Global Energy Crisis
Only four days of Coal reserves left in India. Read to know more about the Global Energy crisis.
The world is facing an energy crisis as the supply of coal, natural gas and other energy sources fails to meet demand. The prices of natural gas, coal and other fuels have hit highs recently. The global economy is on the path of recovery as the countries lifts the virus induced restrictions and the rebounding of industrial activity.
Gravity of the Situation
Coal powers 70% of India's electricity generation. Now India's coal fired power stations have only 4 days of Coal reserves left and more than half the plants are on outages. Coal India Limited cut the supplies of fuel to metal industries to prioritize electricity generators. The electricity prices would rise in the coming months once the regulators give nods to pass on the cost to customers.
In the UK, several petrol pumps have run dry and many factories have shut in China due to coal supply shortages and power crunch, seriously affecting their manufacturing sector. The price of electricity has risen 250% since the beginning of the year in Europe. The supply chains are seriously affected and many companies are shutting down their manufacturing units unable to bear the high energy costs.
Factors behind the Crisis
The supply couldn't catch up with the bounce back in consumer demand led by economic recovery. The heavy rains at several mines and logistical issues caused a shortage of domestic supplies.
The shortage of truck drivers due to Brexit & Covid related restrictions in Britain caused the fuel crisis in the U.K.
Challenges ahead
Disruption in global supply chains.
Supply shortage could worsen if the world goes through a severe winter.
Rising fuel costs could give rise to inflationary pressures in the economy.
Dampens the demand recovery of Covid-19 hit economies.
This edition of econSHOT is proofread by Nandu S Nair . The thumbnail art is designed by Shobha Vasan.
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