as Germany’s Deutsche Bahn and Austria’s OBB already work closely together, although not all relationships between state-owned railway companies were as harmonious. 

“The answer here is not to compete or collaborate, if you’re a state owned railway. It’s do both, and decide which it is based on how malevolent or not the railway on the other side of the border is.”

Powering Britain: the plan to split the electricity market

After months of bitter debate, Ed Miliband is under pressure to decide on ‘zonal pricing’ policy

As strong northerly winds buffeted Scotland in the early hours of March 30, the Moray East and West offshore wind farms should have been in their element. Instead they were cutting output at several points during the day.

In one 30-minute period at about 2.30am, as gusts hit 59km an hour, the wind farms were paid £67,000 to produce less than planned, because the UK’s electricity grid could not send power where it was needed.

At the same time, 30 miles east of London, the Damhead Creek gas plant on the Thames Estuary was paid £26,000 to increase its output, according to grid data analysed by the Financial Times.

That windy night is a snapshot of the billions of pounds the UK spends each year to balance a power market in which, as part of the shift to greener energy, electricity is increasingly produced by wind turbines on remote coastlines, far from the cities where it is consumed.

The payments have pushed up electricity bills and are a main driver of a radical proposed shake-up of Britain’s power market, which has been debated for years and is now approaching crunch time in Whitehall.

After months of bitter debate over the benefits and risks of splitting the market into different regions, or “zones”, Ed Miliband, energy security secretary, is under pressure to decide ahead of an auction this summer for new renewable projects.

Powering Britain

This is the first part in a series on the future of Britain’s electricity grid

Part 1: Zonal pricing — the contested plan to split the power market

Part 2: Flexible tariffs — can consumers be persuaded to change their behaviour?

Part 3: Imports and exports — where will Britain be in 2030?

Big power station developers have warned that such radical surgery risks deterring investment just as the government needs to lure billions of pounds into new wind and solar farms in order to meet its target of decarbonising the electricity system by 2030.

But supporters of the policy, led by Octopus Energy, whose chief executive Greg Jackson has the ear of several ministers, insist the reforms are needed for the market to catch up with the huge changes in Britain’s electricity generation mix and claim they would bring down household costs overall.

“The big picture is the rest of the world is going in this direction,” said Jackson, pointing to the adoption of zonal pricing this month in Ontario, Canada, following Italy, Denmark and Australia and other countries. “The UK risks being left behind with ever higher energy bills.”

There remain significant doubts inside government, however, given the risk of putting companies off bidding in the upcoming auction owing to the uncertainties zonal pricing would create over electricity prices, and the likelihood of lower wholesale power prices in Scotland.

Danish developer Ørsted’s decision last week to halt plans for a vast new wind farm in the North Sea has fuelled concerns about missing the clean power target on the back of a failed offshore wind auction round in 2023.

“The Ørsted news . . . has had the side benefit of concentrating minds on the risk of another confidence crisis in the offshore wind industry,” said one government figure. “Any lingering doubts that we need a quick decision on zonal have been dispelled.”

The debate in the UK comes as blackouts in Spain and Portugal last month have highlighted the importance of carefully managing the electricity system, although the reasons for that outage are not yet known.

Britain’s electricity market was designed for the era of large, centralised coal- and gas-fired power stations. More electricity is now coming from wind and solar plants scattered around the country, but it cannot always be moved to where it is needed owing to limited grid capacity. 

A single national electricity price and traders’ ability to buy and sell wherever they are located means the market does not reflect regional variations in supply and demand or difficulties moving electricity around.

Instead, it is left to the government’s National Energy System Operator to smooth out the system, paying stations in some areas to cut output and paying others to lift it. Such payments and other balancing measures cost more than £2bn last year, but NESO projects they could rise to £7.8bn in 2030, depending on how much new cable capacity is built by then.

The idea behind zonal pricing is to reduce the bill for balancing payments and network upgrades by splitting the market into zones reflecting the boundaries of each regional electricity network. Each would have its own wholesale prices according to supply and demand within the zone, aimed at making the market more efficient.

Power station developers argue uncertainty over power prices would push up their financing costs by introducing more risk, which would ultimately feed through into higher consumer costs — just as Miliband is promising to bring bills down.

They also say ministers have already taken several steps to boost market efficiency, including being more prescriptive about where new wind and solar farms can be built. 

Zonal pricing “would do nothing to reduce bills and is instead driving up the cost of investment today”, said 55 investors, including RWE, Brookfield, Centrica and the Ontario Teachers’ Pension Plan in a letter to the government in February, urging against the policy.  

Ocean Winds, owner of the Moray East and West wind farms, said constraint payments were a “symptom of decades of under-investment” in Scottish infrastructure, and that zonal pricing would put it at further risk.

“The most important thing is that the industry has clarity,” Tom Glover, UK country chair for Frankfurt-based RWE, said last week. “As much as I think my preferred decision is to have zonal taken off the table, the worst thing is to have no decision at all. You have no idea how to price the risk.”

The policy could lead to significant local variations in price. An analysis by consultancy FTI for Octopus estimated that average annual wholesale prices in 2035 would range from £17.25 per megawatt-hour in northern Scotland to £35.90 per megawatt-hour in East Anglia.

Households could be shielded by tariffs that smooth out variations in wholesale prices, as in Italy, Denmark and others. The energy department said it was “not about to introduce a postcode lottery”.

But the fewer consumers exposed to local price variations, the fewer would adapt by, for example, charging their electric car at times of high winds in Scotland, and the less the system would become more efficient.

Heavy industry is not yet convinced. “You are not going to pull up your steel site and move to Scotland,” said Arjan Geveke, director of the Energy Intensive Users Group, who has asked the government to assess the impact on his members. 

As the government’s decision nears, there are nerves inside Whitehall about how the proposals could be received by voters still facing the fallout of the energy price shock worsened by Russia’s full-scale invasion of Ukraine. The risks of deterring investment also loom large.

“It’s £4bn of other people’s money that I’m investing,” said Keith Anderson, chief executive of Scottish Power, referring to the amount the wind farm developer was spending on a current offshore project.

“I can’t bid into a system where somebody says, ‘We’re introducing zonal power pricing . . . and I can’t tell you the wholesale power price.’ These questions need to be answered.”

Spain probes cyber weaknesses at small power plants after blackout

Madrid says ‘everything remains on the table’ as it seeks to identify the cause of massive April 28 outage

Spain is demanding information from small electricity generators on their cyber defences as investigators probing last month’s blackout seek to determine whether they were a weak link exploited by bad actors to bring down the country’s power grid.

The questions from Spain’s National Cybersecurity Institute (Incibe) will intensify the debate about whether the country’s dependence on renewable energy was to blame for the power outage, a contention dismissed by Prime Minister Pedro Sánchez, a champion of decarbonisation.

Senior government officials have “concerns” about the robustness of cyber defences at small and medium-sized power facilities, notably the solar and wind farms that have proliferated as Spain became a global renewables leader, said one person familiar with the matter.

Spain has yet to identify the root cause of the collapse of the Iberian power grid on April 28 and has not discounted a cyber attack. “As of today, we are not ruling out any possibilities. Everything remains on the table,” said Spain’s energy and environment ministry.

Separately, a judge at Spain’s National High Court has opened an investigation into whether a cyber attack was behind it.

Spanish grid operator Red Eléctrica said on the day after the outage that there was no evidence of a cyber attack on its own facilities, but has not commented since then.

The government said last week that Spain suffered 100,000 cyber attacks across all sectors last year, with 70 per cent of them targeting companies or other organisations, as it announced a €1.1bn investment to reinforce cyber security.

Three companies that own or operate renewable power plants told the Financial Times they had received a barrage of questions about the blackout and their own defences from or Incibe, as part of official inquiries into what happened.

The questions included “Is it possible to control the power plant remotely?”, “Were any anomalies detected prior to the 28 April incident?” and “Have you installed any recent security patches or updates?”

One government official said the authorities were pursuing multiple lines of inquiry and that Incibe’s questions were not a sign that one hypothesis about the blackout was being given more weight than others.

Spain’s renewable energy boom has ended the country’s traditional model in which electricity generation was concentrated in a few big, highly-regulated fossil fuel or nuclear power plants.

Instead Spain has shifted to a system of thousands of smaller generators, which has created more targets for hackers wanting to wreak havoc by injecting malware or disrupting power flows.

Potential entry points into the system, all linked to the internet, include firmware-run devices that convert electricity into a safe current, and communication channels between generating units and control centres.

Red Eléctrica says it receives live data from 4,000 renewable installations that have a generation capacity of at least 1 megawatt. It can send instructions in real time to modify the production of those that are 5MW or larger.

But in its latest annual report Red Eléctrica’s parent company identified as a risk having “insufficient information for the real-time operation of the system due to an increase in renewable generation facilities with outputs below 1MW”.

Anpier, a trade group, estimates that Spain has about 54,000 solar installations connected to the grid, including small-scale rooftop arrays at factories, offices and homes.

Several Spanish electricity executives said they doubted that a cyber attack caused the blackout — in part because of the difficulty of executing one with such a dramatic impact. But they conceded that an assault in a form not previously conceived could not be ruled out.

Miguel López, regional sales director in southern Europe for cyber security group Barracuda, said: “With the information that we have available at the moment, a cyber attack doesn’t seem to be the most plausible hypothesis, because there would have needed to be several very well co-ordinated attacks on several different agents.”

If hackers had succeeded in “breaking” something it would have taken much longer than the 16 hours Spain needed to fully restore grid functioning, López added.

Anpier said: “In general . . . small photovoltaic installations do not have systems that can be attacked and that can cause electrical problems remotely. Moreover, it is impossible for a one-off disturbance in installations of this size to have an influence on the system.”

The blackout occurred after Spain lost 15 gigawatts of electricity — 60 per cent of its supply — in just five seconds, destabilising the grid and causing multiple other power stations to disconnect. Before the outage renewables were contributing 70 per cent of Spain’s electricity.

Uncertainty hangs over Europe’s EV sales resurgence

Demand for battery-run cars strong in first quarter but analysts warn trend may not continue

Sales of electric vehicles have enjoyed a resurgence in Europe this year but analysts warn that geopolitical turbulence and regulatory uncertainty could threaten their continuing momentum.

A sharp rebound in EV demand across the continent has been one of the few bright spots for carmakers at a time when Porsche, Volvo Cars, Mercedes-Benz and others have reduced or withdrawn their earnings forecasts due to the turmoil caused by Donald Trump’s rapidly evolving tariff war.

Registrations of new electric cars in wider Europe and the UK have increased 28 per cent to 573,500 vehicles during the first three months of the year, driven by a sharp recovery in Germany, according to European car industry body ACEA.

At Volkswagen quarterly sales of EVs in the continent have more than doubled, with every one in five cars sold in western Europe now fully electric. BMW also reported a 64 per cent year-on-year jump in EV retail sales in Europe from January to March, while global sales of EVs at Renault increased 88 per cent. 

Tesla was one of the few exceptions, with its EV sales in Europe declining 37 per cent during the same period as the consumer backlash against Elon Musk’s political activism continued. 

Analysts say the broader rebound in EV sales across Europe had been expected since many carmakers had delayed sales of their new EV models until early this year to make it easier for them to meet the EU’s tougher emissions regulations. Cheaper offerings of electric cars below €25,000, such as the Renault 5 and Citroën ë-C3, also boosted consumer demand. 

At an earnings briefing in late April, Fabrice Cambolive, chief executive of the Renault brand, said the success of the Renault 5 showed that the small car segment was capable of shifting to fully electric vehicles. “This is a big trend,” he added. 

Renault’s strong sales came even as EV sales in France have fallen 7 per cent in the first quarter following the removal of generous government subsidies that bolstered EV sales in early 2024. The government will introduce more subsidies in the second half of the year but the package is set to be less generous, said Marie-Laure Nivot, head of automotive analysis at AAA.

In Germany, the return of corporate customers facing the expiry of subsidised lease contracts from 2022 was prompting a fresh wave of vehicle orders, said automotive analyst Matthias Schmidt.

Daniel Schwarz, analyst at Stifel, added that the long-term trend of falling electric vehicle prices, coupled with rising costs for combustion engine cars, have supported a steady uptick in EV demand. 

Despite the latest encouraging data, a continued rise in EV demand will not be a straight line.

The EU’s recent decision to ease its emissions regulations for combustion engine vehicles, though welcomed by carmakers, “could temporarily slow battery electric vehicle penetration (BEV) in the EU” as it reduces pressure for an aggressive rollout for car companies, according to Schwarz.

In an interview, Michael Lohscheller, chief executive of EV maker Polestar, said regulators needed to provide clarity for consumers so they do not hesitate to make the electric shift. “Wherever there is uncertainty, people wonder about this,” he added. 

The greater flexibility in the EU’s emissions rules also comes as the industry is under heavy pressure from the policy uncertainty and higher tariffs unleashed by Trump’s trade tensions which could slow costly investments in EVs.

“This is the year where Europe needs to double down on pushing electric cars to the market,” said Chris Heron, secretary-general of trade association E-Mobility Europe. “But things happening globally are going to make that more challenging for everyone.” 

The rise in EV sales is also a double-edged sword for some carmakers because profit margins on electric cars are still lower than petrol vehicles due to high battery costs. For those such as Volkswagen, who do not have an affordable EV on the market, need to offer heavy discounts to persuade consumers to make the electric switch. 

“The significant expansion of BEV volumes, particularly in Europe, as well as the ramp-up costs of numerous new models . . . are expected to burden earnings in 2025,” Arno Antlitz, VW’s chief financial officer, recently told analysts. 

The German group will launch its ID2 — its first EV with a price tag under €25,000 — next year and an even lower priced ID1 in 2027. “With the ID2 family, the margin dilution effect of the BEVs should really then be much smaller than today,” Antlitz added.

US groups raced to stockpile pharmaceuticals ahead of tariffs

Imports of products used by pharma and medical groups surged to a record in March

The US imported a record $53bn of products used in the pharmaceuticals and medical industry in March as companies rushed to build stockpiles in case Donald Trump hits the sector with tariffs.

Imports of pharma products soared around 160 per cent in March from the same month the previous year, and almost doubled from February, reaching the highest on Census Bureau records stretching back to 2002.

The rush to purchase finished products and ingredients that are used to make them is one of the earliest signs of how Trump’s sweeping tariffs on US trading partners are reshaping global business.

Trump has not yet announced levies targeting the pharmaceuticals sector, but companies are preparing for the possibility they might be imposed after the US last month launched a national security review on the subject.

The US president on Monday promised to make European countries pay more for drugs, while calling on pharmaceutical companies to lower prices for US consumers. A White House official noted, however, that tariffs on pharma products were a “separate” matter.

The US and UK said last week they would promptly negotiate “significantly preferential” tariff treatments on drugs and ingredients. The pledge would be contingent on the outcome of Washington’s pharmaceuticals sector probe and UK compliance with supply chain security requirements.

Ireland accounted for $28bn of the imports in March, up from $5.5bn in the same period the previous year. Several US pharmaceutical companies have manufacturing sites in Ireland — lured in part by Dublin’s relatively low corporate tax rate. The country, which is the third-largest exporter of pharmaceuticals globally, has approximately 50 US Food and Drug Administration-approved pharma and biopharma plants.

JPMorgan Chase’s Abiel Reinhart said branded drug developers “will be able to use the import stockpile they are building now to cushion the impact of tariffs while they build out US manufacturing”.

Cuts to US corporate tax rates during the previous Trump administration reduced some of the incentive to manufacture in Europe, he said, but added that “the volume of production in Europe is still high owing to past investments”.

A number of US pharmaceutical groups have recently made announcements about expanding domestic manufacturing. These include Eli Lilly, which in February set out plans for $27bn of investment, while Johnson & Johnson said in March that it would invest more than $55bn in four factories.

On a quarterly earnings call this month, Lilly’s chief executive told investors that “upon completion” of the company’s manufacturing plan, it “will be able to supply medicines for the US market entirely from US facilities, as well as increase the volume of medicines we export”. 

Other US pharmaceutical companies have stressed that they already have a strong domestic manufacturing presence, and that they have set up processes to respond to volatile trade policy.

Biogen, a large biotech group, said in its first-quarter results that it “operates a significant manufacturing presence in the US”, while Pfizer’s chief financial officer told analysts that the company had set up a “cross-functional team” to analyse potential outcomes in the current “fluid environment”. 

Merck chief executive Rob Davis told analysts that while the company’s “biggest exposure” for tariffs was its blockbuster cancer drug Keytruda, it had inventory in the US to last all of 2025. 

Industry figures have warned on the impact of pharmaceutical tariffs, including the chief executive of Johnson and Johnson who said that they could lead to drug shortages. 

The US currently has no tariffs on many pharmaceuticals because of a 1994 World Trade Organization trade deal.

European pharmaceuticals companies are also boosting their US investments in response to the tariff threats. AstraZeneca said this month it was planning further investment in addition to its 11 US production sites, including shifting manufacture of Europe-made products to the country.

UK-listed GSK is planning tens of billions of dollars of investment in manufacturing and research and development in the US over the next five years.