Coal prices have risen to record highs in China. The energy crisis has been exacerbated by the cold weather in much of the country. This forces power plants to replenish their coal stocks.
Demand for electricity to heat homes and offices is expected to rise sharply this week as cold winds blow over from northern China. In some regions, temperatures can drop by as much as 16 degrees in the next two to three days.
Power shortages and record prices
Shortages of coal, high fuel prices and strong industrial demand that has bounced back from the crisis have led to widespread power shortages in the world’s second largest economy. At least 17 of the 30 regions in China have been rationing since September, forcing some factories to temporarily halt production.
For a ton of coal, 1669 yuan, converted 223 euros, had to be paid on the futures market. That’s the highest price ever. This year, prices on the futures market have risen by 200 percent.
Measures
Beijing has taken a series of measures to contain coal price increases. For example, the government has increased domestic coal production and restricted power to energy-hungry industries and other factories during periods of peak demand. Beijing has also repeatedly said that energy supplies are secured for this winter.
Nevertheless, the energy shortages are expected to persist until early next year. Analysts predict a 12 percent drop in industrial energy consumption in the last quarter of this year, if coal supplies are insufficient and governments prioritize residents’ energy needs.
China aims to be carbon neutral by 2060. The country is trying to reduce its dependence on coal in favor of wind, solar and hydropower. However, coal is expected to remain the main energy supplier for the time being.
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