China seeks to allay power shortage fears as coal prices soar and winter approaches
- China orders railway companies, local governments to secure coal supply
- No heat is a problem, says Shenyang resident
- China thermal coal prices hit record high amid tight supply
- Beijing reassures about electricity and coal ahead of winter heating season
- State planner says electricity tariffs will reflect supply and demand
SHENYANG, China, September 29 (Reuters) – China on Wednesday called on railways and local authorities to increase their level of supply of vital coal for utilities as key regions in the world. 2 economy struggling with power cuts that crippled industrial production.
The order, made by China’s powerful state planner, comes after a collision between tight coal supplies, tighter emissions standards and strong manufacturing demand has pushed the price of coal, the world’s largest source of electricity. from China, to breathtaking records – just as winter approaches.
Thermal coal futures in China hit an all-time high of 1,376.8 yuan ($ 212.92) per tonne earlier Wednesday – adding even more pressure on electric utilities unable to recover costs additional fuel. Restrictions have been imposed on electricity consumption in large areas of the country, particularly in three northeastern provinces which are home to nearly 100 million people.
“If there is a power cut in the winter, the heat also stops,” said Fang Xuedong, 32, a delivery driver in Shenyang, the capital of Liaoning Province, about a 90-minute flight away. northeast of Beijing.
“I have a child and an elderly person at home, if there is no heating, that is a problem.”
The growing alarm among residents over the electricity crisis, now in its second week, comes as the state planner – the National Development and Reform Commission (NDRC) – has officially urged local economic planners, energy administrations and railway companies to step up coal transport to meet citizens’ demand for heating during the winter season.
“Each railway company should strengthen the transport of coal to power plants (utilities) with an inventory of less than seven days and initiate the emergency supply mechanism in a timely manner,” NDRC said.
China, the world’s largest consumer of coal, imported a total of 197.69 million tonnes of coal in the first eight months of 2021, down 10% year-on-year. But August coal imports rose by more than a third due to tight domestic supply.
This week, authorities have repeatedly sought to assure residents that there will be electricity for home use and for heating as winter approaches.
But electricity rationing has been implemented during peak hours in many parts of northeast China since last week, with reports and social media posts reporting traffic light outages. and 3G communications networks in the region.
China is considering raising industrial electricity prices to ease the supply crunch, Bloomberg News reported on Wednesday, citing unidentified sources.
The NDRC said later on Wednesday that the government would not prevent electricity prices from floating within a reasonable range and would let them reflect market fundamentals and cost changes.
‘EMBUSHED’ BY RESTRICTIONS
Curbs also continue to affect heavy industry, such as metal production, and manufacturers.
An internal document from a major maker of tech components in China reviewed by Reuters said more than half of its daily production in Kunshan, eastern industrial province of Jiangsu, has been suspended since the start of this week.
Meanwhile, in Foshan in bustling Guangdong province in southern China, the company was only allowed to produce late at night and early in the morning from mid-September to late September, according to the document, which says manufacturers have been “ambushed” with the new restrictions. .
Li Shuo, senior policy adviser for Greenpeace East Asia, called on China to reform its electricity sector to help it absorb price fluctuations and ensure stability.
“This electricity shortage will have huge economic and political implications. But let’s make it clear, the root cause is the high price of coal, NOT climate policies,” Li wrote in a Twitter post this week.
“On the contrary, the electricity shortage demonstrates the importance of moving away from coal, a fuel that has been the watchword for energy security is not at all safe.”
($ 1 = 6.4662 Chinese yuan)
Reporting by Gabriel Crossley in Shenyang and Shivani Singh in Beijing; Additional reporting from Min Zhang in Beijing, David Stanway in Shanghai, Yimou Li in Tapei, the Beijing Newsroom and Tom Daly; Editing by Kenneth Maxwell, Ana Nicolaci da Costa, Kirsten Donovan
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