• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 10 days Does Toyota Know Something That We Don’t?
  • 4 days America should go after China but it should be done in a wise way.
  • 9 days World could get rid of Putin and Russia but nobody is bold enough
  • 2 hours "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 11 days China is using Chinese Names of Cities on their Border with Russia.
  • 21 hours Even Shell Agrees with Climate Change!
  • 2 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 12 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 13 days Putin and Xi Bet on the Global South
  • 13 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
Metal Miner

Metal Miner

MetalMiner is the largest metals-related media site in the US according to third party ranking sites. With a preemptive global perspective on the issues, trends,…

More Info

Premium Content

China Can’t Keep Up With Surging Energy Demand

  • Following a spat with Australia late last year, Beijing banned coal imports from there. As a result, China is left with far from ideal alternatives
  • Beijing may choose to reduce power output, with all the consequences for reduced GDP growth and output

Much is being made of Beijing’s efforts to meet its environmental emissions targets — the country states it will hit peak emissions before 2030 and carbon neutrality by 2060 — and its restricted steel and aluminium production. But a recent Reuters post by John Kemp suggests output is being impacted more by a widening electricity crisis than by enforced shutdowns to meet environmental goals.

China’s energy crisis

Kemp explains that China is in the grip of a severe shortage of both coal and electricity. Coal output has not kept up with rising electricity demands from a rapidly recovering economy.

China’s electricity generation increased by 616 Terawatt-hours (13%) in the first eight months of 2021 compared with the same period last year. The largest rises came from the service sector and primary industries.

However, most of the increase has been supplied by thermal generators, principally coal-fired power stations, Kemp explains. Those generators increased output by 465 TWh (14%) in the first eight months.

Related: Is This The Most Balanced Oil Major?

Other power sources, such as hydroelectric output, have actually fallen slightly this year due to water shortages. Unfortunately, nuclear in China is a tiny fraction of power generation, dwarfed even by renewables like wind and solar.

Surging demand

While authorities’ desire to meet provincial targets for reductions in energy consumption is a contributing factor in crimping power generation, demand outstripping the electricity industry’s ability to supply is causing rationing and enforced blackouts.

The main culprit is a lack of coal supply. Domestic mines have failed to increase output sufficiently to meet rising demand. Domestic coal supply is up 6%, figures supported Reuters say by rail freight data. Meanwhile, power production is up 14% so far this year, which has drained coal inventories, pushing up prices to potentially loss-making levels and sucking in imports. Imports, though, are struggling.

Following a spat with Australia late last year, Beijing banned coal imports from there. As a result, China is left with far from ideal alternatives.

Russia must first meet contractual demand from Europe, Japan, and South Korea. Indonesia’s export shipments have been curbed by rainy weather in the last couple of months. Mongolia’s exports, mostly by trucks, are small.

The Sydney Morning Herald speculates a U-turn on the ban is imminent as the only way to resolve the crisis.

Such pragmatism may cut across national pride. Following this month’s announcement that Australia is joining the U.S. and U.K. in developing a fleet of nuclear-powered submarines, ostensibly to counter China, the climate is not conducive for an early detente.

Beijing may choose to reduce power output, with all the consequences for reduced GDP growth and output, rather than be seen to climb down.


As such China’s reduced aluminum output looks like it will be an ongoing feature for this winter, at least, sustaining primary imports and crimping semi-finished product exports.

By Stuart Burns via AG Metal Miner

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment
  • Kay Uwe Boehm on October 04 2021 said:
    What china pays for gas & coal decades contracts ? Germany stopped coal for bats and CO2 reduction also own fracking gas reserve because of unrecognizable micro quakes less 2.0 and danger for ground water also all nuclear power turned off until 2022.
    Most gas in germany buyed in norway about 50% and LNG over holland all together 36 LNG terminals in europe.also in Vladivostock & Yamal and new pipeline up to aserbaidchan.
    New aggrement for mediterian sea gas pipeline of Israel, Turkey, Greece etc.
  • Godfree Roberts on October 05 2021 said:
    Worse fates can befall a country than having its economy outgrow its energy infrastructure.
    China's GDP will grow faster this year than every in its history–or world history for that matter.
    Blistering growth, under a carbon neutrality deadline will cause hiccups, no doubt about it.

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News