Jakarta, CNBC Indonesia – The world is facing a new problem, namely the energy crisis. A number of countries in Europe reported that this incident was getting worse, it could even threaten to have no electricity during the winter.
This is because the price of natural gas continues to increase. For example since January the price has gone up 250% and the regional benchmark has jumped 500% over the year.
This price increase was due to high demand and limited supply. Yet the region is so dependent on the use of gas that it has started to abandon coal due to the pressure towards ‘clean energy’.
Russia is one of the largest gas suppliers in Europe, accounting for 43.4%. President Vladimir Putin spoke of a possible increase in supply.
“Let’s think about the possibility of increasing supply in the market, only we need to do it carefully,” Putin said, quoted by the Financial Times, Saturday (9/10/2021).
For information, Europe is dependent on imports of natural gas coming from outside the block due to declining domestic production. A report by the statistics office Eurostat says Europe will have to import nearly 90% of its natural gas from outside the bloc by 2019, one of which will come from Russia.
Europe is also trying to find a solution to this problem. Launching Reuters, one of the proposals contains 27 EU countries to create strategic gas reserves in order to increase gas supply.
The idea is being analyzed by the European Commission. While four countries are said to be in favor of the proposal, there are still countries that are wary of implementing major market reforms to address what might be a near-term price spike.
In the UK, entrepreneurs are starting to complain especially when energy costs are getting very high. The UK Energy Intensive Regulatory Group (EIUG) has asked regulator Ofge to address the price hikes.
“The issue is not only whether gas and electricity supply will be available but also one of them is related to price. Energy-intensive industries may be excluded from the market,” the EIUG said in a statement as reported by Reuters.
Electricity prices this winter will exceed last year’s as gas prices rise. The current home electricity tariff has reached 475 pounds or Rp 9.3 million.
Not only Europe, China also suffered the same fate. The local government even had to release Australian coal stocks to address this problem.
“Australian coal that was stuck in Chinese ports began to be released at the end of last month. Although some of the cargo was Australian coal which was previously shipped via India,” said a trader in eastern China, quoted by Reuters.
Canberra-Beijing relations were strained by Australia’s accusations that China was responsible for the Covid-19 pandemic. As a result, this also has an impact on trade aspects and makes China unwilling to buy coal from Australia, which was previously the country’s largest supplier.
(roy/roy)
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