China power shortages expand to coastal Zhejiang

Byswb

Updated Fri, 15 Jan 2010 00:00:00 GMT

China's Zhejiang province has asked power-intensive firms to avoid electricity use during peak hours to ensure supplies to residents and other users, a local government official told Reuters on Thursday.

The coastal province added itself to a list of regions, especially in central China, grappling with insufficient power during the winter as demand surged from economic recovery and harsh weather amid insufficient coal stocks at power plants.

Sinopec's (0386.HK) crude oil production in its largest Shengli oilfield was also trimmed last week due to power rationing in eastern Shandong province.

"We started paring power loads by 1.2 gigawatts (GW) from Tuesday by shifting demand from firms such as in cement and chemical sectors from 9:00 am to 11:30 am each day," said the official familiar with the local power sector, but who declined to be named as he was not authorised to speak to the media.

He said power demand in Zhejiang province was at a high level of some 36.5 GW these days, but supplies amounted to around 35 GW, including nearly 6 GW supplies from sources such as Qingshan Nuclear Power Plant that are out of the province's control.

"All types of generators, including a fleet of heavy oil-fired ones with total capacity of less than 1 GW, were humming at full capability now," he said.

Coal stocks in coal-fuelled power plants in Zhejiang were enough for 6.6 days of generation as of Wednesday, the official said, adding that daily coal consumption by power generators were 190,000 to 200,000 tonnes.

"Many people went out for coal supplies, regardless of what coal prices would be."

Spot thermal coal prices at Qinghuangdao, China's leading coal port where a chunk of coal supplies to coastal China is loaded and dispatched, has risen to their highest since the end of October 2008, levels analysts said were loss-making for power plants if they did not have cheaper long-term supplies.

Coal stocks in some 380 major power plants across the country that account for about half of China's power generating capacity recovered slightly to 20.2 million tonnes on Wednesday from a 17-month low on Sunday. That was only enough for eight days of generation and well below a China industry norm of about two weeks, latest industry statistics showed.