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Winter is also coming

by Sensix Team

The other day we read a piece of news according to which: “E.ON will stop the gas supply in Timisoara, due to debts and the explosion of prices, cumulated with the delays of some national measures. This means that 50,000 households, schools, and hospitals could run out of hot water and heat.” In the meantime, some even did. We woke up in the middle of an energy crisis and we can’t help but wonder: how did we get here?

The big whys

It’s a perfect storm caused by a combination of causes: huge demand, declining production, low stocks, climatic conditions. Or, as panorama. ro puts it: “The Middle East is refusing to increase oil production to keep prices high. Russia is once again blackmailing a vulnerable Europe with a drastic gas shortage. China no longer buys coal from Australia (which wants Beijing to be punished for the pandemic), so it “swallows” coal from other major exporters. In this energy crisis, Romania is going through its first winter on the free market.”

In 2020, global energy consumption fell by 4.5%. In 2021, gas and electricity have become more expensive. Why?

  1. consumption of goods has increased exponentially in the last year, which means that production and transport are working continuously;
  2. an unprecedented deficit in maritime transport;
  3. higher handling and transport costs.

The coal

China is the largest consumer of coal in the world. Eastern China produces more than a third of the country’s coal needs, but recent floods in the Shanxi region led to the closure of several dozen of mines. The rest significantly increased annual production and also the price. Thus, the price of coal is five times higher than a year ago.

The oil

IEA, International Energy Agency, recently warned that demand for crude oil is expected to rise significantly, which will inflate the inflation rate and slow the global economic recovery. On the other hand, the oil stocks of the OECD (Organization for Economic Co-operation and Development, which consumes 40% of the world’s primary energy) are at their lowest level in six years.

The coal & oil

Demand has risen, but supply has not. The European Union relies on energy imports because it wants to become climate neutral in 2050 and then gives up domestic production of fossil fuels, especially oil and coal: in 2020, for example, coal production was 46 million tonnes, 80% less than the 277 million tonnes in 1990.

The natural gas

Europe consumes 14.2% of world production but produces only 5.7% of it. Therefore, it remains the largest importer and dependent on Russian gas. As coal is phased out, many countries use natural gas as a transition resource to green alternatives. So in addition to heating and cooking, gas is also being used to generate electricity.

The end and the beginning

Coming to a conclusion or the end of this blog post, at least, EU is facing/we are facing a serious energy crisis this winter, due to two main causes: the prospect of natural gas shortages and the explosive rise in energy prices. This year, the price of natural gas has multiplied several times, causing energy bills that are increasingly unbearable for many household and industrial consumers. Energy poverty is on an unprecedented rise, disproportionately affecting everyone.

So, it’s not our best moment. But maybe, just maybe, it’s the perfect time to understand the importance of ensuring a constant production of renewable energy. It’s the only way to avoid such crises and to protect consumers from violent oscillations such as those we are witnessing now, experts say.

Sources and resources:

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