Facing an energy crunch, China is increasingly relying on coal, with all of its polluting and climate ill effects.
From the Economist Magazine:
The deeper reason for the coal crunch is China’s efforts to reduce its dependence on the fuel, which is responsible for a big share of the country’s carbon emissions. The authorities have been reluctant to approve new mines or the expansion of existing ones in recent years, because “it’s clearly driving the bus in the wrong direction”, says David Fishman of The Lantau Group, an energy consultancy.
When supply is tight, prices are supposed to rise, obliging customers to economise on their consumption. But as the price of coal shot up, power stations were unable to pass their higher costs on. The amount they could charge the grid company that buys the bulk of their power could rise only up to 10% above a regulated price, which was changed infrequently. And the tariff paid by end-users was based on a catalogue of prices that was similarly inflexible. Some power stations simply stopped operating, refusing to generate at a loss.