China’s Energy Crisis : Why The Lights are Going Out

China is experiencing an energy crisis.

Eight out of the country’s 34 provinces have suffered electricity shortages in the past month. This has reduced output in some industries.

A large portion of China’s electricity comes from coal and gas fired power plants. The shortfall in supply has three main causes…

  1. The global spike in coal and gas prices.
  2. China’s reduced domestic production.
  3. The ban on imports of coal from Australia.

The reduction in domestic generation from coal is largely to meet carbon reduction targets. Xi Jinping wants to get China carbon neutral by 2060. Some experts predict this will require $15 trillion in green investment.

The Chinese government imposed a ban on coal imports from Australia after Australian Prime Minister Scott Morrison called for an independent investigation into the origin of Covid-19. China has switched to Mongolia for its imports, but Australian coal is considerably cheaper.


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