Caixin
Jul 20, 2021 02:21 PM
ECONOMY

Chinese Cities Warn of New Power Outages as Heat Strains Grids

Key Chinese cities have warned users of power outages amid historic demand and supply shortages. Photo: Bloomberg
Key Chinese cities have warned users of power outages amid historic demand and supply shortages. Photo: Bloomberg

(Bloomberg) — Key Chinese cities have warned that homes and factories face new power outages as historic demand and supply shortages strain energy grids.

Populous centers including Beijing and Xi’an have alerted electricity users there will be scheduled disruptions as grid operators struggle to maintain overloaded networks. Eleven provinces including eastern manufacturing hubs and landlocked central China, which also suffered outages during last winter’s cold spell, reported record demand and peak-load surges last week, according to the State Grid Corp. of China.

The nation’s electricity providers are experiencing similar pressures seen in the U.S. and other hot spots around the world as temperatures reach alarming levels during the early weeks of summer. Exacerbating the situation in China is a strong economic rebound from the pandemic, which helped spur a 10% surge in power consumption last month.

The heat waves and increased power demand are putting further strain on the coal industry, China’s main energy source. Thermal coal prices jumped above 921 yuan per ton on Monday, close to an intraday record of 944.2 yuan set in May, as supply concerns grow.

The National Development and Reform Commission, China’s top economic planner, last week vowed a massive buildup of coal reserve capacity to meet demand and cool prices. Spokesman Jin Xiandong said on Monday that China will encourage more output of wind, solar, hydro and nuclear power to meet summer peak demand.

Beijing last week cut off power to an industrial park for half-an-hour during a thunderstorm, and warned some surrounding villages and districts of planned outages that could last about 11 hours.

Xi’an, the capital city of China’s coal-heavy Shaanxi province, has asked owners to charge their electric vehicles during off-peak hours. It temporarily cut power to several districts as temperatures remained above 35 degrees Celsius, the local grid operator said in a press conference last week.

Meanwhile, the heat waves across the country are causing floods that disrupt coal production and transportation at mines and harbors, further creating upheaval in supplies. The China Coal Transportation and Distribution Association expects industrial-power demand to grow 15% this summer, while demand in the service sector is seen increasing at more than a 17% year-on-year rate.

Contact editor Michael Bellart (michaelbellart@caixin.com)

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