Energy crises are snarling at economies in almost every part of the globe, and prices of fossil fuels are going through the roof due to tight supplies. This time the large economies are also facing an energy crunch. In Europe, fuel shortages have left pumps dry and the natural gas prices have surged - stirring a crisis ready to hit as winters approach. Many are talking about the energy crunch in Europe going global including the US.
It sure is catching up elsewhere. Besides the spiraling prices of gas and electricity in Europe, another storm has brewed; an energy crisis has also hit China, which is most likely to have far more implications for the global economy. Power shortage in China is getting serious as two-thirds of the country experienced a blackout recently, while factories are being rationed energy.
While the critics of renewable clean energy blame the intermittent nature for the unstable as well as lower energy production across the globe to meet the rising demand for power as countries return from covid-related restrictions and lockdowns; others are blaming fluctuation in coal and natural gas prices along with dwindling stocks as reasons behind the energy crises all over.
This can also be seen from the fact that even though China’s energy shortfall is deepening, it’s not the power generation capacity hurdling rising demand but the slithering coal reserves amid tall promises of addressing climate change. The decline in coal reserves is because its production of coal has not been able to keep up with the return of demand post-Covid as expected. Also, the country is holding back some reserves for cold winter months, further aggravating the power shortfall. At the same time, China is the largest importer of coal, and that severely affected its energy situation due to soaring coal prices especially after it gave up on Australian coal last year. And then, some coal power generators are also reluctant to import the expensive coal in a bid to comply with the emission targets.
India that has a 70 percent share of coal in its power generation mix is also struggling with coal availability and inventory amid skyrocketing prices.
Fortunately or unfortunately, these crises have unfolded close to the climate summit, COP26 to be held in November. With the resurgence of coal and energy shortages across the globe, China’s recent announcement to halt all overseas coal investments along with its ongoing energy crisis will definitely be a defining moments of the upcoming summit.