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Explained | Why Europe and China are facing an energy crisis and how it affects India

The soaring prices of other fossil fuels added to the woes of consumers, not just in China and Europe but across the world.

September 29, 2021 / 04:48 PM IST
Representative Image (Source: ShutterStock)

Representative Image (Source: ShutterStock)

China ordered power rationing as far back as June. Factories in several provinces including Guangdong, an industrial hub, were directed to conserve power, which forced factories to reduce output and even temporarily suspend operations. The situation has worsened, the rationing is affecting households in certain provinces. Restrictions on the use of airconditioning and elevators have worsened to blackouts in many cities.

The soaring price of natural gas and shortfall in its supply were among the key causes of the energy crisis in China. Though the country, one of the worst emitters of pollutants, had increased its reliance on cleaner fuels in recent years, its dependence on coal continues to be very high.

Across Europe, the energy crisis has deepened due to a slow supply of natural gas and its rising prices. The power supply was also affected by the lower output of wind turbines in recent months, which led to higher reliance on fossil fuels. As power consumption rose during summer, inventory levels of natural gas fell to historic lows. The situation may worsen when winter sets in, as demand for natural gas to heat homes and water during the bitter winter months across Europe will rise. Fertiliser plants in Europe are among the industrial units most affected by shortages of natural gas, many were forced to curtail output as the crisis deepened.

The soaring prices of other fossil fuels added to the woes of consumers, not just in China and Europe but across the world. Petroleum and coal prices have surged in the past few weeks. Brent crude crossed $80 a barrel on Monday. Coal prices are nearly at their highest in 13 years.