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| Edi Rama talking about the new world energy crisis, October 3, 2021 |
The full speech of Edi Rama, October 3:
Dear fellow citizens, the shock wave of another natural disaster, this time combined with geopolitical factors and trade maneuvers, is coming to Albania.
It is neither an earthquake, nor a virus, nor a flood, and for the glory of God, does not threaten human life. But in economic and social terms there is negative energy that can have shocking effects on the lives of families, businesses, society.
This is the extraordinary energy crisis, which has just begun to give its extremely disturbing signs in the major world markets, starting from China and South Korea, to America, to Great Britain and to the space of the Union. European, and to neighboring countries, such as Italy and Greece.
The temperature of this crisis is rising everywhere, now for hours not days, while the decrease of weather temperatures is approaching along with winter and with the natural increase of the need for heating.
Just when hopes for a return to normalcy, after the tragedy caused by the pandemic, to which humanity is paying the cost of the human losses of a world war, have risen sharply, thanks to mass vaccination and high rates of economic recovery, this new crisis, it forces us to make a determination in the face of a new ordeal, as strong as an earthquake and a pandemic, economically and socially.
The phenomenon of the dizzying rise in the price of gas and carbon in all international markets, as well as the strong upward trend in the price of oil, accompanied by a general rise in prices of daily consumer goods, stand today before all countries, like the silhouettes of an enemy army on the horizon of the harsh winter that the world has ahead.
The exponential growth of consumer demand, after the opening of the economy as a result of the control of the pandemic, has exponentially increased the demand of the energy-producing industries, putting in very serious difficulties even the economic colossi of the planet, from China, where the lack of energy capacity needed to meet that demand threatens nearly half of that country’s industrial capacity, to Europe, where high demand and insufficient gas supply have forced governments to face dizzying growth prices and warn, even the policy of restrictions on electricity supply.
High rates of pandemic recovery and an oversupply of energy have pushed up gas prices by about 250 percent and carbon prices by about 80 percent, while oil prices have jumped from about $ 60 a barrel in August 2021, to about $ 80 at the moment we are talking about and according to today’s projections, the price could reach $ 100 per barrel by the end of the year.
For Albania, the average annual purchase price of energy from imports has almost tripled compared to last year.
On the HUPX stock exchange, electricity was traded at an average of 39 euros / MWh last year, while this year this price has reached the figure of 110 euros / MWh, marking an increase of 182%.
For many financial researchers and analysts, this energy crisis is different. It is mainly related to climate change and efforts to curb it, but also to a combination of other factors.
A series of extreme weather events, with unusual seasonal features, have impacted both demand and supply for gas. The extremely cold winter of the beginning of the year in the northern hemisphere, Asia, or even the extreme frosts in the US, contributed to the drastic reduction of liquefied gas exports during February.
Cold springs and floods in Europe, automatically increased the demand for gas for heating.
Similarly, extreme heat waves during the summer in China, Europe, and the US, increased the demand for refrigerant gas.
Energy production from alternative sources has been reduced. Wind power plants in Europe have produced far less energy than average levels.
Consequently, the lack of alternative energy production has led to increased demand and prices for gas and coal.
The economic recovery after the pandemic has been strong in both Europe and Asia, increasing energy demand from household consumers, factories, and enterprises in general.
Despite the increase in demand and base prices in the markets by 250%, Russia has not increased its supply to the European Union, limiting itself only to meeting long-term contractual obligations.
Finally, the policy itself to address climate change has had an indirect impact on price increases.
In Britain, 15 million households are expected to be negatively affected by rising energy prices.
In Italy, the government has notified citizens of a 40% increase in their bills in the coming months.
Also in Bulgaria, prices have risen by 72% since the beginning of the year, bringing the average energy price to 133 euros / MWh.
This whole panorama of the energy situation, with only some of the examples far and near us, is valid to create a general idea of this crisis, where we want it or not, Albania, like all other countries, is involved and forced to face without being able to avoid this global storm.
Experts think that despite the possible systemic implications that the extraordinary energy crisis could have on all countries, the culmination battle will take place and be decided, by the end of the first half of next year.
And the main responsibility and duty of the Albanian government are to protect necessarily and however much, as much as possible, from the blow of this new disaster, the neediest strata, family consumers, as well as small business; fixed in this order of priorities.
I now believe that all of you, dear fellow citizens, have the evidence that we neither fall nor give up in the face of serious challenges of this nature.
Have full faith, as I have unwavering faith, that just as we overcame the earthquake and the pandemic, we will also overcome this great challenge with energy, and rest assured that the endless ruins of the earthquake, and just as the attack of the Invisible Enemy did not find us unprepared, so it does not find us unprepared, nor can this extraordinary crisis end us.
Unfortunately and regardless of our desire or will, these last years became like that word, "from war we come to war we go", but as we came out stronger from the earthquake, and as we are coming out stronger from the pandemic, what show kindergartens, schools, homes, new neighborhoods under reconstruction, as shown by the figures of economic recovery rates, after the dramatic closure of the economy, so we will emerge from this new natural disaster combined with geopolitical factors and trade maneuvers that we do not have them in hand. No fear, no uncertainty, only determination, patience and faith, that the best will be done and Albania will continue to aim at the peak we have set for ourselves, in the challenging journey of this new decade where we have just entered.