Anasayfa / Ekonomi / Power Outages in China: What Causes Power Outages in China?

Power Outages in China: What Causes Power Outages in China?

China is suffering from a serious power shortage, with millions of homes and businesses in power outages.
Suspensions are not uncommon in the country, but several factors have contributed to the perfect storm for utilities this year.
This problem is especially acute in the industrial centers of northeastern China as winter approaches and can affect other parts of the world.
Why did China suffer from an energy shortage? In the past, countries struggled to balance supply between electricity and demand, often threatening many Chinese states with power outages. The problem is especially acute during peak summer and winter consumption.
But this year, several factors have come together to make the problem particularly serious.
After the pandemic, as the world reopens, the demand for Chinese products will increase, and the factories that cause it will require much more energy.
The rules Beijing introduced to make the country carbon-neutral by 2060 slowed coal production, even though the country still relies on more than half of its electricity to coal.
And as electricity demand increased, the price of coal rose. However, due to the tight control of electricity prices by the government, coal-fired power plants are not ready to be lost and many power plants are significantly reducing production.
Who will be affected by the interruption? Homes and businesses suffered power outages as electricity was distributed in different states and regions.
A coal-fired power plant can be seen behind the factory in Inner Mongolia, China
BEELDBRON, Reuters
China still depends on coal for more than half of its energy
The Global Times, a state-run newspaper, said reductions were made in four provinces: Guangdong in the south and Heilongjiang, Jilin, and Liaoning in the northeast. There are also reports of power outages in other parts of the country. Companies in large manufacturing areas are required to reduce energy consumption or limit working days during peak demand periods.
Energy-intensive industries such as steel, aluminum smelting, cement manufacturing and fertilizer production were one of the worst blows of the turmoil.
What was the impact on the Chinese economy? Official figures show that manufacturing activity has fallen to its lowest level since February 2020, September 2021, when the coronavirus shutdown paralyzed the economy.
Concerns about power outages have helped global investment banks lower their forecasts of economic growth. Goldman Sachs estimated that up to 44% of the country’s industrial activity was affected by the power outage. He now expects the world’s second-largest economy to grow 7.8% this year, compared to the previous forecast of 8.2%.
Globally, especially by the end of the year, turmoil can impact supply chains.
Since the resumption of the economy, retailers around the world have already experienced widespread turmoil amid rising import demand.

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