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.
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