Foreign media reported that China’s recent power shortages are causing local governments in several provinces to cut power supplies to some commercial and industrial users. IHS Markit analyzed that China’s power crunch could last for months; Rana Mitter, a professor of Chinese politics at Oxford University, said that the West is moving to re-establish the supply chain, and that China’s unreliable power supply could be a new impetus for the supply chain to move away from China.
According to foreign media estimates, Hunan’s power supply could be short by as much as 12 percent. James Stevenson, senior director of coal, metals and mining at IHS Markit, said that when you see such a shortage of power in China, what you really need to do is reduce demand, and that’s exactly what we’re seeing now.
The power crunch in China is said to include.
● In China’s manufacturing town of Guangdong province, power lines froze on Monday (21), causing brief disruptions to electrical equipment.
● Morgan Stanley noted that in Zhejiang province, some local governments have ordered power plants and industrial users to shut down by the end of the year in order to comply with the 13th Five-Year Plan to reduce the total consumption and intensity of coal and other energy sources.
State Grid, which operates most of China’s power lines, said it will mobilize employees to mitigate power outages in Beijing, Chongqing and Jilin, all of which are facing higher demand and tighter supply in the cold winter.
Reports indicate that colder-than-ever weather is boosting demand for winter heating power in China, and snow and ice are causing serious damage to the grid infrastructure; in addition, some areas of China are limiting power to control emissions, which is causing some areas to run out of power during peak hours.
At the same time, China is reaping the consequences of the Communist Party’s trade bullying measures against Australia and Beijing’s ban on Australian coal imports. The shortage of coal, the preferred source of fuel for most Chinese power plants, is largely due to China’s own inability to keep up with the surge in coal supply that has occurred after the Communist Party escalated diplomatic disputes and imposed an unofficial ban on Australian coal.
That has left China facing soaring energy prices, with local coal futures prices soaring to record levels and the price of natural gas, another fuel for heating and power generation, also soaring.
“Weather conditions in the next few months will be a key factor in determining the extent of power outages,” said Hanyang Wei, an analyst at Bloomberg New Energy Finance, adding that “if the cold weather lasts only a few days, then peak loads will drop quickly.”
Hanyang Wei added that large industrial customers are on the front line of power outages, followed by commercial buildings to protect residential power, so “local industries will be hit if the outages last for a long time.”
According to Chinese media reports, many office workers in Changsha, Hunan province, had to climb stairs from the 20th to 30th floor to enter their offices after the power was shut off in office buildings; in Yiwu, Zhejiang province, factories were even forced to shut down several days a week, causing delays in order delivery for some manufacturers.
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