Current Energy Crisis Driven By Various Factors, Inter-Regional Competition For Gas - WEC
MOSCOW (UrduPoint News / Sputnik - 18th October, 2021) The ongoing energy crisis in Europe and elsewhere is not caused by geopolitics but is instead a product of multiple factors coming together, such as unexpected return of demand and regions taking market away from each other, Angela Wilkinson, the secretary general and CEO of the World Energy Council (WEC), told Sputnik.
Gas prices have been surging across the world due to demand outpacing supply amid an economic recovery after months of COVID-19 restrictions. To complicate matters further, Asia's shift from coal to gas creates additional competition among buyers.
"This isn't a geopolitical crisis, this is a combination of other factors. What's happening in Europe, or in China, or in Oceania, or in Latin America, or in North America, is a combination of a surprise in the return of demand where it's shifted to following the COVID-19 crisis as we come out of lockdown. More energy, more quickly, but different things may be expected in different locations.
"That's what happens if you rely on the market. 80% of gas contracts are covered by long-term contracts. Those are all being provided, they are all being satisfied, but what didn't happen is Europe didn't invest in a dust buffer during COVID it didn't think it needed one. On top of that, we've had weather. We are experiencing more extreme weather, we are more vulnerable to that, our systems need change," Wilkinson explained.
She went on to note that the current situation is unlike the energy crises of the past and is a new phenomenon, which demonstrates the importance of looking forward and learning to balance the issues of energy security, equity, and sustainability.