The global energy structure has accelerated the adjustment to green energy, and the investment in traditional energy is insufficient. Under the influence of COVID-19, energy supply and demand are disrupted, exacerbating the contradiction between supply and demand, resulting in global power shortage.
China recovered from the epidemic earlier than many other countries and is now almost the only major manufacturer, so industrial power consumption has increased significantly. Power rationing is mainly to alleviate the power shortage and achieve the goal of energy conservation and emission reduction. China is dominated by thermal power generation, and there is a serious shortage of clean energy. There are still big problems in the energy structure.
Source: Weixunso Read The Article
PSR Analysis: In 2021, China’s electricity demand will grow by more than 10%, which greatly exceeds the previously estimated demand growth of 6% to 7%. At present, the substantial growth of power demand has put great pressure on power supplies. Coal accounts for about 70% of China’s electricity consumption, but the output of coal is far lower than the demand for electricity.
For China’s thermal power, the consumption of thermal coal required for power generation has remained high since last year, accounting for nearly 8% of domestic thermal coal imports, while overseas supply has declined. Domestic power plants are short of coal and coal prices are rising, resulting in losses and low enthusiasm for power generation
The power restriction on high energy consuming industries may aggravate the pressure of PPI rise, thus suppressing production and dragging down China’s economic growth in the second half of the year. The slowdown in production caused by supply side restrictions may also affect the global market and push up global inflation.
Energy consumption per unit of GDP and total energy consumption are two leading indicators. In order to achieve the double control goal of annual energy consumption, various restrictive measures include strictly controlling the growth rate of total energy consumption.
Switching off and power rationing will bring certain negative effects to some high energy consuming industries, but it is good for photovoltaic, green power and other energy industries, so as to accelerate the transformation of energy structure and bring new demand and opportunities to the new energy supply chain. PSR
Jack Hao is Senior Research Manager – China, for Power Systems Research
