An aerial photo taken on April 27, 2021 shows the view of the Jinshan 500kV power substation in Chongqing, southwest China. Photo: Xinhua
Nationwide power cuts, caused by many factors including a sharp rise in coal prices and increased demand, have resulted in side effects in Chinese factories of all kinds, some reducing production or completely stopping production. Industry insiders predict the situation could worsen as the winter season approaches.
As production shutdowns caused by power cuts challenge factory output, experts believe Chinese authorities will launch new measures – including a crackdown on high coal prices – to ensure a stable supply of electricity .
A textile factory based in eastern China’s Jiangsu province received notice from local authorities about power outages on September 21. It will not be powered again until October 7 or even later.
“The power cuts have surely had an impact on us. Production has been halted, orders are suspended and all of our 500 workers are on a month’s leave,” a Wu factory manager told Global Times on Sunday. .
Other than reaching out to customers in China and abroad to reschedule fuel deliveries, there’s not much else to do, Wu said.
But Wu said there were more than 100 companies in Dafeng District, Yantian City, Jiangsu Province, facing the same situation.
One of the likely reasons for the power shortage is that China was the first to recover from the pandemic, and export orders then poured in, Lin Boqiang, director of the China Center for Xiamen University energy economics research.
As a result of the economic recovery, total electricity consumption in the first half of the year increased by more than 16% year-on-year, setting a new record for many years.
Due to the resilience of market demand, the prices of raw materials and raw materials for basic industries, such as coal, steel and crude oil, have increased all over the world. This has caused electricity prices to soar and “now it’s quite common for coal-fired power plants to lose money when they generate electricity,” analyst Han Xiaoping told the Global Times on Sunday. chief of the energy industry website china5e.com.
âSome even try not to generate electricity in order to stop the economic losses,â Han said.
Industry insiders predict the situation could get worse before it improves as stocks at some power plants run low as the winter season quickly approaches.
As electricity supply tightens in winter, in order to secure supply during the heating season, the National Energy Administration recently held a meeting to roll out coal production and supply guarantees and in natural gas this winter and also next spring.
In Dongguan, the world-class manufacturing hub of southern China’s Guangdong Province, power shortages have put companies like Dongguan Yuhong Wood Industry in dire straits.
The company’s wood and steel processing plants face power consumption caps. Production is banned from 8 p.m. to 10 p.m. and electricity must be reserved for the daily life of the public, an employee named Zhang told the Global Times on Sunday.
Work can only be done after 10 p.m., but it may not be safe to work so late at night, so the total number of working hours has been reduced. âOur total capacity has been reduced by about 50 percent,â Zhang said.
With tight supplies and record loads, local governments have urged some industries to cut back on consumption.
Guangdong released an announcement on Saturday, urging service industry users such as government agencies, institutions, shopping malls, hotels, restaurants and entertainment venues to conserve energy, especially during peak hours. .
The ad also urged people to set air conditioners to 26 Â° C or higher.
Along with high coal prices and shortages of electricity and coal, there is also a shortage of electricity in northeast China. Power rationing started in many places last Thursday.
The region’s entire power grid is at risk of collapse and residential electricity is limited, the Beijing News reported on Sunday.
Despite the short-term pain, industry experts said that in the long term, the restrictions will allow power producers and manufacturing units to participate in the country’s industrial transformation from high consumption to low. energy consumption, as part of China’s carbon reduction offer.