An Expanding Global Energy Crisis

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The ongoing energy crisis is challenging the design of many power markets globally.

The Power Sector's Policy Responses to the Global Energy Crisis

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Europe's energy crisis has been in the headlines for most of 2022. Owing to the gas supply crisis, worsened by low nuclear availability, European power users face exceptionally high power bills this winter.

Forward And Day-Ahead Prices in Germany

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Asia-Pacific economies are facing an energy crisis that threatens to worsen in coming months and reach historic proportions if the Russia-Ukraine war continues. The magnitude of the crisis varies in different countries but broader trends are identical – high fuel prices, supply disruptions, domestic energy shortages, blackouts, involuntary demand destruction, calculated energy rationing, depleting forex reserves and market volatility.

Prices

Asian spot LNG prices for the summer of 2022 are at their highest level for this time of the year. The Platts JKM for August was assessed at $36.888/MMBtu June 24, S&P Global Commodity Insights data showed.

Trade flows

European gas fundamentals are still largely dictating global spot LNG prices and as LNG continues to replace piped gas supply into the region, Asia will lose LNG cargoes to Europe and see lower inflows for the rest of this year compared to previous years.

Asia-Pacific Economies Grapple With Ballooning Energy Crisis

Platts Market Data – Energy Transition provides access to the full breadth and depth of our energy transition market data, including contract price assessments.

U.S. coal exports rose in the second quarter as demand and prices remained elevated amid a global energy crisis.

Shipment volumes increased 14.8% quarter over quarter to 21.6 million tonnes and climbed 4.6% year over year, according to S&P Global Market Intelligence data.

The global coal market has become tight as several countries shunned supplies from Russia following its Feb. 24 invasion of Ukraine. High natural gas prices and the lack of new project investments have also pushed up coal prices. However, rail transportation constraints, weakening demand in China and fears of a global recession pose risks to the sector.

Asia and Europe received the most coal shipments from the five largest ports in the U.S.: Norfolk, Va.; Baltimore; New Orleans; Mobile, Ala.; and Seattle. Other destinations for U.S. coal exports included South America and Africa. All coal shipped through Seattle during the second quarter went to Asia.

Q2'22 Coal Export Destinations for Top 5 Ports (000 Tonnes)

As curtailed Russian gas supplies and record-low nuclear availability raise the specter of potential power blackouts in Europe, countries are allowing more coal-fired power generation, setting energy price caps and triggering emergency gas plans.

Citing technical faults, safety concerns, and sanctions, Russia's technical regulator reduced the operational capacity of the Nord Stream pipeline by 60% on 16 June. This has reduced pipeline deliveries of Russian gas to the EU by about 35% to unprecedented low levels.

Saying what many were thinking, German minister of economy and climate Robert Habeck has called the technical issues "a pretext" and accused Russia of seeking to drive up prices and destabilize the gas market.