China rust-belt province warns of more power shortages in energy crisis

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BEIJING (Businesshala) – China’s largest provincial economy in its northeastern Rust Belt has faced power shortages, despite government efforts to boost coal supplies and manage electricity use in the post-pandemic energy crisis in many countries. warned of deterioration.

FILE PHOTO: The chimney of China Energy’s coal-fired power plant is pictured in Shenyang, Liaoning province, China September 29, 2021. Businesshala / Tsingshu Wang

China’s Liaoning province on Monday issued its second-highest alert of a power shortage, the fifth in two weeks, warning that the shortfall could reach about 5 gigawatts (GW).

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Liaoning has the largest economy and consumes the most electricity of the three provinces that make up China’s best industrial region. It has been facing widespread power cuts since mid-September. A level two power shortage warning indicates a demand gap of 10%-20% of the total electricity demand.

A rebound in global economic activity as coronavirus restrictions are lifted has exposed shortages of fuel used for electricity generation in China and other countries, leaving industries and governments scrambling to winter in the Northern Hemisphere. Is.

“The biggest power deficit on October 11 could reach 4.74 gigawatts (GW),” said a notice issued by the Liaoning Provincial Industry and Information Department.

It said that at 6 a.m. (2200 GMT on Sunday) an order was issued to curb the use of electricity.

The province also issued level two power crisis alerts for each of the last three days of September, when the daily power supply gap reached 5.4 GW, leaving hundreds of thousands of homes without electricity and forcing industrial plants to suspend production. Had to be

The power shortage follows the supply and skyrocketing prices of coal, which is used to generate more than 70% of the electricity in the region. Wind farms have also become inactive due to slow wind speed. Wind power accounted for 8.2% of Liaoning’s electricity generation in 2020.

Last week, China’s top two coal mining regions, Shanxi and Inner Mongolia, ordered their more than 200 mines to expand production capacity and prioritize coal supplies to power plants in northeastern provinces, including Liaoning.

However, analysts and traders expect coal output to remain low this winter, and China will still have to cut industrial electricity consumption by about 12% in the fourth quarter.

China’s thermal coal futures rose 8% to the daily upper-trade limit soon after trading began on Monday.

Moody’s Investors Service said in a report: “China’s power cuts will exacerbate economic tensions, weighing on GDP growth for 2022. And the risks to GDP forecasts could be bigger as disruptions in production and supply chains feed into the economy.” through.”

Reporting by Muyu Ju and Shivani Singh; Editing by Tom Hogg

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