China Energy Industry

China expects power shortages amid surging demand

Xinhua
June 2, 2008

BEIJING, June 2 (Xinhua) — China could suffer electricity blackouts this summer in its eastern, southern, and central areas as demand rises ahead of supply, a senior official of the power regulator has warned.

Yu Yanshan, deputy head of the State Electricity Regulatory Commission (SERC) general office, said Guangdong Province would be short 5.5 million kilowatts, Guizhou 1 million kilowatts, and Yunnan 1.5 million kilowatts.

China experienced the fifth consecutive year of power shortagesin 2007.

Yu said the May 12 earthquake centered on Sichuan’s Wenchuan county had affected power generation and distribution in these areas.

The quake also damaged some hydroelectric dams, Yu added.

According to Yu, a shortage of coal was also putting pressure on electricity generation. Coal reserves in some power plants were below the seven-day alarm level.

Coal shortfalls had hit some of the eastern and southern provinces, Anhui, Hunan and Hainan included, said Yu.

Thirty-five generating plants nationwide had stopped generating due to the lack of power coal, leading to a loss of capacity of 6.08 million kilowatts.

According to the SERC, the coal reserve in the country’s big power plants is 43.81 million tonnes. This reserve can maintain normal production in 11 days.

Yu said the coal reserve in big generation plants in Sichuan Province had been basically restored thanks to the country’s efforts to ensure coal supply and transportation in the wake of the May 12 earthquake.

Despite surging demand, an increase in coal prices would lead to a power deficit, which would add tens of millions of yuan to the costs of the domestic power plants, said market analysts.

Coke prices in most domestic markets rose by 300 yuan (43 U.S. dollars) per tonne on Sunday. The price adjustment put the coke price in Shanxi, the main coal producer, at 2,680 yuan per tonne in June.

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