January 18, 2018 / 9:07 AM / a year ago

UPDATE 3-As gas crisis hit, China coal miners, utilities ramped up output

    * Coal accounted for 77.5 pct of total power output in Dec
    * Coal output highest since Dec 2015
    * Thermal power highest on government records back to Feb
    * Data undermines long-term aim to wean nation of coal power

 (Adding graphics)
    By Josephine Mason and Muyu Xu
    BEIJING, Jan 18 (Reuters) - China's coal miners and thermal
power plants ramped up output to their highest in years in
December, data showed on Thursday, in a rush to feed
unexpectedly strong demand from millions of homes as natural gas
shortages triggered a winter heating crisis.    
    The jump came as millions of homes across northern China
used more electricity and gas to heat their homes after being
forced to switch from coal. 
    It also reflects a ramp-up in coal-fired power use due to
the gas shortages caused by the ambitious plan, undermining the
government's long-term plan to boost clean energy use and wean
the nation off its most-used fuel.
    The production of thermal electricity, generated almost
entirely by coal-fired capacity, rose to 441.7 billion
kilowatt-hours (kWh), the highest in the National Bureau of
Statistics' records going back to February 2015.
    "This year, Beijing's pullback on coal-to-gas conversion has
benefited coal consumption," said Cheng Gong, analyst at China
National Coal Association.
    Electricity demand in December is typically higher as people
crank up the heat in their homes because of colder temperatures.
    However, the above-normal demand last month caused thermal
power output to rise 17 percent from November and 3.6 percent
from December 2016. Full-year output rose 4.6 percent.
    Last month, the world's top coal miners churned out their
highest tonnage since December 2015.
    The data highlights the challenge for Beijing as it seeks to
curb coal use, reduce excess mining capacity and boost wind and
solar power.
    In early December, Beijing scaled back its conversion of
households to natural gas heating from coal across northern
China after provinces almost ran out of gas.
    It also eased restrictions on coal-power projects.

    Thermal power accounted for 77.5 percent of total output in
December, up from 72 percent in November, well away from the
government's target for coal-fired power to account for 55
percent of installed capacity by 2020.
    The most-active coal futures on the Zhengzhou Commodity
Exchange rose to a record 650 yuan ($100.99) a tonne on
Thursday over concerns of tight supplies in the peak heating
period. Coal futures surged over 70 percent in 2017. 
    The country generated a total of 569.9 billion kWh of power
in December, the highest since August, up 6 percent from a year
earlier and 10 percent higher than November, the data showed.
    Full-year power generation reached 6.28 trillion kWh, up 5.7
percent compared with 2016.
    Below is a breakdown of the power sources measured in kWh:
             December     Pct change        2017   Pct change
                            yr-on-yr                 yr-on-yr
 Power       569.9 bln           6.0   6.28 trln          5.7
 Thermal     441.7 bln           3.6   4.61 trln          4.6
 Hydro       73.6 bln           14.0   1.08 trln          3.4
 Nuclear     22.2 bln            3.8   248.1 bln         16.3
 Wind        27.1 bln           25.7   269.5 bln         21.4
 Solar       5.3 bln            46.8    64.8 bln         38.0

 (Reporting by Josephine Mason and Muyu Xu; Editing by Christian
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