In August 2021, the gap between electricity generation and consumption growth in China widened significantly
Despite China having relatively few COVID-19 cases and fewer movement restrictions, its economy is set to slow in 2021. Furthermore, the pace of contraction has accelerated over the past two months. The main reason for this slowdown seems to be frequent power cuts and blackouts, which have significantly affected the production of manufacturing units. was due to power crisis Problems with both demand and supply. As economies opened up, demand for finished goods increased, prompting China’s factories to produce more. This increased the demand for electricity, which China was unable to meet. In addition, due to the rise in coal prices, thermal power plants in China could not operate permanently and their supply was reduced. Also, due to stringent emission norms following the resolution to reduce greenhouse gases, mining production has been restricted and factories have been asked to scale back to achieve the target.
turn
The graph shows the Manufacturing Purchasing Managers’ Index (PMI) for China. A PMI that is above 50% indicates that the manufacturing economy is expanding; If it is less than 50%, it indicates that the manufacturing economy is shrinking.
Chart seems to be incomplete? Click To remove AMP mode
demand vs supply
The graph shows the year-on-year change in electricity consumption and production in China in 2021. In August 2021, the gap between growth in production and consumption widened significantly. Electricity demand and consumption are expressed in terawatt-hours.
Prices up, production down
The graph shows China’s coal futures price ($ per ton) on the right axis and coal production (in million tons) from China’s mines. Production has decreased sharply in recent months while prices have increased.
strict green norms
The graph shows the sector wise consumption of coal in China. The industry sector’s consumption decreased since 2014 due to China’s aggressive pressure to reduce emissions.
Source: National Bureau of Statistics of China, China Electricity Council, Zhengzhou Commodity Exchange, IEA
Read also: explained | How bad is the world’s energy crisis?
.