Power Shortages Expected to Continue Next Year
    2009-12-24 08:59:13     Global Times      Web Editor: Cao
Power shortages in some provinces caused by low coal stockpiles for electricity generation will last until March or later, and analysts said electricity prices might be raised next year due to the soaring price of coal.

Power shortages in some provinces caused by low coal stockpiles for electricity generation will last until March or later, and analysts said electricity prices might be raised next year due to the soaring price of coal.

"Hubei Province has limited industrial and commercial enterprises' electricity use since December 12, and the limitation will continue at least until March," said Yang Yong, deputy chief engineer of Hubei Electric Power Company, an affiliate of the State Grid Corporation, Wednesday.

He said the limitation of power use is mainly targeted at high-energy consuming enterprises such as ferroalloy and aluminum plants, while households are little affected by the limitation.

The Ministry of Railways (MOR) has sent a daily total of 1,550 carriages for coal transportation to Hubei Province from Henan, Shaanxi and Shanxi provinces since December 18. The effort is slated to continue until January 18.

Yang said the ministry's efforts could help ease the decrease in coal stocks.

"Currently our coal storage is at one million tons, and can support the province's power consumption for 10 days under the limitation measures," he said.

Power plants in Hunan, Jiangxi and Anhui provinces have also faced decreasing coal stocks. Figures from the MOR show that the country's 349 power plants, which provide power for local consumption, had a total coal stockpile of 22.74 million tons as of Sunday and could only support 9 days of power generation.

"The rapid economic recovery and unexpectedly cold weather have boosted electric-ity consumption, but the current coal supply cannot satisfy power plants' demand along the Yangtse River, which usually relies on hydropower," said Li Ting, a coal industry analyst at the China Commercial Distribution and Productivity Promotion Center, an affiliate of the Ministry of Science and Technology.

The country's power consumption rose to 328.4 billion kilowatt-hours (kWh) in November, a 27.63 percent year-on-year increase, while power generation jumped 26.9 percent year-on-year to 323.4 billion kWh, according to figures from the National Development and Reform Commission (NDRC) and the National Bureau of Statistics.

Li said hydropower is largely affected by the weather, and the coal supply in Shanxi Province has decreased this year because the government shut down small coal mines. Meanwhile, coal resources from regions such as Inner Mongolia and Ningxia are difficult to get to central provinces due to limited transportation capacity.

Analysts from securities companies expect coal prices might rise 5-8 percent next year and pose a threat to the price of electricity.

Under current rules launched in 2004 by the NDRC, if coal prices increase by more than 5 percent in a six-month period, the government can adjust electricity prices.

"Consumers might finally pay the bills for soaring coal prices," Li said.



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