China is currently struggling to combat a growing shortage of energy, which has affected as many as 20 provinces in the last month that many believe to be much more devastating to the global economy than the UK's gas shortage.
The reasons for the growing scarcity of energy in the Asian nation come from a crackdown on greenhouse emissions, the increasing price of coal, and increased demand for energy. It is considered to be China's biggest energy crisis in history.
Growing Energy Shortage
The majority of the energy shortage was concentrated on China's industrial hubs, which have taken the brunt of the crisis. Guangdong province officials have urged businesses in the region to limit their power usage to help the growing crisis in the country.
Many homes, businesses, and factories have been affected by sudden power cuts and energy rationing. The list of affected establishments includes manufacturers supplying tech giants Apple and Tesla, which have branches in the Asian nation.
An expert in the oil and gas industries, Ron Bousso, said that the energy shortage in China threatens to affect the global economy for the worse. Economists have also shared their forecasts of the situation and how it would affect China. They said that the nation's economic growth this year could drop from 8.2% to 7.8%, Express reported.
On Monday, three northeastern provinces were hit with an "unexpected and unprecedented" power cut brought about by the crisis. Heilongjiang, Jilin, and Liaoning provinces experienced major disruptions to the "daily lives of people and business operations" due to the sudden power cuts.
Read Also: Joe Biden Faces Congress Showdown as Democrats Struggle To Advance Agenda Amid Tense Negotiations
China's State Grid Corporation on Monday said that it would continue to fight the growing crisis and provide enough energy to its customers. In June, the country experienced a similar power crisis but the recent situation is considered to be much worse because of a perfect storm.
Industries in China are facing growing pressure as the price of energy continues to rise with Beijing facing calls to tackle carbon emissions. The region is considered to be the biggest contributor of carbon emissions in the world, which has forced officials to pledge to control the situation before 2030, CNN reported.
Reasons for the Lack of Supply
While some believe that the coronavirus pandemic was the major contributor to the current energy crisis in China, reality is not so simple. Some of the reasons include consumer and factory demand for energy, things that predate the COVID-19 pandemic that has ravaged the globe.
Despite many nations promising to transition to green energy and many investors moving over to renewable energy sources in the last five or 10 years, the majority of the world still relies on fossil fuels, including oil, coal, and gas. This, coupled with the lack of investment in fossil fuels, contributed to the growing energy crisis.
"Gas, coal, oil, metals, mining - you pick - the old economy is significantly underinvested. We call it the revenge of the old economy. Poor returns saw capital redirected away from the old economy to the new economy," said Jeff Currie, the global head of commodities research at Goldman Sachs Group, Aljazeera reported.
Related Article: Arkansas Governor Allows State's Public Health Emergency For COVID-19 to End; Clarifies That the State Still Feels the Effects of Pandemic
