Jakarta, CNBC Indonesia – China continues to take steps to ease the volatile energy crisis there. However, it turns out that measures such as fuel rationing are not very effective.
The shortage of coal and gasoline is increasingly being highlighted in China, especially as Beijing’s President XI Jinping reaffirmed his commitment to environmental targets that were deemed too ambitious ahead of the COP26 summit.
President Xi Jinping wants China to achieve carbon neutrality by 2060, with emissions peaking by the end of the decade. In fact, last year China accounted for more than half of global coal consumption.
Besides China, Europe is also experiencing an energy crisis. In Europe, the soaring price of natural gas has prompted more utilities to turn to high-carbon coal to generate electricity. This is just as Europe is in full swing trying to stop the use of polluting fuels.
Although European coal and carbon prices have also soared in recent months, both have slowed the surge in gas prices. This causes the short-term marginal cost of switching to using coal to generate electricity.
The benchmark carbon price allowed by the European Union’s Emissions Trading System (ETS) has almost doubled since the start of this year. Meanwhile European coal futures also more than doubled.
On the other hand, gas-fired power plants are cheaper to operate than coal-fired power plants due to the added cost of carbon emissions. But that changed around July this year.
High gas prices have also prompted a switch to oil in the UK, where coal accounts for just 2% of the electricity mix, with the country facing tight power supplies this winter. Britain itself is now facing the threat of industrial bankruptcy due to lack of energy.
Apart from China and Europe, Japan, which is known for its energy savings, also feels the energy crisis. In Japan, electricity prices have risen to their highest level in nine months in recent times due to rising global prices for oil, liquefied natural gas, and coal.
Japan’s electricity price hikes have also revived history last winter, when prices hit record highs. At that time, Japan’s power grid nearly failed in the country’s worst energy crisis since the Fukushima disaster.
As in last winter, rising costs for LNG and coal pushed up electricity prices in Japan. With cooler temperatures just weeks away, major Japanese companies have taken steps to prevent a similar crisis.
“LNG inventories have increased and are now above 2.4 million tonnes, about 600,000 tonnes more than the four-year average for this year,” Japan’s Ministry of Industry said.
Japan has no choice but to expand renewable energy and promote the resumption of nuclear power plants to achieve this major reduction and this is admittedly not an easy step.
Since the Fukushima nuclear accident in 2011, the number of nuclear power plants in Japan has decreased from 54 to 33. Only 10 have been revived.
There are nine years left until the 2030 deadline. A solar panel site can be built in the short term, but land is limited.
(hps / hps)
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