- Recovery from COVID-19 has led to surge in vitality demand
- EU publishes a record of steps to sort out excessive vitality costs
- Russia, Europe tussle over Nord Stream 2 pipeline
- Top coal-consumer China grappling with vitality disaster
- Green vitality wants $4 trln funding by 2030, IEA says
MOSCOW/BRUSSELS/BEIJING, Oct 13 (Reuters) – President Vladimir Putin mentioned on Wednesday Russia was not using gas as a weapon and was able to help ease Europe’s vitality crunch as the EU referred to as an emergency summit to sort out skyrocketing costs.
Energy demand has surged as economies have rebounded from the pandemic, driving up costs of oil, gas and coal, stoking inflationary pressures and undermining efforts to chop the usage of polluting fossil fuels within the battle in opposition to world warming.
China, the world’s second largest economic system and its largest greenhouse gas emitter, has boosted coal output and imports, as home coal costs have hit report ranges and energy stations have struggled to maintain the lights on in properties and factories.
The vitality crunch has amplified Wednesday’s name by the International Energy Agency (IEA) for tripling funding in renewables to regular markets and battle local weather change.
Europe’s gas squeeze has shone a highlight on Russia, which accounts for a third of the area’s provides, prompting European politicians guilty Moscow for not pumping sufficient.
Putin advised an vitality convention in Moscow that the gas market was not balanced or predictable, significantly in Europe, however mentioned Russia was assembly its contractual obligations to provide shoppers and was prepared to spice up provides if requested.
He dismissed accusations that Russia was using vitality as a weapon: “This is just politically motivated chatter, which has no basis whatsoever.”
The European Union has not requested Russia to extend provides of gas to the bloc, a European Commission official advised Reuters.
Russia and Europe have been embroiled in a dispute over a new pipeline, Nord Stream 2, to provide Russian gas to Germany. The pipeline is constructed however awaits approval to begin pumping, amid opposition from the United States and a few Europeans nations that concern it should make Europe much more reliant on Russia.
Some European politicians say Moscow is using the gas disaster as leverage, a cost it has repeatedly denied.
The European Commission outlined measures on Wednesday that the 27-nation EU would take to fight the vitality disaster, together with exploring a voluntary possibility for international locations to collectively purchase gas.
Ministers from EU international locations maintain a unprecedented assembly on Oct. 26 to debate the worth spike.
“The only way to fully decouple gas from electricity is no longer to use it to generate power,” EU vitality coverage chief Kadri Simson mentioned. “This is the EU’s long-term goal, to replace fossil fuels with renewables.”
The Paris-based IEA mentioned the world needed to make investments $4 trillion by 2030 in clear vitality and infrastructure – triple present ranges – to attain web zero emissions and restrict world warming to 1.5 levels Celsius by 2050, the goal of the 2015 Paris local weather accord.
“The world is not investing enough to meet its future energy needs,” it mentioned in a report, printed earlier than the United Nations COP26 local weather change convention in Glasgow, Scotland, which begins on Oct. 31. learn extra
As renewables have didn’t fill gaps amid surging demand, oil and gas costs have roared larger.
The Organization of the Petroleum Exporting Countries trimmed its world oil demand forecast for 2021 however mentioned surging gas costs may imply prospects swap to grease.
Benchmark crude was buying and selling near final week’s greater than three-year excessive above $84 a barrel.
Putin mentioned that oil costs may attain $100 a barrel. “This is quite possible,” he mentioned. “We and our partners at OPEC+ are doing our utmost to stabilise the market.” learn extra
The benchmark European gas worth is up greater than 350% this 12 months, buying and selling above $31 per million British thermal models (mmBtu) on Wednesday, though down from final week’s spike above $52.
“Current prices are above fundamentally justified levels, should remain volatile and could still reach $100/mmBtu or above this season if the weather gets very cold,” Citi financial institution mentioned as it additionally raised its forecast for European and Asian benchmark gas costs for the fourth quarter by about $3.
The United States was additionally prone to really feel the ache, in line with the Energy Information Administration, which warned on Wednesday that it might price extra to warmth U.S. properties this winter. learn extra
The European Network of Transmission System Operators for Gas (ENTSOG), which screens safety of provide, mentioned a chilly winter in Europe would require a rise of gas imports by about 5% to 10% in comparison with earlier most ranges.
“We’re reaching out to trade partners to discuss if it’s possible to increase their deliveries in the market,” EU vitality commissioner Kadri Simson mentioned.
The Commission expects costs to stay excessive till April 2022. learn extra
In China, the most-active January Zhengzhou thermal coal futures touched a report excessive of 1,640 yuan ($254.54) per tonne on Wednesday, up greater than 190% to this point this 12 months.
Local governments in high Chinese coal producing areas Shanxi and Inner Mongolia ordered about 200 mines to spice up output, however rain flooded 60 mines in Shanxi. China’s coal imports surged 76% in September.
Seeking to ease the ability crunch, Beijing mentioned it might enable energy crops to cost business prospects market-based costs, breaking with a coverage that had allowed trade to lock in fixed-price electrical energy offers with suppliers.
($1 = 6.4430 Chinese yuan renminbi)