China warns power plants running out of coal; US urges China to join IEA

Chinese power plants are running out of coal, with less than three days’ supply in some areas, the government said Tuesday, adding to China’s logistical headaches amid earthquake relief efforts.

It is the second time in three months that Chinese power plants have run short of coal, reflecting the unintended effect of Beijing’s awkward use of price controls — a throwback to communist central planning — to shield its public from record global energy costs.
Some 32 power plants already have shut down due to lack of fuel, the State Electricity Regulatory Commission said in a report. It said two were in Sichuan province, where last week’s magnitude 7.9 quake damaged the power supply grid.

In February, freak snowstorms caught power plants without adequate coal supplies, causing blackouts and factory shutdowns in a country that relies on coal for 70 percent of its electricity.

Utility companies have let coal stocks run down and are buying less fuel to avoid losses after Beijing froze power prices last year to cool inflation but let market-set costs for fuel continue to rise.

The SERC gave no indication how Beijing might respond to the latest shortages. An employee who answered the phone in its press office referred questions to the Cabinet’s National Development and Reform Commission. The NDRC did not respond to requests for comment.

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Also Tuesday, a U.S. official urged Beijing to join the International Energy Agency — a group of major oil consumers that includes the United States and European governments — and aid its efforts to keep petroleum markets stable in times of crisis.

“I believe it is important for China and other key economies in the world, such as India, to prepare to eventually join the IEA as full members,” Daniel S. Sullivan, an assistant U.S. secretary of state, said at a business conference.

International Herald Tribune