Analysts are warning that inefficient energy use in China’s industries has made it harder for the government to solve the problem of surging energy prices, according to Bloomberg.
The high-energy demand in factories has caused coal prices to rise to 1,508 yuan or $234 per metric ton. The regulator’s attention now shifts to the inefficient high-power consumers.
Coal prices have been on the rise, jumping 40% in 2017 when China closed unregulated mines. In the wake of the pandemic, the prices surged by 57%.
It is feared that high energy costs in China will have a ripple inflationary pressure across the globe. China is a major global supplier of metals, refined oil, and consumer goods.
Analysts opine that renewable energy could be a solution to boost the Chinese power supply and cut carbon emissions.
Electricity demand for industries in China is estimated at 59% compared to 25% in the US. China had initially offered low electricity tariffs to promote industry development.