Electric production is strangled in many large world economies
Global power grids are about to face their biggest test in decades with electricity generation strangled in the world’s largest economies.
War. Drought. Production shortages. Historically low inventories. And pandemic backlash. Energy markets across the planet have been put through the wringer over the past year, and consumers have suffered the consequences of soaring prices. But, somehow, things are on track to get even worse.
Blame the heat. Summer in much of the Northern Hemisphere is a typical peak for electricity use. This year, it’s going to be sweltering as climate change tightens its grip. It’s already so hot in parts of South Asia that the air temperatures are blistering enough to cook raw salmon. Scientists are predicting scorching months ahead for the US. Power use will surge as homes and businesses crank up air conditioners.
The problem is that energy supplies are so fragile that there just won’t be enough to go around, and power cuts will put lives at risk when there are no fans or air conditioners to provide relief from searing temperatures.
Asia’s heatwave has caused hours-long daily blackouts, putting more than 1 billion people at risk across Pakistan, Myanmar, Sri Lanka and India, with little relief in sight. Six Texas power plants failed earlier this month as the summer heat just began to arrive, offering a preview of what’s to come. At least a dozen US states from California to the Great Lakes are at risk of electricity outages this summer. Power supplies will be tight in China and Japan. South Africa is poised for a record year of power cuts. And Europe is in a precarious position that's held up by Russia — if Moscow cuts off natural gas to the region, that could trigger rolling outages in some countries.
“War and sanctions are disrupting supply and demand, and that’s coupled with extreme weather and an economic rebound from Covid boosting power demand,” said Shantanu Jaiswal, a BloombergNEF analyst. “The confluence of so many factors is quite unique. I can’t recall the last time they all happened together.”