The Chinese government has asked coal mines to produce “as much as possible” to increase output as winter approaches and alleviate the ongoing energy crisis.
The announcement by China’s National Development and Reform Commission (NDRC) comes after weeks of severe power shortages in the provinces, forcing the government to alternate power cuts during peak hours and some factories to shut down. production halt. The problem weighed on economic growth as industrial output fell.
Beijing pushed coal mines to cut output earlier this year as the country pursued ambitious targets to cut carbon emissions. But demand has increased for projects that require fossil fuels and have not had enough electricity to operate.
To solve the problem, China began to require coal mines to increase production. With Inner Mongolia, the country’s second largest coal-producing province, China asked dozens of coal mines to increase output this month.
Currently, the NDRC requires coal mines across the country to produce as much coal as possible in the last quarter of 2021 and prohibits the closure of coal mines. The commission said coal stocks have been steadily increasing since late September. In the northeastern provinces, where power shortages have led to rotating power cuts, there are now enough coal reserves to support use electricity within 24 days, an increase of 11 days compared to the beginning of October.
The government has also taken other steps to defuse the crisis. For provinces with high electricity demand, the government has increased electricity prices by 20%, narrowing the price gap between coal and electricity.
Power plants in China are not willing to ramp up production because coal prices are too high. And since Beijing controls electricity prices, manufacturers cannot simply raise electricity prices without government permission.
Officials are also relying on other sources of energy to deal with the problem. The NDRC requires power generation companies to use nuclear power, as well as solar, hydro and wind turbines to prevent power shortages in residential areas.
Severe power shortages in the world’s second-largest economy continue to pose a threat to global supply chains. Suppliers to major US companies like Apple have had to reduce their production levels to cooperate with electricity restrictions put in place by local governments.
The energy crisis is not just common in China. Indian officials have warned that key regions could face an “electricity crisis” as prices soar. In Europe, the price of natural gas is also skyrocketing.
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