The "electricity shortage" is due to the excessive growth of high-energy-consuming industries.
September 05 09:38:09, 2025
As temperatures continue to climb, the power shortage that had previously been alleviated has returned. The State Grid Corporation of China predicts that the electricity shortfall in the North China, East China, and Central China regions will not only persist through this summer but could extend into winter this year and even affect 2012 and 2013. This recurring issue has become a pressing concern as the 12th Five-Year Plan begins.
Electricity shortages have quickly become a hot topic, highlighting the need for stable energy pricing. However, it's crucial to look beyond surface-level issues and address the underlying causes of the power crisis. The National Development and Reform Commission reported that in the first four months of this year, China’s GDP grew by 9.6%, while electricity consumption rose by 12.6%. This translates to a power elasticity coefficient of 1.32, indicating that electricity demand is growing faster than economic output.
This trend isn’t just due to temporary droughts affecting hydropower. A global electricity shortage is emerging, driven largely by rapid growth in high-energy-consuming industries. In the first quarter of the year, the production of crude steel, coke, cement, and iron increased by 13.3%, 29.8%, 23.7%, and 17.4% respectively. These figures reveal an overcapacity that is unsustainable, especially when most of China’s energy supply still relies on coal.
Experts warn that only half of the 3 billion tons of coal produced annually meets safe, efficient, and environmentally friendly standards. While some non-scientific production capacity is tolerated, excessive reliance on it leads to environmental degradation, resource waste, and frequent mining accidents. This model—relying on extensive energy use to support rapid growth—is clearly unsustainable.
Changing this pattern is essential for transforming China’s economic development model. Focusing on scientific development and accelerating structural reforms, the goal is to shift from the current “A model†of energy supply—where demand is met with inefficient and polluting sources—to a more sustainable “B model,†where energy is supplied in a way that matches rational demand.
Take the cement industry as an example. From 2000 to 2010, annual output surged from 600 million to 1.84 billion tons, accounting for nearly 60% of global production. While infrastructure needs are real, experts estimate that existing capacity could meet demand for 2.5 to 3 billion square meters of construction, 100,000 km of highways, 7,000 km of rail lines, and other necessary projects. Yet, many large-scale projects lack real value, such as unnecessary urban developments or speculative constructions like golf courses. These are unreasonable demands that should be curbed.
At a macro level, China’s GDP accounted for 9.5% of the world’s total in 2010, yet its energy consumption made up 19.5% of global usage. The energy intensity per unit of GDP is double the global average and 4.9 times that of Japan. While some inefficiency is expected during industrialization, the current levels point to structural issues and low energy efficiency.
On the supply side, a scientific approach means promoting sustainable coal production, reducing unscientific capacity, and investing in technological innovation. Expanding clean energy sources, including natural gas and unconventional fuels, can help diversify the energy mix, reduce pollution, and combat climate change.
China stands at a pivotal moment in its development. To achieve a sustainable transformation, it must move away from unchecked expansion of high-energy industries and curb excessive growth. This requires rethinking performance metrics, integrating economic values into policy, and using market mechanisms to drive progress.
In short, the electricity shortage is a symptom of over-reliance on energy-intensive sectors. Addressing this requires structural reform and a shift toward energy efficiency. Energy conservation is not just about saving resources—it’s about fostering new economic growth and sustainable development. As China modernizes, energy leadership must become one of its defining features.