Power rationing is just the beginning, the world’s most expensive winter is coming soon

Recently, news of electricity curtailment in various places has made headlines, and there are many analyses on this. Some say it is caused by "carbon neutrality", and some say it is caused by not importing Australian coal mines.

Let me start with the conclusion that this round of power shortage is not unique to China, but global.

It stems from the global energy structure, the adjustment to green energy is too fast and premature, and the investment in traditional energy is insufficient. With the outbreak of the epidemic, the rhythm of energy supply and demand has been disrupted, aggravating the contradiction between supply and demand, resulting in a global shortage of electricity.

Moreover, this phenomenon has no solution in the short to medium term, especially at the peak of electricity consumption this winter, it will be more prominent.

From the perspective of domestic power supply and demand, China's thermal power output (supply) has increased this year (purple line) compared to previous years, and the increase this year is still more significant.

However, relative to electricity consumption (demand), the increase is not enough.

The bulk of electricity consumption is the secondary industry, that is, industry.

Because China has recovered from the epidemic earlier and is currently almost the only major producer, industrial electricity consumption has increased significantly.

One more detail is added here. In May of this year, digital currency mining was shut down nationwide. At that time, there was an important reason for high energy consumption.

Digiconomist's Bitcoin Energy Consumption Index estimates that it will take 1,544 kilowatt-hours of electricity to complete a Bitcoin transaction, which is equivalent to about 53 days of electricity for an average American household.

An analysis conducted by the University of Cambridge in February this year showed that Bitcoin mining consumes more energy than Argentina and ranks among the top 30 energy-consuming countries.

In fact, the policy at that time was to predict the power shortage in the second half of the year. After all, the peak annual electricity consumption is concentrated in summer and winter.

For China's thermal power, the consumption of thermal coal required for power generation has continued to be at a high level since last year, and even reached a record high at the beginning of the year.

This also makes the problem of the supply and demand gap of thermal coal particularly prominent.

How is this gap caused?

Some people say that it is because China has given up importing coal from Australia.

But as long as you look at the quantity of China's thermal coal imports, you will find that there is no cliff-like decline, but there is indeed no growth.

Thermal coal imports accounted for 5%-10% of domestic consumption for a long time, and Australia accounted for 50%. Since the beginning of this year, the country has expanded Indonesia (19.8% year-on-year), Colombia (year-on-year increase of 163.9%), and Russia (year-on-year increase of 79.8%). ), South Africa (the first import, accounting for 9.6% of total imports) and other countries' imports, offset a considerable part of Australia's vacancies.

Therefore, this is not the main reason.

The real main reason lies in the long-term downturn in coal prices over the past few years, which has put tremendous pressure on coal companies to survive.

Do you still remember the default of Henan Yongmei's bonds at the end of last year? At that time, the lives of many coal companies were hanging by a thread.

But within a few months, we ushered in an unprecedented super cycle.

At that time, coal companies couldn't even pay their debts, and their investment was reduced:

Now that coal prices have suddenly exploded, how can production capacity increase immediately?

In fact, the same is true overseas.

Global thermal coal prices have also soared since the beginning of the year.

Natural gas, the mainstay of coal-fired power generation in Europe and the United States, rose by no less than coal.

The reason behind it is similar to China:

Since the beginning of the year, European and American electricity prices have continued to rise sharply, and EU electricity prices have more than doubled compared to a year ago.

As of July, electricity prices in Italy, Spain, Germany, and France have increased significantly by 166%, 167%, 170%, and 134% respectively from a year ago.

U.S. residents use electricity as high as 13.9 cents/kWh, a record high.

The reason for the correction is also a problem in the energy structure. Europe is the share of new energy, which has increased the most. Natural gas has remained flat and coal has fallen sharply.

The United States is relatively realistic. Coal has plummeted, but the decline has been undertaken by natural gas. Therefore, the rate of increase in electricity prices is lower than in the European Union.

However, given the continued decline in global natural gas production capacity, life in the United States is not going well this winter.

As for new energy, European wind power has ceased to function under ultra-high-voltage weather.

According to this trend, this winter in Europe and America, with high natural gas prices, the "most expensive winter" is a foregone conclusion.

Back in China, because of the special national conditions, the domestic electricity price has not risen in recent years.

The current coal price, for power plants, means that generating electricity means losing money. Electricity is already in short supply, and it is difficult to make money yet.

Therefore, according to the current situation, the electricity curtailment is expected to continue for a while, and it may not be completely restored by the beginning of the spring next year.

But the economic impact will not be small.

On the one hand, the shutdown of factories and the supply gap between the middle and lower levels will bring about certain inflationary pressures. On the other hand, it will also affect the income of the middle and lower reaches of the employed population, and consumption will be even worse.