Industrial centers in China are facing the biggest energy crisis, with business outages in 20 of China’s 31 provinces. For the first time in history, electricity was cut off for ordinary consumers.
In key provinces of China, there is an acute shortage of electricity, and energy-intensive enterprises are shutting down. Aluminum, steel, textile and food factories are being closed. Companies involved in the production of components for Apple and Tesla are also forced to curtail production.
Due to rolling blackouts and blackouts on weekends, traffic lights were turned off on the streets of some provinces, provoking many kilometers of traffic jams, and residents of skyscrapers had to walk downstairs.
Experts explain what is happening by the growing demand for electricity and sharp surges in prices for coal and hydrocarbons, as well as the strict restrictions of Beijing to reduce emissions. The President of China has promised the world community that by 2060 the country will stop emissions of carbon dioxide and other greenhouse gases. Bloomberg suggested that before the Winter Olympics in the Middle Kingdom, President Xi Jinping decided to clear the sky over Beijing from winter smog and show the world community how he is fighting emissions. An insufficiently thought out step was taken – the companies were instructed to reduce their energy consumption and introduced restrictions on the use of coal.
Those who could not cope with the party’s assignment were summoned to Beijing for explanations, which only made the situation worse. In a number of places, frightened officials have simply introduced measures to curb electricity. Lights went out even in residential areas. Unfortunately, the pre-Olympic campaign coincided with an increase in energy consumption due to the imminent recovery of the industry from the pandemic.
In addition, there was a serious shortage of coal. China cannot provide itself with coal, the cost of which has grown steadily throughout the year and reached a record level of $ 210 per ton. All of Asia is now stocking up on coal and gas – the US Climate Prediction Center said there is a high likelihood that the La Niña weather phenomenon will again cause severe cold in Asia – from India to Japan.
Beijing demanded from the provincial authorities to speed up the purchase of coal from Russia, Mongolia and Indonesia. However, its cost is so high that many power plants suffer losses and are forced to reduce energy production. The demand for energy resources in 2021 grew in China by 15 percent at once. But the state cannot raise the price of electricity for its citizens – the country’s leadership fears that the energy crisis will undermine people’s confidence in the government.
An additional factor of the crisis in China is said to be the inconceivably increased price of natural gas, which is still in short supply. Asia has already contracted all supplies of liquefied gas from the United States, where they did not manage to build additional liquefied gas plants. The energy crisis has affected the whole of Europe, where the economy is also recovering rapidly, the situation will become more complicated as the winter cold sets in.
You cannot find salvation in oil, which is used to generate electricity. Analysts at Goldman Sachs predict that the price of a barrel will reach $ 90 by the end of the year. Even the most discerning economists admit that they were wrong in their initial calculations: the gap between the demand for oil and the volume of its production turned out to be larger than expected.
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