Local governments in China are ordering the power cuts as they try to avoid missing targets for reducing energy and emissions intensity.
- China has implemented power cuts across more than 10 provinces, amid electricity supply
issues and to enforce environmental regulations.
- Local governments have ordered the power cuts to avoid
missing targets for reducing energy and emissions intensity.
- Record high coal prices are also making it unprofitable for
many power plants to operate.
Power rationing and forced cuts to factory production in
China are widening amid electricity supply issues and a push to enforce
The curbs have expanded to more than 10 provinces, including
economic powerhouses Jiangsu, Zhejiang and Guangdong, the 21st Century Business
Herald reported Friday. Several companies have reported the impacts of power
curbs in filings on mainland stock exchanges.
Local governments are ordering the power cuts as they try to
avoid missing targets for reducing energy and emissions intensity. The country’s
top economic planner last month flagged nine provinces for increasing intensity
over the first half of the year amid a strong economic rebound from the
Meanwhile record high coal prices are making it unprofitable
for many power plants to operate, creating supply gaps in some provinces, the
Business Herald reported. If those gaps expand the impact could be worse than
power curtailments that hit parts of the country during the summer.
In Zhejiang, about 160 energy-intensive companies in the
textile, dyeing and chemical fiber industries have been ordered to halt
production to meet energy consumption targets, Caixin reported. About 80% of
the companies are in Ma’an, where a production halt order was issued from September
21-30, the report said, citing an unnamed official.
Emergency power cuts were also ordered across 14 cities in
the northern province of Liaoning after the grid suffered supply shortfalls,
according to a notice on the local grid operator’s social media late Thursday. “Power
suppliers will spare no effort to keep providing electricity to residents,
hospitals, schools, radio, TV, telecommunications, transportation hubs and
other important users,” the notice said.
Yunnan province is cancelling electricity price discounts
for aluminium smelters that made power costs about 16%-22% cheaper than industry
average, according to a separate Caixin report. Yunnan Aluminum Co. last week
said its production through the rest of the year will be significantly reduced
because of provincial energy consumption controls.
The CSI 300 Utilities subgauge is up 19% this month, hitting
the highest since late 2015 this week amid tight supply. Huaneng Power
International Inc. and GD Power Development Co. are up at least 40% this month,
leading on the subgauge, while smaller power stocks such as Zhongmin Energy Co.
and Shanghai Electric Power Co. have added at least 70%.
The widening power curbs are also impacting agriculture,
forcing the shutdown of several plants in Jiangsu and the northern port city of
Tianjin that crush soybeans into oils used in salad dressings and margarine and
meal used for animal feed, AgriCensus reported.