Energy crisis in world in 2020

 Energy crisis is a situation of widening gap between demand and supply of energy. Post COVID situation in the world witnessed the supply of natural gas,coal and other energy sources fails to adequately satisfy demand. Examples of recent natural gas crisis in Europe where prices of natural gas has risen by over 400%, prices of electricity risen by over 250%, in UK many fuel pumps running dry, in China several factories are shutdown due to power shortages linked to reduced supply of coal, In India several power plants are also running critically low coal stock. .India’s oil prices is all time high above 100 per liter, gas prices risen by 60% from last week…so on..

Causes :

1) Bounce back of economic activity after pandemic as consumer demand is back. It results into more production. For production require power which itself is short due to labour shortages.

2) greenflation: due to environmental concern and Paris agreement on climate change, government has placed restrictions on traditional energy sources coal,oil and natural gas. Encouraging more renewable energy sources NDC targets and Net zero carbon emissions target. This led to reduced investment in traditional sources of energy.

3) geopolitical factors at regional and local levels leads to reduced production of oil,gas and coal and less supplied and exported to get their hidden agenda fulfill. Russia reduced supply to Europe or OPEC countries is not rising their production.

4) economic factors operates at global level . Oil producer and marketing companies want to recover their loss caused by pandemic by rising the prices, reducing the supplies, future trading contracts , winter demand further increases. Low investment investment in energy sectors, shifted priorities 

Energy crunch in the world will further worsen in winter. 

POWER CRISIS IN INDIA DUE TO COAL SHORTAGES IN 2021

 Coal based thermal power in India at present crisis: only 3 days of coal fuel supply left out and some of thermal power plants on verge of shutdown such as Adani power of Mudra and many thermal power plants runs at 50% or less of its capacity.

Causes :

1) supply shortage due to flooding of coal mining areas of eastern and central India in this monsoon season. Coal production during monsoon is typically low, which account for lower production. However, the power plants themselves had failed to build up their stocks prior to the monsoon season due to shortage of labour force created by COVID.

2) India’s 70% of electricity generated by coal power plants in India, nearly 3/4th is generated using domestically mined coal, while rest 1/4th is generated using imported coal mainly from Indonesia and others. The prices of coal imports from Indonesia has risen from 60USD/tonne in March to 200USD/tonne in September, making coal imports undesirable options for power plants. International prices of coal increased due to power crisis in China.

3) India’s total coal production of 716million tonnes in 2020+21 coal India limited largest producer had produced 596MT..in the monsoon season production dip due to flooding resulting into shortage between 60000-80000 tonnes a day

4) demand factors increased due to fast recovery of economy after post COVID by industrial,commercial and domestic sectors. Daily consumption of electricity has crossed beyond 4billion units per day and nearly 70% demand is met through coal fired thermal power plants.

5) legacy issues such as heavy dues of coal companies in various states.

6) low investment in power sector.there is fall of 15%

Consequences:

Several states like Punjab,Delhi,Gujarat,Haryana and Tamil Nadu on verge of blackouts and frequent power cuts.

Though power shortages are already emerging, while the gap between available electricity supply and peak demand widened to more than 4GW. It is like that power plants will completely run out of fuels. Economic losses to industries and other sectors.

Measures:

— rationing of power on rotational basis

— allowing captive coal mining to sell 50%of its stocks to power plants

—- divert supplies from heavy users such as aluminium and cement plants to avoid power cuts

—- improving coal inventory at thermal plants they must keep the stockpiles for 22 days as mandatory

Concerns : coal bearing areas (acquisition and development) amendment bill 2021 would be passed in parliament in next session. Report says it will highly draconian to favour private player, creating an atmosphere of desperation. It will exempt private players from conducting social impact assessment, no land acquisition act applies, no need to take the concern of local population. The logic is peak demand was in July .