China has been hit by a power shortage compelling at least 21 provinces and local governments to
ration power to enterprises and residences to limit and manage electricity demand. The provinces
include: Hunan, Guangdong, Hebei, Anhui, Shandong, Tianjin, and Liaoning. Last month, China's
top economic planning agency the National Development and Reform Commission (NDRC),
criticised the “energy consumption intensity” of nine provinces – Guangdong, Jiangsu, Yunnan,
Fujian, Shaanxi, Guangxi, Ningxia, Qinghai and Xinjiang – for actually increasing their energy
use instead of reducing it. Following the warning, the nine provinces stepped up their efforts to cut
power, with little impact felt by customers. NDRC spokeswoman Meng Wei said “An additional
10 provinces failed to meet their progress targets in the reduction rate of energy consumption
intensity, and the situation of national energy saving is very severe.” Caixin explained that this
was mainly due to the relatively strong demand for electricity, but the shortage of power generation
fuels such as electric coal and gas, the price continues to rise, the willingness of thermal power
plants to generate electricity has declined, and there are maintenance shutdowns. On September
23 the domestic media reported that Zhejiang had ordered some 160 enterprises in energy intensive
industries to suspend production until the end of the month. Yunnan and Jiangsu authorities
ordered similar production restrictions and suspensions this month. There have, however, been
objections to power rationing. On September26, the People’s Daily criticised local officials for
using forceful means to achieve their annual environmental performance goals, suggesting they
should not take a “one-size-fits-all” approach to curbing power usage. The Zhejiang energy bureau,
agreed with the criticism, saying it must try to avoid “simplification”. Liu Shijin, former vicepresident at the Development Research Centre of the State Council, also hit out at provinces for
being too bureaucratic in advancing emissions reduction targets, which would hurt short-term
economic growth.
(Comment: Foreign Policy (September 29) observed that fifty-six percent of China’s power comes
from coal, and thermal coal prices have more than doubled around the world after the initial shock
of the pandemic. The Chinese ban on Australian coal hasn’t helped. In most countries, these prices
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would be passed on to consumers, but Beijing tightly limits the maximum price of electricity—
causing generators to reduce their supply or shut down rather than lose money.)
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