China faces power shortages even before summer peak

By Jim Bai and Tom Miles; Editing by Michael Urquhart
18 April 2011 BEIJING (Reuters) – Central China’s Hubei province has joined a growing list of regions facing coal shortages, with a warning on Monday that it is very likely to start rationing power this month if coal supplies remain tight and low water stocks continue to curb hydropower generation. China has warned that power shortages this summer could be the worst for years, with power generation and transmission systems unable to cope with rising demand. The east, north and south of China are likely to be hit the hardest. Some central and southwestern Chinese provinces, however, have also begun feeling the pinch because their hydropower plants are wilting after a lack of rainfall. Coal inventories in thermal power plants in regions with little of their own coal are dwindling due to pricing and transportation issues. Chinese thermal coal prices hit a three month high last week as power producers scrambled for summer supplies. Coal inventories in thermal power plants in Hubei have fallen by 17,000 tonnes a day to 1.66 million tonnes on April 12, producing an even more serious shortage than last winter, a report on the State-owned Assets Supervision and Administration Commission website (www.sasac.gov.cn) showed. The report was sourced from the State Grid Corp of China, the country’s main power grid operator. Given the high price of coal, most coal-fired power plants are taking a wait-and-see approach to purchases in hope that prices might fall, the report said. Coal consumption also increased in Henan, the province that supplies most coal to Hubei, which in turn cut the amount available for Hubei. Water levels in major hydropower plants in Hubei, except for the huge Three Gorges dam, were lower than historical averages after expected March rains did not come, the report added. …

China regions face power shortage even before summer peak via The Oil Drum