Chinese and Indian Climate Policy Power Crisis Worsens – Watts Up With That?


Guest essay by Eric Worrall

As China scrambles to recover from a severe coal shortage caused by Xi Jinping’s “non-negotiable” climate directives, their coal, gas and electricity buying spree is triggering shortages in India, Europe and Britain, and perhaps even the USA.

What has caused China’s electricity shortages, and is Beijing’s carbon-neutral goal solely to blame?

Sixteen of mainland China’s 31 provincial-level jurisdictions are rationing electricity as they race to meet Beijing’s annual emissions reduction targetsThe price of thermal coal, used for power generation, has been soaring all year and hit new highs in recent weeks

Orange Wang and Cissy Zhou
Published: 9:00am, 28 Sep, 2021

Non-negotiable carbon reduction targets have forced many local provincial governments in China to impose rushed measures such as widespread power cuts, although an urgent shortage of coal has also emerged as a likely reason for the power supply crunch that is sweeping the nation.

China’s power supply crisis ratcheted up a notch over the past week with more than half of the country enduring power cuts, making it one of the most extreme examples of energy rationing in the nation’s history, especially considering the impact it is having on regular households.

Power cuts are commonplace in China and are usually restricted to industrial users, but their frequency has risen since the second half of last year and have now been extended to households.

Last month, the National Development and Reform Commission (NDRC), the country’s top economic planning agency, criticised the “energy consumption intensity” of nine provinces – Guangdong, Jiangsu, Yunnan, Fujian, Shaanxi, Guangxi, Ningxia, Qinghai and Xinjiang – for actually increasing their energy use instead of reducing it. Following the warning, the nine provinces stepped up their efforts to cut power, with little impact felt by customers.

“An additional 10 provinces failed to meet their progress targets in the reduction rate of energy consumption intensity, and the situation of national energy saving is very severe,” NDRC spokeswoman Meng Wei said.

“Xi’s dual carbon targets are politically non-negotiable. Accordingly, they have become a catalyst for all manner of policy – certainly including the power generation and consumption controls,” said Cory Combs, an analyst with consultancy firm Trivium China.

Read more: https://www.scmp.com/economy/china-economy/article/3150313/what-has-caused-chinas-electricity-shortages-and-beijings

India’s coal crisis is also worsening – largely as a result of China’s last minute scramble for adequate stocks of coal and gas to survive the Winter (h/t JoNova).

India’s coal crisis brews as power demand surges, record global prices bite

Reuters / Oct 4, 2021, 22:20 IST

CHENNAI: Indian utilities are scrambling to secure coal supplies as inventories hit critical lows after a surge in power demand from industries and sluggish imports due to record global prices push power plants to the brink.

Over half of India’s 135 coal-fired power plants have fuel stocks of less than three days, government data shows, far short of federal guidelines recommending supplies of at least two weeks.

Prices of power-generation fuels are surging globally as electricity demand rebounds with industrial growth, tightening supplies of coal and liquefied natural gas.

India is competing against buyers such as China, the world’s largest coal consumer, which is under pressure to ramp up imports amid a severe power crunch.

Read more: https://timesofindia.indiatimes.com/business/india-business/indias-coal-crisis-brews-as-power-demand-surges-record-global-prices-bite/articleshow/86760074.cms

How is all this affecting Europe? Europe has recently been experiencing energy supply shocks, because of their over dependence on unreliable wind power. In desperation they’ve turned to Russian gas – but the supply of Russian gas is surprisingly unavailable.

Russia has been accused of playing political games with energy supply to Europe. But a more plausible explanation for why Russia has reduced the flow of gas to Europe, is that Europe is not their most important customer.

Russia doubles electricity exports to China to help ease power crunch

By Reuters Staff

2 MIN READ

MOSCOW, Oct 1 (Reuters) – Russia’s electricity exports monopoly Inter RAO said on Friday that it would double its October supplies to China after a request from the world’s No.2 economy as it grapples with power cuts.

China is scrambling to deliver more coal to utilities to restore supply, as nearly two-thirds of Chinese provinces struggle with power rationing. The three northeast provinces of Liaoning, Heilongjiang and Jilin – home to nearly 100 million people – have been particularly hard hit.

Inter RAO, which received a request from the State Grid Corporation of China to increase electricity supplies to the country’s northern provinces this week, started to increase exports on Friday, the company told reporters.

In October, its exports to China will rise by 100% year-on-year and by 90% from the original plan for this month, the Russian company said.

Read more: https://www.reuters.com/article/china-power-russia/russia-doubles-electricity-exports-to-china-to-help-ease-power-crunch-idUKL8N2QX3A9

As Europe declines in economic significance and descends into political climate insanity, Russia may be prioritising their relationship with China over keeping the EU supplied with gas.

Even the USA might be affected, though likely not to the extent China, India and Europe are experiencing. Thanks to the anti-pipeline and anti-fossil fuel insanity of Biden and some Democrat run states, some regions such as California depend on significant fuel shipments from overseas. Even though the USA has more or less enough primary supply to satisfy domestic demand, a self inflicted lack of distribution infrastructure means it is easier for some states to import fuel from overseas, than to pipe fuel from US based sources to where it is needed.

President Trump’s energy independence plan could have shielded the USA from overseas supply shocks, like the current unfolding international catastrophe. But Biden reversed all that. Long standing Democrat hostility to new domestic pipelines like Keystone has left parts of the USA exposed to the international market, which could trigger Carter administration style supply shocks, if the international supply dries up.

Australian politicians are as guilty of creating this shortage anyone else. Politicians and banks have starved the Aussie coal industry of capital, and thrown obstacles in the path of new mine site approvals. They have pretty much done everything in their power to kill off the local coal industry, short of outright banning it. Now the world desperately needs coal, Australia still has tremendous capacity to supply that coal – but will it be enough?

It may be too late to fix this near global energy shortfall, at least in the short term. Even if the coal becomes available, the international energy supply chain is difficult to dial up on short notice.

As the Northern Hemisphere descends into winter, India and China are scrambling for fuel supplies which increasingly aren’t available. If China and India turn to diesel, to try to bridge the coal supply shortfall, the desperate prices they offer could divert natural gas, oil and gasoline supply ships away from nations which are sensitive to overseas supplies, such as Australia, Europe and parts of the USA. Some diesel generators can burn gasoline, so gasoline supplies could also be affected by the scramble for adequate energy reserves for winter.

Australia does not have enough refining capacity or reserves to service domestic gasoline and diesel needs, so Australia is vulnerable to international gasoline and diesel price hikes and availability shortfalls, despite Australia being a net energy exporter. This could in turn feed through into increased coal mining costs, as coal miners in Australia and elsewhere pass on whatever international gasoline and diesel fuel price hikes do to their operational costs, or are forced to constrain production and transport of coal, due to not having enough fuel to run their mining operations. A deadly price spiral could develop, as coal prices drive price spikes for other fuels, which in turn drives further increases in the price of coal. A price spiral could leave poor people across the Northern Hemisphere without adequate heating this winter.

Suppliers will do what they can, and it may be enough – they have a tremendous incentive to cash in on the demand, if they can satisfy it. But this crazy self inflicted shortage of winter energy should never have been allowed to occur. It is up to we, the people, to hold our politicians accountable for their climate stupidity.



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