In 2021 a combination of disruptions in coal production, higher-priced imports of coal, and low availability of hydroelectric due to drought have led the country’s generators to ration electricity and to impose blackouts to preserve the grid.

Two-thirds of China’s electricity comes from coal, the rest from a combination of natural gas and renewables. China is the world’s largest importer of natural gas. In October, flooding in Shanxi, the country’s largest coal-producing region at a quarter of the country’s supply, led to a suspension of operations at 60 mines and halted work at close to 400 others.

Businesses – including polysilicon, wafer, cell, and module manufacturers – are, by government order, reducing hours and acceding to consumption limits. As a result, solar polysilicon, wafer, cell, and module manufacturers are reducing hours and idling equipment while facing mounting orders that they may not be able to fill.

Meanwhile, similar to California’s energy crisis in the early 2000s, the cost of imported coal and natural gas has spiked, leaving generators caught between the government-regulated price to consumers and the market-determined price.

Buyers, already facing increased prices for components, higher shipping costs, shipping delays, and, in the US, cost increases and delays due to the WRO, can now expect more supply constraints. Further complicating supply chain concerns, a resurgence of COVID in the Southeast Asia manufacturing hubs of Vietnam, Malaysia, Indonesia, and Thailand, have led to production shutdowns.  

Comment: The world is still dealing with COVID realities, including manufacturing shutdowns and supply chain issues. As countries ramp activities, electricity demand is peaking just as efforts to ramp down the use of conventional energy collides with ramping up the use of renewables. As renewables are variable resources, storage is required to make the switch.

Even if storage were ready for a sustained rollout, global traditional transmission and distribution infrastructures are not resilient enough to support the change. Conservation and money are needed to move forward – governments need to be prepared and willing to pay.Lesson: In 1988, then-NASA scientist James Hansen testified before the US congress about the realities of climate change and what the world would face without acting. We didn’t act, and we’re facing the realities of extreme weather, droughts, higher prices, and scarcity.  Will government commit to the cost – history has not borne out a willingness to do so.