Power crunch turning the lights out in China
The Economic Observer newspaper reported that China’s hydropower plants have fed 21.7 billion fewer kilowatt-hours on to the state grid so far this month due to the dry season, but thermal power generation had also been losing steam due to thermal coal and natural gas undersupplies.
The retail price of thermal coal from the resource-rich Shanxi province has surged to 663 yuan per tonne this week, a two-year high, while the LNG net price for power producers hit 7,800 per tonne.
Yu’an, a popular financial analysis blog on WeChat updated by former Xinhua reporters, revealed that Beijing’s Australian coal ban had also left many power producers in limbo
“Power plants have in the past years retrofitted their equipment to use quality Australian coal but they cannot switch to domestic alternative overnight simply because comparable pure thermal coal is not easy to source from Shanxi and Inner Mongolia due to stricter safety and environmental rules,” noted one post on the blog.
“Imports from Russia and Indonesia are still on their way to China.”
It also added that more than 80 Australian vessels with coal had been “held up” off Chinese ports. These hold about 8.8 million tonnes but despite reports about individual ports granting entry to some ships most sit at sea waiting for a U-turn from Beijing on its coal ban.
