China runs on coal. Environmental pledges to foreigners mean little to the Middle Kingdom unless those promises can be leveraged for other purposes.
Odd things are happening in the People’s Republic of China (PRC): electricity shortages due to lack of coal; factories shutting down; cities going dark with no warning, blacking-out traffic lights, stalling people in elevators, and killing patients in hospitals. The entire power grid is said to be near-collapse. Why? Are these electrical shortages due to the weaknesses of an increasingly centralized economy under the control of the Chinese Communist Party? Might they be traced to China’s banning of coal imports from Australia — until 2020, the largest exporter of coal to China? Or might the PRC be weaning itself off coal shipped by overseas routes that might be disrupted during a conflict over Taiwan? A power company in China’s Northeast posted a notice on its website that unplanned blackouts would become “the new normal,” with power cuts lasting through next spring. The post was quickly taken down. Media in Jilin province said the cause was a rise in coal prices leading to short supply — which doesn’t entirely make sense (more on that in a bit). Residents have risked their social credit score by using social media to say the lack of electricity was like living in next-door North Korea. Some Western media report that the electricity shortage is due to an edict out of Beijing to cut regional energy use, implying that it’s part of a “ push to enforce environmental regulations.” Chinese Community Party Chairman Xi Jinping promises that China will peak its carbon emissions in nine years. This has resulted in electricity rationing that has idled energy-intensive industrial activity. A nine-day production halt ending Sept.30 was ordered in Ma’an, China, about 80 miles south of Shanghai. Even food processing plants have been shuttered. In a directly related issue, China outlawed all cryptocurrency activities on Sept.24. Last year, two-thirds of the world’s Bitcoin was mined in China using about 86 terawatt-hours (TWh) of electricity, with almost two-thirds of that from coal power. One Bitcoin transaction consumes 1,544 kilowatt-hours (kWh), or the equivalent of approximately 53 days of power for the average U.S. household, so about $200 worth of electricity. Bitcoin mining used 1.1 percent of China’s electricity in 2020. Coal produced 57 percent of China’s electricity in 2020, with the PRC importing about 8 percent of its coal, much of it for making steel. Thus, banning cryptocurrencies, including their mining, saves enough electricity to reduce China’s thermal coal import requirements by about a third.
