The Global Power Crisis



The power crisis which affected China caused drastic power cuts. Power is being rationed and factories across the country have reduced schedules or have been asked to shut down operations. The supply chain is slowed down. This was already under pressure due to transport blockages due to outbreaks of the corona virus. The power crisis started in March but caught public attention last week when China’s northeastern provinces suddenly cut off electricity in residential areas.

Coal prices have skyrocketed as the nation struggles to recover from COVID-19 and to meet rising demand and increasing orders from all over the world. The pandemic recovery from the United States and Europe put pressure on China’s manufacturing industry, heavy industry and transportation industry.

Meanwhile, China reduced hydropower production, leading to increased reliance on coal. On the other hand, many mines were shut down this summer after several fatal accidents. In an effort to improve energy efficiency, China has also closed inefficient or overcapacity coal mines.

Specialists say that despite the coming winter when mining and coal imports will increase to meet energy demands, this crisis should reduce China’s dependence on fossil fuels and lead to investments in renewable energy to avoid high fuel prices.

Northern European countries are also facing a worsening power crisis as well. As a result, the electricity prices in September were five times higher than a year ago. The global shortage of natural gas and coal hit these countries with declining water reserves that are curbing the region’s main source of electricity. The effect can be seen from power-hungry factories and miners, to college students struggling with their bills. Inflation is rocketing.

In more than a decade, Norway’s hydropower levels are at their lowest for this time of the year.

Sweden is trying to convince industrial users to save energy as the cold weather approaches. Oresundskraft AB, The Swedish utility company, will ask the industrial customers to be flexible in their consumption.

India is the latest country to face a serious energy crisis, with authorities warning its power plants are dangerously low on coal. Power shortages hit the economy, where the manufacturing sector contrasted for the first time since the start of the pandemic last month. The Indian government has instructed state energy companies to secure the supply of fossil fuels at all costs to prevent winter shortages. India aims to reduce its heavy dependence on imported coal.