A closer look at the world’s energy crisis
The world is facing an energy crisis rooted in unpredictable gas prices, diminishing natural resources and challenges in recovering from the COVID-19 pandemic. As demand continues to rise, the global energy infrastructure has failed to provide energy resources to large parts of the worldwide economy.
While the exact reason for the energy crisis is a complex one, experts have placed a large portion of the blame on the pandemic. As the COVID-19 virus began spreading across the world, gas and electricity use drastically fell across countries. This was met with overproduction from oil and gas companies, which inevitably resulted in a sharp fall in prices. As the economy slowly recovered, wholesale prices continued to soar well past pre-pandemic prices, culminating in record-breaking prices over the last few months.
The conflict in Europe has exasperated the situation and pushed oil and gas prices to their highest levels in nearly a decade, causing countries around the world to rethink and diversify their source of energy import. Major economies such as the United States, Europe, India and China are currently being affected by the crisis, with the latter facing its worse energy crisis in decades.
China’s energy crunch
China is considered the world’s second-largest global economy, but the nation finds itself slowly recovering from its most severe energy crunch in decades. The Chinese government has worked hard to ensure that coal and natural gas prices remain steady – an endeavour that has proven to be a struggle within a tumultuous energy market. Flooding across China’s major coal-producing provinces, global demand for goods following the ease of the pandemic and conflicting CCP energy policies have all contributed to the “perfect storm.” Unsurprisingly, China’s energy-intensive economy has suffered as a result with factories and businesses in more than a dozen provinces having to contend with power rationing. In 2021, continued rolling blackouts were implemented across 22 provinces which often occur with no warning and that lasts for hours days. The Chinese government has attempted to tackle the problem by reportedly ordering its coal mines to boost production as the crisis continues to impact industrial production and as millions of citizens sit without power.
Rising energy costs in Europe
Europe has not been left unscathed by this energy crisis. The continent’s heavy reliance on Russian fossil fuels has proved problematic in recent months, with the European Commission’s RePower EU Plan aimed at reducing demand for Russian gas by two-thirds in 2022 and ensuring that Europe becomes independent by 2030. Soaring natural gas prices over the last few years have hit the pockets of end-users as an increase in global demand continues to affect energy bills. Colder and longer winters in Europe have seen consumers heating their homes for longer periods of time and a bad year for wind production and a phasing out of coal have all impacted the increased demand for natural gas. With natural gas representing a fifth of Europe’s electricity and accounting for around 45% of the energy used to heat millions of homes, the energy crisis has left many Europeans struggling to keep up with payments.
South Africa
South Africans are no strangers to rising energy bills and rolling blackouts. The past decade has seen South Africa’s energy infrastructure crumble with both scheduled and unscheduled power outages on the rise. In 2021, the country experienced 1130 hours of planned load shedding – the highest ever. Supply of coal to the coal-fired power plants, a skills shortage and increasing demand for electricity around the country have been attributed to South Africa’s energy crisis. Unfortunately, without additional capacity, the national power utility has revealed that there will be an electricity supply shortfall of 4000 – 6000 megawatts over the next five years. Attempting to mitigate this energy crisis is crucial to the country’s economic recovery as it continues to have a detrimental impact on businesses and their productivity. Countless industries have turned to the power of the sun to deal with this energy crisis, choosing to invest in solar power to help keep operations running. These industries are banking on solar energy with the aim of becoming 100% dependent on this source by 2025.
Electrifying change with RenEnergy
As we continue to tackle the reality of an unreliable power grid and rising energy costs, businesses are forced to seek new ways to ensure their business functions. Solar energy is considered the most sustainable and cost-effective method of generating power, with RenEnergy playing a key role in creating solar solutions that offer independence from a failing power grid. We evaluate the needs of your business and provide a bespoke, customised solution to your energy requirements. As your partner in power, we guide you through the process of making this adjustment so that your business is able to operate with independence and a robust, distributed grid that does not hinder business operations but adds value.