Energy prices including that of natural gas and electricity in Europe have soared to their highest levels in more than a decade since September due to the imbalance of supply and demand of energy. Electricity prices in France and Germany have risen by 36% and 48% respectively to reach a price of €160/MWh. Wholesale power prices in the UK have even gone straight up from £147/MWh to £385/MWh within a few weeks.

The increase in grid power price is the result of the more expensive natural gas. The recent energy shortage that engulfs worldwide has caused less available oil at UK’s fueling stations, and periodic power blackouts in Northeast China. The resulting public fear and market concerns towards the possible global energy crisis are heavily stoked by broad media coverage and rumors.

Is the global energy crisis imminent?

As the worsening global climate and ecological environment pose threats to the human society, all the countries around the planet is undergoing an energy transformation that supplants traditional energy source by new energy. The energy crisis this time unfolds the contradiction between the shortage of fossil energy and the transformation of the energy mix in the European continent. Indeed, many European countries are the forerunners of transitioning to green energy that their power mixes are shifting from coal-dominated to natural gas, offshore wind power, and nuclear energy. According to the European Power Generation Portfolio 2020 Annual Report, renewable energy generation accounts for 41% of all electricity in Europe of the year.

But the transformation can not be achieved overnight. Owing to the underdeveloped new energy sector and immature energy reserve technology, the world's reliance on fossil energy will remain unchanged in the short term. Now, natural gas as the cleanest fossil energy source compared to gasoline and coal has made it the focus of energy upgrading. In 2020, 19% of Europe's electricity is produced by natural gas, which thus becomes one of the main sources of electricity generation in Europe.

The current natural gas crunch in Europe is brought by the mounting demand for this sort of energy to perk up economic recovery and warm up the heating systems in Winter. Despite the supply-demand imbalance will inevitably drive up the price and also lay bare the instability of the in-progressing energy transition, the turbulence that occurs in Europe is just one of the barricades on their way to green energy because the real crisis has not come yet.

Photovoltaic has the most potential

This dearth of energy in Europe is more like a foretaste of what is to come in many other countries across the world, it also reminds us that we need to step up the layout of clean energy generation to become less dependent on fossil energy, and improve the power storage technology to balance the supply and demand of electricity.

Look into China, coal power remains the biggest electricity provider, which generated more than 5 trillion kWh electricity in 2019, accounted for 69% of China’s total power generation. But the share of coal power has declined significantly from 2010-2019, with the slowest compound annual growth rate among all energy generation types, while the share of clean energy is on the rise, according to China’s electric power energy generation structure from 2010 to 2019.

Compared to other types of clean energy, photovoltaic power generation, which features safe, eco-friendly, inexhaustible and expansive coverage, is considered the most important new energy in the 21st century. PV compound growth rate is riding high, with a CAGR of 135% from 2010 to 2019.

According to the data released by China Photovoltaic Association, the domestic installed PV capacity has reached 253GW by 2020, up 24% year-on-year; PV power generation is 261.100 billion kWh, up 16.60% year-on-year.

At the policy level, energy bureaus at all levels and local government introduce a slew of favorable measures to boost the development of photovoltaic. In addition, led by state-own enterprises, Shuifa Singyes Energy (00750. HK), Akcome Group (002610. SZ), Jolywood (300393. SZ) and other companies have entered the game to help promote the layout of distributed photovoltaic.

Meanwhile, China proposed to strive to achieve peak carbon dioxide emissions by 2030 and the goal of carbon neutrality by 2060, therefore the future development of clean energy will continue to speed up.

In brief, the energy crisis in Europe is only a setback and will perpetuate amid the global energy transition process. As for China, it will put out-out efforts to develop clean energy to reduce its reliance on fossil energy. And the policy-tilt photovoltaic power will have a glittering prospect.