Thu. May 26th, 2022

China is struggling through its worst electricity crisis in a decade as Europe suffers from gas shortages amid a rise in energy demand around the world.

The country lacks so much power that cities have been hit by disruptions with factories forced to close or otherwise open for a few hours a week.

The crisis, which began to bite two weeks ago, was caused by the cost of the coal peak as the economy reopened after Covid, meaning power plants were running at a loss and starting to shut down.

Analysts warn that factory closures will have a knock-on effect on global supply chains already in shambles after the pandemic, and have also revised estimates of China’s economic growth this year.

China suffers from an energy shortage triggered by rising coal costs as economies opened up after Covid, causing power plants to operate at a loss (file image)

China suffers from an energy shortage triggered by rising coal costs as economies opened up after Covid, causing power plants to operate at a loss (file image)

Power outages have been reported in southern Guangdong province, but are most severe in the northeastern manufacturing centers of Heilongjiang, Jilin and Liaoning.

Merchants have reportedly been allowed to light their premises with candles in the middle of a three-day blackout that recently also brought down mobile networks.

A further 16 provinces are believed to be rationing energy due to lack of supply, even though they have avoided full-scale blackouts.

In response, Shanxi – China’s largest coal-producing region – has ordered its 98 coal mines to increase their annual production capacity by 55.3 million tonnes.

Shanxi will also allow about 51 coal mines that had reached their maximum annual production level to continue producing.

In China’s No. 2 coal region, Inner Mongolia, 72 mines were told that they could operate at a higher capacity immediately, provided they ensure safe production.

‘The (government) coal task force must encourage miners to increase production without compromise, while the power task team must have the guarantee of the production companies to meet the winter demand for electricity and heat,’ the newspaper Inner Mongolia Daily reported.

‘It will help alleviate coal shortages but cannot eliminate the problem,’ said Lara Dong, senior director of IHS Markit.

‘The government will still have to use electricity rations to ensure the balancing of coal and power markets over the winter.’

Coal mines have been ordered to increase production to alleviate shortages, with rolling blackouts hitting some cities and factories forced to shut down

Coal mines have been ordered to increase production to alleviate shortages, with rolling blackouts hitting some cities and factories forced to shut down

It comes amid a global shortage of energy supplies, with India reportedly suffering from blackouts as Europe faces a gas shortage during the winter.

UK consumers have been warned that household gas bills could rise to £ 2,000 a year from 2022, while grocery prices are also likely to rise as manufacturing costs rise.

Meanwhile, National Grid has warned of an increased risk of blackout as supplies run out.

Industrial leaders called for ‘urgent action’ after National Grid said electricity supply would be strained amid the boom in natural gas prices

Government engineers say Britain has enough energy to meet demand and does not believe there will be winter outages – but the amount the country will have in reserve during peak times will be the lowest in six years.

It is the latest sign of a bleak winter outlook caused by dramatically rising inflation and a supply chain crisis threatening food shortages.

Global fuel shortages are another blow to a world economy that is just recovering from the coronavirus pandemic and threatening an expensive winter for consumers.

Bangladesh has bought two loads of liquefied natural gas (LNG) for delivery in October at record prices, as low stocks in Europe increase competition with Asia for supplies ahead of the winter.

‘It’s really hard to cope with such abnormal prices. At the moment, we have no choice but to buy to keep the economic activities going, says a government official from Petrobangla, which oversees LNG supplies.

Xi Jinping to commit China to reducing its CO2 footprint at next month's COP26 conference, but will not be pressured to give up

Xi Jinping to commit China to reducing its CO2 footprint at next month’s COP26 conference, but will not be pressured to give up

Bangladesh is reviewing leases of five oil-fired power plants nearing completion, despite its plan to go from oil to natural gas to electricity generation.

Even before the current energy crisis broke out, the world was far behind in its efforts to avert catastrophic climate change.

The United Nations estimates that global emissions will be 16 percent higher in 2030 than they were in 2010 based on the countries’ current promises.

Rising energy prices are raising tensions in Europe over the green transition, where EU countries are broken in their views on climate change policies.

Richer nations want to continue the pressure to run out of fossil fuels, while poorer ones who are concerned about the cost to the consumer are wary.

Britain’s energy regulator warned that energy bills are likely to rise significantly in April.

Hungarian Prime Minister Viktor Orban blamed the European Union’s efforts to combat climate change for the current crisis, saying Poland and Hungary would present a united front at the next EU summit.

Analysts have said that rising gas prices are the main driver of European electricity costs, while the rising cost of permits in the EU carbon market has contributed about a fifth of the rise in electricity prices.

.

Leave a Reply

Your email address will not be published.