The world is at risk of having an unprecedented hot summer
According to Bloomberg news, a miserable summer is approaching as electricity demand skyrockets amid an energy crisis, inflation will push the global economy to its biggest test in decades.
Poverty and recession
In the past time, geopolitical conflicts, drought, supply chain disruption, shortage of inventory, pandemic… have caused many economies to suffer from rising commodity prices. But this summer will make the situation worse.
With global climate warming, this year’s summer is predicted to be even hotter than before, thereby boosting the demand for fans, air conditioners or power-consuming devices. Contrary to the cold winter when at least people can burn something to keep warm or limit exercise, summer cooling is not easy and they require much more energy.
Worse, rising energy prices and supply disruptions will leave many places without enough electricity, especially in poor countries. More than 1 billion people in Pakistan, Myanmar, Sri Lanka and India will face prolonged power outages due to heat, accompanied by health and poverty challenges, according to Bloomberg news agency.
In the US, the fact that 6 power plants in the state of Texas had to run at full capacity and then failed to work temporarily in May 2022 despite the beginning of the summer is the clearest proof of bad things to come. .
In China and Japan, the electricity situation is also quite stressful when there is no surplus. South Africa is notorious for its constant power cuts during peak seasons. Even in Europe, the Ukraine conflict is making its electricity grid difficult.
Bloomberg news agency warned that without enough electricity, people will face countless challenges. First, poverty would spread if production was halted because of a lack of electricity. Hot weather will make many people sick or even die.
Then the economy will also suffer when factories do not have electricity to operate and workers struggle to find ways to cool down in the summer.
In India, power shortages in many states are nearly as severe as 2014 levels, when the economy lost up to 5% of GDP because of the heat. This means India will lose nearly 100 billion USD of GDP if the power shortage continues throughout the year.
In addition, the increased demand for electricity will cause energy prices to go up, leading to inflation. For example, when power plants in Texas had to shut down, the wholesale price of electricity in Houston increased to over $5,000/MWH, 22 times higher than the average peak-hour electricity price. .
“Most dangerously, if large-scale blackouts occur in a time of turmoil like today, they could create a humanitarian crisis of food and energy on a scale not seen in decades.” Analyst Henning Gloystein of Eurasia Group said.
Situation of the main areas:
-USA: The supply of gas, the main fuel used by power plants here, is in short supply and the price is too high. A report by North American Electric Reliability Corporation (NERC) shows that the power supply of most of the US as well as parts of Canada will be under great pressure and people are urged to use energy savings.
In the most populous state in the US, California, the pipeline in 2021 has caused the state to restrict gas imports, leading to pressure on the electricity industry. In the state of Texas, the deterioration of the power grid causes people here to face frequent power cuts.
CoBank ACB economist Teri Viswanath said that degraded infrastructure and delayed maintenance due to the pandemic have caused the US electricity industry to face too many challenges.
“The US is going through a more severe power shortage crisis than any other industrialized country. About 70 percent of our power lines are nearing the end of their life,” Ms. Viswanath said.
-Asia: South and Southeast Asia near the equator is expected to be hardest hit this summer as rising temperatures stimulate demand for air conditioners. Power cuts have now occurred nationwide in a number of countries such as Pakistan, Sri Lanka and Myanmar, affecting about 300 million people.
In India, 16/28 states with more than 700 million people are experiencing power cuts for 2-10 hours a day. As a result, the government of this country had to suspend its environmental protection plan so that the coal mines could supply more goods to the thermal power plant.
In China, the previous policy of restricting coal mining has left many thermal power plants with insufficient reserves, leading to widespread blackouts in 2021. This year, officials have pledged not to let history repeat. , thereby requiring coal mines to increase production to a record level to supply thermal power plants.
However, the government still warns of electricity stress for heavy industrial zones in southern China because they are far from the central domestic coal mining areas, thereby having to depend on imported raw materials.
-Europe: Bloomberg reported that Europe rarely uses air conditioners in their own homes, but they still have to race to store gas due to the conflict in Ukraine. Because most of the thermal power plants here use gas, if Russia cuts off the supply, a number of countries may experience power outages.
In Norway, due to the dry season, hydropower plants have reduced capacity.
In France, the government has reduced nuclear power production in favor of green energy. This is the third year France has cut nuclear power, and they could put the economy under great pressure over the summer.
Returning to the oil and gas issue, some countries such as Spain, Britain, and France can find alternative sources of imports to Russia if a crisis occurs, but Eastern European countries such as Greece, Latvia or Hungary are dependent on oil and gas. into Russia, so it will be difficult if the supply is interrupted.
“I don’t think Europeans ever imagined such a scenario. This is unprecedented for today’s young generation. Without electricity there would be no wifi, no telecommunications signal, no electricity. convenience equipment and life will be pushed back by decades, a huge challenge for today’s young people,” said Rystad Energy expert Fabian Ronningen.
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