China’s power issues are likely to have wider implications as global industries are likely to be hit by the crisis, Bloomberg reported.
- Industry makes up 59% of the total grid demand in China, surpassing all the homes, offices, and retail stores in the country combined. Two-thirds of the grid is powered by coal, with prices up to 1,508 yuan or $234 a metric ton.
- Coal prices have continued to rebound by 57% in the past year in August, which could lead to unaffordable price hikes in high-value goods. The country produces half of all metal and refines nearly a fifth of all oil.
- China will have to move swiftly to ease pressure on the supply side, pushing for renewable energy and removing price curbs from dual-high industries to ensure that the capacity restraints are lifted from zero-carbon power generation.
- Zero-carbon electricity will provide a cheaper alternative to the existing coal power plants, with power generation shifting to wind, solar, hydro, and nuclear. Thermal power plants are also likely to post growth.
President Xi Jinping targets peak emissions by 2030 and hits net-zero by 2060. MCHI is down 1.10%