China seeks to allay power tightening fears

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China on Wednesday called on railways and local authorities to increase their level of shipment of vital coal supplies to utilities, as key regions of the world’s number one. 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.

On Wednesday, thermal coal futures in China hit a record high of 1,376.8 yuan ($ 212.92) per tonne, increasing pressure on electric utilities unable to recoup additional costs 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, northeast of Beijing.

“I have a child and an elderly person at home, if there is no heating, that is a problem.” Growing residents’ concern 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 railroads to step up coal transport to meet winter heating needs.

“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.

This week, authorities have repeatedly sought to assure residents that there will be electricity for home use and for heating as winter approaches.

China is considering raising industrial electricity prices to ease the supply crunch, Bloomberg News reported on Wednesday, citing unidentified sources.

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.

On Wednesday, the official People’s Daily reported that coal for heating and electricity in northeastern provinces of Jilin, Heilongjiang and Liaoning had been secured, with some suppliers and producers recently signing medium and medium coal contracts. long term.

China has called for an increase in domestic coal production, and the governor of Jilin province this week proposed an increase in coal imports. The main coal-producing province of Shanxi in the north has signed medium and long-term coal supply contracts with 14 provinces, the state-run Xinhua news agency reported on Wednesday.

China, the world’s largest consumer of coal, imported a total of 197.69 million tonnes in the first eight months of the year, down 10% year-on-year. But August coal imports rose by more than a third due to tight domestic supplies. 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.”


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