Power, coal shortages likely to re-emerge this year – China Electricity Council

‘Systemic’ problems in the supply, delivery and pricing of power coal will lead to further electricity shortages this year, said Wang Yonggan, vice-general secretary of the China Electricity Council, speaking at a conference.

Wang, cited in a report in the official China Electric Power News, said problems were already evident before the temperatures plunged to record lows in late January. Stockpiles had already begun to drop alarmingly at the end of December.
The government has consistently blamed the weather for the recent coal and power shortages.

With electricity tariffs set by the government, power producers have been unable to pass on surging coal costs to their customers, giving them a disincentive to maintain output at maximum levels.

Transportation bottlenecks have reduced supplies and increased costs, and the closure of small local mines has cut off an important alternative source of coal for power plants located far from the big eastern and northern Chinese markets.

Shortages in southern China have been particularly severe, and a number of plants in southwestern Yunnan and Guizhou provinces were forced to shut down even before snow and freezing temperatures caused mayhem across the region.

According to official figures, coal stockpiles at China’s major power plants were below 20 mln tons by the end of January, less than half normal levels.

Forbes