A worldwide energy crisis is affecting homes and manufacturers who were already struggling to recover from the global pandemic.
why it matters: This is a perfect storm of crises. There is a shortage of supplies, especially from China; inflation; slow growth; labor shortage; Russia’s continued geopolitical muscle-resilience and, of course, the fear that the world would become a crisp.
running news: A combination of weather-related issues (many of which are related to climate change), unpredictable demand and planned outages have sent natural gas and coal prices through the roof.
- of china energy Shortage Already hi-tech manufacturing centers have had to close their doors.
- India is in even worse shapeThere is little potential to bring new power sources online.
- in uk, Rise in natural gas prices saw many companies go bust, while the EU has been reminded how uneasy Dependent It is on Vladimir Putin’s Russia for its energy needs.
big picture: Inflation is bad, but energy-price inflation is terrible. It hurts the poorest the most and evokes memories of a 1970s-style recession, where rising prices are combined with anemic growth.
- global energy transition is for renewable energy well underway, but did not come soon.
- pressure on the energy system Not going to bow down in the coming decades.” writing The International Energy Agency released its latest World Energy Outlook on Wednesday.
By numbers: Worldwide the demand for coal far exceeds the supply. The price of coal hit $274 a tonne on October 5 on the Nymex exchange in New York. A year ago it was $57.
- Between the beginning of May and the beginning of October European natural gas prices increased by about 500% and then decreased slightly.
What will happen next: The United Nations Climate Summit in Glasgow begins on 31 October.
- this crisis This is likely to make China and India more reluctant to phase out coal-fired power plants in the near future. The current crisis shows that they can get as much energy as possible, whatever the source.
Bottom-line: The world is dependent on fossil fuels for much-needed development. The problems with this aren’t just intergenerational. They are here, now.