A growing issue facing China is how to both meet the nation’s rising electrification needs and its decarbonization goalThe is in the middle of growing energy shortages as surging demand for energy and strict limits on coal usage deliver create a new challenge, on the heels of a highly disruptive pandemic. It's a problem that could last for months, straining the country's economic recovery and weighing on global trade.In China, coal is still involved in generating some 60% of the country's power. But the government is wary of that figure rising any higher — and so has been trying to reduce coal consumption as it tries to achieve its goal of becoming carbon neutral by 2060. Although China is the biggest user of fossil fuel, it is also the biggest generator of renewal energy (895 gigawatts per year). A Global ProblemAs the world’s biggest manufacturer China might be at the eye of the storm, however it is not the only country facing energy shortages.Global electricity demand is growing faster than renewable energy capacity can be rolled out and will require more power to be generated from the burning of fossil fuels, the International Energy Agency (IEA) said in a report.Rising Power Consumption, Rising EmissionsAfter falling by about 1% in 2020 when the COVID-19 pandemic curbed industrial activity across the world, power consumption is set to grow by close to 5% in 2021 and by 4% in 2022 as economies recover, the IEA said in the mid-2021 edition of its Electricity Market Report.Nearly half of the increase will have to be met by burning fossil fuels, notably coal, which could push carbon dioxide emissions from the sector to record highs in 2022, the agency said, adding it expects particularly strong demand in the Asia Pacific region, primarily China and India.While many countries have committed to growing their use of renewable energy, capacity is not growing fast enough to meet demand. Coal-fired electricity generation is set to increase by almost 5% this year and by a further 3% in 2022, according to IEA’s Energy Market Report. Renewables: Good, if You’ve Got The CapacityBased on current policy settings and economic trends, electricity generation from renewables – including hydropower, wind and solar PV – is on track to grow strongly around the world over the next two years – by 8% in 2021 and by more than 6% in 2022. But even with this strong growth, renewables will only be able to meet around half the projected increase in global electricity demand over those two years, according to the IEA.To meet the demand for energy, fossil fuel-based electricity generation would cover 45% of additional demand in 2021 and 40% in 2022, with nuclear power accounting for the rest. As a result, carbon emissions from the electricity sector – which fell in both 2019 and 2020 – are forecast to increase by 3.5% in 2021 and by 2.5% in 2022, which would take them to an all-time high. ENERGY CAPACITY OUTLOOK 2021-22Guangdong province — a manufacturing center responsible for $1.7 trillion, or more than 10%, of China's annual economic output and a bigger share of its foreign trade — has been rationing power for over a month.At least nine provinces have said they are dealing with similar issues, including Yunnan, Guangxi and the manufacturing hub of Zhejiang, forcing regional authorities to announce power curbs.The power shortage contributed to a slowdown in factory activity growth in China in June, according to the China's National Bureau of Statistics.The nation is pushing for a carbon neutral China by 2060. That ambitious target for the world's biggest coal consumer has led the country's coal mines to produce less, resulting in higher prices, according to Yao Pei, chief strategist for Chinese brokerage firm Soochow Securities.Through the first five months of the year, power consumption in South China exceeded pre-pandemic levels — up 21% from the same period in 2019, according to the China Southern Power Grid, a big state-owned grid operator.Trade tensions with Australia, which supplies 60% of China’s thermal coal imports, has contributed to energy shortages.Globally, renewables will only be able to meet around half the projected increase in global electricity demand over the next two years.Worldwide, power consumption is set to grow by close to 5% in 2021 and by 4% in 2022 as economies recover.