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In recent weeks, nineteen major Chinese provinces have started rationing electricity. Energy-intensive industries such as the manufacturing of metals, cement, and chemicals have been almost universally affected. The current crisis has three main underlying causes. The first is a spike in energy commodity prices on global markets amid the post-coronavirus recovery.

The second cause is that by the end of the third quarter of , many Chinese provinces had realized that they were not on target to meet the environmental recommendations issued by Beijing. They therefore set about trying to reduce emissions using radical methods, such as requiring enterprises to limit their energy consumption. Thirdly, while power generation may be growing, in some Chinese regions, especially in the southeast, it still lags behind demand.

Some aluminum producers, for example, are in such a hurry to reduce emissions by moving over to hydroelectric power that there are not enough new hydroelectric stations to meet demand. One possible replacement is gas: gas-fueled power stations produce half the emissions of greenhouse gases that coal plants do. Accordingly, Chinese demand for gas will double by , forecasts McKinsey. The development of Russian gas exports — both pipeline gas and LNG — to China could not, therefore, have come at a better time.

The cheapest gas available to Chinese consumers as of January was that supplied via the Power of Siberia pipeline launched in Russia also began supplying LNG to China in As long as coal plays a key role in Chinese energy, Russian exporters have another window of opportunity. From , the supplied volume is due to reach up to 30 million tons. The development of Russian coal exports is a relatively successful example of how the state and businesses have managed to adapt fast enough to the market and its biggest consumer.

No major new Russian-Chinese oil projects have emerged in the last few years. It should, however, increase demand for other energy commodities from Russia, such as high-energy coal and natural gas. The current energy crisis shows just how paradoxical the transition to green energy in China will be.

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