The energy crisis in many European countries got even worse, impeding the process of economic recovery that the world is aspiring to in the wake Covid-19 pandemic crisis.
Some major companies announced their inability to face the repercussions of the electricity price hikes, despite its ability to generate 80% of its energy used in the manufacturing process.
This was confirmed by Aurubis Company, one of the largest copper producers in Europe.
The company added that the soaring energy prices have negatively affected the profit margins of some countries such as Britain, where many fertilizers companies had been forced to shut down.
In Norway, the production of ammonia plants has been stopped, which confirms that the situation in the continent is not promising.
According to a report published on the Bloomberg website, Europe, the United States and Asia have witnessed a significant rise in energy prices as a result of the global economic crisis caused by the COVID-19 pandemic.
The gas prices in Europe have almost tripled, while energy prices have doubled during the current year. This impeded the back-warding economic activity due to the pandemic repercussions.
Russia has been controlling the gas exporting process to Europe. This is with obtaining new supplies through the unfinished “Nord Stream 2” pipeline linking Russia and Germany.
According to Bloomberg, Europe gets a lot of Russian gas. In addition, the low domestic production and the possibility of closing the giant “Groningen” gas field in the Netherlands three years ahead of its schedule, makes the European continent more vulnerable to the fluctuations of the global gas market.
The current crisis is not only limited to the high demand in Europe and Asia. In Norway, the gas supplies have been disrupted this year due to heavy maintenance work after the effects of the pandemic as well.
On the other hand, European buyers are looking to the LNG market to make up for the shortage, which increased the competition with buyers in China and Japan. As a result, the prices of the LNG have increased. In addition, the reduction of carbon emissions that have caused utilities to pay near-record prices to buy the "reduce pollution" permits necessary to continue producing energy from fossil fuels.
The European energy crisis is not only limited to the shortage of natural gas imports. It also extends to the rise in coal prices as well. The European energy companies have turned into coal when gas prices increased and alternative energy sources. In addition, the increase of prices in LNG is due to the shortage of it, and the lack of storing it.
Contributed by Salma Elnahhas