Media Magelang - From China to the U.S, the world is facing an unexpected energy crisis, thanks to the increase in energy's demand for economic activities which has been severely hit by the COVID-19 pandemic.
The rise in energy's needs has led to skyrocketing coal and crude oil prices.
The spot price of coal in China's Shanxi province surged to 1,630 yuan per ton as of 15 October, prices from SteelHome stated.
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Here are three key points behind the global energy crisis:
The problem is about the energy's supply chain
CEO and founder of a clean energy company Mark Cann told Media Magelang that the global energy mess has nothing to do with production, adding that the main problem is linked with the supply chain.
"Well, the first thing is that there's no shortage of production, oil, gas and coal right now. Globally, the shortages are related to the supply chain of those commodities, not the production. There are some short term production issues, but for the most part, these basically supply chain issues," he told Media Magelang in a Skype interview on 13 October.
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He later added: "So for example, if you look at the UK has up to 40 per cent of their electricity is from when at the same time, there's a two or three week period where the output of the wind goes down. And so wind farms are backed up by natural gas plants, which means you have to have enough natural gas supply to back up your wind farms. That did not happen
Russia is not the culprit
The European Union (E.U) relies on Russia's natural gas due to the former's production decline.
The Eurostat data showed that the bloc has imported 90 percent of its natural gas needs since 2019.
The bloc has blamed Russia-state gas producer Gazprom for manipulating the gas price, as stated in the formal letter sent by the European Parliament.
Mark Cann stated that such a situation is due to a lack of planning as well as a complex bureaucracy.
"The Europeans have a lot of bureaucracy included with their energy markets, and some of the bureaucracy have good intentions, but it also causes issues. For example, there's a brand new pipeline that is still waiting to receive its permit that could be supplying more than enough natural gas right now. That has nothing to do. The Russians will gladly sell that natural gas, but they're still waiting on the EU to finish the permitting so they can transmit the natural gas to that pipeline. So it's kind of interesting to blame the Russians on supply when it's the bureaucracy of the EU that's preventing the supply from going through the pipeline," the CEO of cryoenergy.tech explained.
Russia is the largest natural supplier to Europe, accounting for 43.4 percent.
The European Parliament's letter accused Russia of cutting its supply for pressuring the E.U to approve the controversial Nord Stream 2 pipeline project.
The project which flows from Russia to Germany through the Baltic Sea is one of the completed projects involving both nations.
However, the project gains resistance from the U.S and Ukraine, citing concerns over Europe's reliance on Russia and energy security issues.
The Gazprom-led pipeline project is ready but it is waiting for the permit from Germany before starting to flow the 55 billion cubic meters of natural gas to Europe every year.
Renewable energy is not ready
The energy crisis has caused a global outcry amid calls for the energy transition aimed at reducing carbon emissions.
Such a circumstance seems to show that it will take a long process for us to switch to renewable energy sources from fossil fuels.
According to Worldometers, the global coal consumption reached 8,561,852,178 tons (short tons, st) as of 2016.
"Well, one of the big issues, as the politicians have kind of made, have overpromised on how quickly the transition can take place. So the issue is not whether or not the transition will take place. It will, certainly. The issue is that the politicians essentially promised it would happen very quickly with a very little side effect, and reality is slightly different than that. If you look at energy consumption globally, not just electricity. It's still dominated by fossil fuels. So as the transition takes place over the next few decades, it's going to slowly transition. It's not going to transition all at once," Mark Cann said.
The International Energy Agency (IEA) data stated that global coal demand rose for the second straight year to hit 0.7 per cent in 2018.***