China copes with power shortage: comments on macro control

Byzjx

Updated Tue, 20 Jul 2004 00:00:00 GMT

Since the coming of summer, power shortage has drawn universal concern.

State Grid Corporation of China estimates that the deficiency of power this year will reach 30 million kilowatts and China will face the situation of the greatest scarcity of power since the 1980s.

The cause of power shortage and the way to alleviate the severity of the matter has become the focus in the economic life.

Power shortage affects economic life

The lacking of power has seriously affected the economic life since the summer of 2003, said Wang Guoping, standing committee member of Zhejiang provincial Party committee and party secretary of Hangzhou, the capital of east China's Zhejiang Province.

And that is true. Zhejiang Province limits power consumption by a switch-off every day except during the 10-day Spring Festival Holiday. In the first five month of this year, the amount of power consumption limited as such reached 4.2 billion kilowatts, exceeding the total of the whole year of 2003, accounting for as 73.5 percent of the electricity amount limited in this way by east China grid. Ordinary enterprises could have normal power supply only four days a week and some even have supply only three days. To lessen power scarcity, some enterprises have to buy small diesel-driven generators, which have been eliminated by official State decree. Now 7.2-million-kw such generators are in operation in the province.

Zhejiang has been the most needy province for electricity with a power load rate as high as 97 percent, which means the power grid is operating under full capacity every day, leaving power department basically no room for regulation and control, said Zhuang Huqing, general manager of the Zhejiang Provincial Power Corporation..

East China grid covers Shanghai municipality, Jiangsu, Zhejiang, Anhui and Fujian provinces, a region enjoying the most vigorous economy as well as an area having the highest demand for the most serious shortage of power.

From July last year, the east China grid has limited power consumption by a switch-off, except the National Day last year and the seven-day Spring Festival holiday of this year. The gap in 2004 will be at least 18 million kilowatts, 60 percent of the national total.

Ma Zonglin, general manager of Fujian Provincial Power Corporation, says that South China's Fujian Province has suffered the severest power shortage this year in history. The province, whose hydropower installed capacity makes up nearly half of its power generation, was hit by a severest drought ever since the emergence of hydrological records, and the amount of its coal reserve in thermal power plants was the lowest in history.

Acting upon the requirement of the State Council, the province's power departments, in the face of electricity lacking, strengthen power-saving publicity, institute a peaking price, limit supply to enterprises with high consumption and serious pollution, and ensure supply for residents and key departments.

Main reasons of power shortage

Inadequate construction of power resources is the main reason for power shortage, said Zhang Qiping, chief engineer of the East China Grid Co., Ltd. From 2000 to 2002, the grid started few power projects and basically no big one. Furthermore, a construction period is needed for the newly started projects, for instance, the first unit with a single machine capacity of over 600, 000-kws takes three years to complete and go into operation and the second one takes two years, that is to say, the East China Grid has not a single 600,000-kw unit starting construction in six years. The projects which started operation from 2001 to 2003 generated electricity less than 3 million kilowatts, a less than 10 percent growth. But their load grew by 20 percent.

Economic development at an excessive rate, especially high energy-consumption industries, also accounts for the power scarcity, said Lu Qizhou, deputy general manager of the State Grid Corporation of China.

Statistics show that recently, China's industrial power consumption saw a year-on-year increase of 18.3 percent, 74.9 percent of the total consumption. The five industries--metallurgical, chemical, power, nonferrous metal, construction material--consumed 60.1 percent of the total industrial power consumption.

Another reason is the unbalanced power structure: over-high proportion of thermal power plus coal inadequacy.

Presently thermal generation takes up 75 percent of China's total (the figure in the United States is 51 percent). Despite the rich coal reserve, China lags far behind in construction of the output capacity of coal. Additionally with limited railway transportation, the double bottleneck hinders supply of for-power coal.

From 2003, southern provinces received warnings. The east China grid suspended generation because of coal shortage, leading to a loss of over one million kilowatts in the first half of 2004. Presently the coal reserve in some plants is only enough for just one day.

How to cross the power gap?

China's power shortage is both in load and supply. Zhang Qiping suggests constructions of economy and power resources go hand in hand and the latter be maintained appropriately ahead. Therefore a scientific prediction and planning is needed as well as revision and timely adjustment.

To make both ends meet, in the future 15 years, China must add extra power generators of 500 million kilowatts. It means that a 130 percent increase from the nation's total capacity of 380 million kilowatts.

Power industry is a systematic industry whose maximum efficiency requires coordination among production, transportation and consumption. China should solve not only the problem of the scale and size, but also the irrational structure, lagging grid construction and unduly low generation through recyclable resources.

Nuclear power only accounts for on average 17 percent of the world's total. 17 countries have over one fourth of their generation from nuclear power plants: France 85 percent and the United States 30 percent. However, the figure in China is only 2.3 percent.

Official with the International Energy Agency (IEA) said that China needs a solution of diversification: to develop new energy resources while enhancing the efficiency of present ones. It is no less necessary for China to increase nuclear power.

China's consumption for per 10, 000-yuan Gross Domestic Product (GDP) is far higher than the world's best so energy-saving has huge potential.

Power experts remind that the shortage may be eased in the next year and a general balance is expectable in 2007. More thinking is needed when localities busy themselves in projects to avoid another vicious circle.