{"id":13485,"date":"2021-10-28T03:19:46","date_gmt":"2021-10-28T03:19:46","guid":{"rendered":"https:\/\/wellmaxgroup.com\/?p=13485"},"modified":"2021-11-19T02:32:54","modified_gmt":"2021-11-19T02:32:54","slug":"whats-behind-chinas-power-cuts","status":"publish","type":"post","link":"https:\/\/wellmaxgroup.com\/whats-behind-chinas-power-cuts\/","title":{"rendered":"What&#8217;s behind China&#8217;s power cuts?"},"content":{"rendered":"<p>Last Monday, Wen Peng was working the late shift at a parts factory in central China\u2019s Hunan province when the power cut off. It was just after midnight.<\/p>\n<p>\u201cThe machines stopped working, so the factory sent us home,\u201d he said.<\/p>\n<p>Parts of China have been experiencing power cuts that are hitting millions of homes and factories. Analysts at Goldman Sachs and Nomura have already downgraded their gross domestic product growth forecast for China for the year from 8.2% to 7.8% and 7.7%, respectively.<\/p>\n<p>Power rationing was so abrupt in northeastern Liaoning province that a steel factory\u2019s ventilators were turned off and sent 23 workers to the hospital to be treated for carbon monoxide poisoning.<\/p>\n<p>As for Wen, he was given the rest of the week off just when the factory was getting busy.<\/p>\n<ul>\n<li><strong>Energy use surge<\/strong><\/li>\n<\/ul>\n<p>The power cuts are caused by a surge in energy use and a shortage of coal. According to official statistics, electricity consumption from January to August increased 14% compared to the same period last year.<\/p>\n<p>Much of the energy is used by the industrial sector, according to Lin Boqiang, dean of the China Institute for Energy Policies Studies at Xiamen University.<\/p>\n<p>\u201cChina is the first major economy to recover from the COVID-19 pandemic lockdown, and so many overseas orders have gone to Chinese factories,\u201d he said.<\/p>\n<p>\u201cThe price of copper and aluminum are at their highest in years, so manufacturers tend to produce more. This is a big shock on the electricity market, because heavy industries consume 40% to 50% of the supply,\u201d Lin said.<\/p>\n<ul>\n<li><strong>Coal shortage<\/strong><\/li>\n<\/ul>\n<p>At the same time, he said China relies on coal to generate up to 70% of the country\u2019s electricity. Currently, there is a coal shortage.<\/p>\n<p>In theory, power cuts shouldn\u2019t be happening in China, according to Lin.<\/p>\n<p>\u201cThere is enough electricity generation capacity and enough coal underground. It is just that China is controlling its carbon emissions and not mining more coal this year,\u201d he said.<\/p>\n<p>The coal shortage isn\u2019t all about protecting the environment.<\/p>\n<p>China usually imports coal from Australia, but relations between the two countries are tense. The Chinese government has all but banned Australian coal. This has pushed coal prices up, which raises another issue.<\/p>\n<ul>\n<li><strong>Electricity price caps<\/strong><\/li>\n<\/ul>\n<p>\u201cIn China, coal prices can increase and be determined by the market, but not electricity prices,\u201d Lin said. The Chinese government wants to keep utility prices low. So power companies are not allowed to pass on their extra costs to users.<\/p>\n<p>Currently, power plants are not operating at full capacity and have no incentive to produce more. Over 20 provinces are rationing energy, and this has created uncertainty for businesses.<\/p>\n<p>\u201cThe cuts began last Sept. 25. There were more on the 27, and we were told the power would be off for the rest of the week. But it came back on the 28,\u201d said Fox Fu, a manager of a software company in central Hunan province.<\/p>\n<p>As for Wen, he hopes to return to the factory soon. Otherwise, he said his pay \u2014 like that of millions more Chinese \u2014 will be cut by a lot.<\/p>\n<p>&nbsp;<\/p>\n<p><em>Source: marketplace<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last Monday, Wen Peng was working the late shift at a parts factory in central China\u2019s Hunan province when the power cut off. It was just after midnight. \u201cThe machines stopped working, so the factory sent us home,\u201d he said. Parts of China have been experiencing power cuts that are hitting millions of homes and &hellip;<\/p>\n<p class=\"read-more\"> <a class=\"\" href=\"https:\/\/wellmaxgroup.com\/whats-behind-chinas-power-cuts\/\"> <span class=\"screen-reader-text\">What&#8217;s behind China&#8217;s power cuts?<\/span> Read More &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":13487,"comment_status":"open","ping_status":"open","sticky":false,"template":"wellmax-single-post.php","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-13485","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lighting-industry-insights"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What&#039;s behind China&#039;s power cuts? - Wellmax<\/title>\n<meta name=\"description\" content=\"The power cuts are caused by a surge in energy use and a shortage of coal. 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