China on Thursday continued to grapple with its worst power outages in decades with several provinces ordering industries to cut down or even shut production and urging millions of residents to use electricity judiciously.
A number of provinces and regions including Liaoning and Jilin in northeast China, the trading powerhouse Guangdong in the south and Zhejiang in the east have been in the grip of power shortage for weeks now.
Central authorities are scrambling to deliver more coal to power plants to restore supply as three provinces in the northeast Liaoning, Heilongjiang and Jilin, the worst hit and home to nearly 100 million people, face long hours of power cuts.
A state media report quoted the China National Coal Association and China Coal Transportation and Distribution Association as pointing out a tightening trend in coal supplies nationwide and said that the prospect of ensuring ample supplies for the upcoming winter season, when coal demand peaks, is not optimistic.
The widespread outages have triggered speculation about the disruption of the global supply chain and even a slowdown in the world’s second-largest economy, official news agency, Xinhua said in a comment piece on Thursday.
China’s state planner on Wednesday ordered railway companies and provincial authorities to rush coal supplies to regions grappling with unprecedented power cuts, which have hit industrial production and forced residents to switch on mobile phones and light candles to go about their daily chores.
“In the central province of Hunan, some building façade lighting and billboards are being turned off during peak hours. In the southern trade hub of Guangdong, some factories have been ordered to shut down for up to a week,” news website, Caixin reported.
In Shenzhen, the power supply bureau urged the general public to use electricity scientifically, save electricity, and set the air-conditioning temperature above 26°C.
Power shortage in industrial hubs in China is not rare but the ongoing crunch has also hit millions of households.
The reasons behind the crisis are continuing shortage of coal, rising coal prices and efforts made by local governments to curtail industrial energy use and meet carbon reduction targets.
“Actually, structural and cyclical factors explain the power crunch. As insiders have pointed out, power demand surged quickly after the developed coastal areas of China saw strong recovery momentum,” the Xinhua comment piece said on Thursday.
Data from the State Grid Corporation of China (SGCC) showed that in the first six months, total electricity consumption increased 15.83% from the same period a year ago.
“In addition, coal-fired power producers suffered losses due to an overwhelming rise in the cost of coal. The prices of thermal coal have hit a record high,” it said.
“A key factor behind the rapid growth of electricity consumption in China is the post-pandemic economic recovery,” the Caixin report said.
In turn, the crunch is cutting down production, driving industrial production costs and disrupting the global supply in the world’s second-largest economy.
Many Chinese factories have cut output or have halted production entirely with industry insiders telling state media that the situation could worsen as the winter season draws near.
“A textile factory based in East China’s Jiangsu Province received a notice from local authorities about power cuts on September 21. It won’t have power again until October 7 or even later,” the Global Times reported earlier this week.
China’s top planning body, the National Development and Reform Commission (NDRC) has taken measures to ensure that coal supply to major power plants are guaranteed through a long-term contract with coal mines.
“The National Energy Administration has sent work teams to Beijing, Tianjin, Hebei, Inner Mongolia, Heilongjiang and Hunan to arrange for increasing coal and natural gas supply,” the Xinhua report said.
China will make the public’s basic power needs the top priority of its power-supply work, ensuring that households stay safe and warm throughout this winter, the NDRC said.
“Each railway company should strengthen coal transportation to powerhouses (utilities) with an inventory of less than seven days and launch the emergency supply mechanism in a timely manner,” said the NDRC.