Oil Report

Central China power supply in jeopardy on coal,weather

BEIJING, Jan 7 (Reuters) - Power supplies to all regions covered by Central China Grid Co are in jeopardy after some provinces started rationing power, while demand in others continues to rise, State Grid Corp of China (SGCC), the country’s leading grid operator, said on Thursday.

The regions, including the central and southwestern inland provinces of Chongqing, Henan, Hubei, Hunan, Jiangxi and Sichuan are vulnerable to power supply shocks in winter when hydropower output shrinks and coal shipments are confined by less efficient road and rail transport.

Coastal regions can receive coal in bulk from sea-borne routes even though they are further from coal production centres in northern China.

Parts of China have been experiencing power and natural gas shortages since November as earlier-than-usual cold weather drove up demand and increases in coal and gas supplies were limited.

Light snow is expected in Beijing on Friday after heavy falls on Sunday paralysed the city.

However, analysts doubted a reemergence of the widespread power shortages seen in the summer of 2008, when power plants curbed coal stocks and power output because of soaring coal costs.

Power loads on the central China grid continued to rise entering 2010 after hitting a record high of 94.61 gigawatts (GW) on Dec. 28, SGCC said in a release on its website, sourcing information from Central China Grid Co, one of its five regional grids.

Electricity loads rose to fresh highs in Hunan, Jiangxi and Sichuan on Tuesday after power rationing started on Monday in Hunan, Hubei and Chongqing, leading to an emergency situation in terms of power use, it said.

Power demand in these regions is likely to continue to grow in January and February, with temperatures expected to keep falling.

Coal stocks at coal-fired power plants in the region would decline to less than 6 million tonnes before the Lunar New Year if supplies did not improve in January, and more generators would have to be shut down, the release said.

The Lunar New Year holiday begins on Feb. 14.

A total of 3.35 GW of power generators were shut down on Dec. 31 and 53 power plants, with a generating capacity of 38.84 GW, were running with coal stocks insufficient for seven days of generation.

In addition, 17 generators, or 6.51 GW of capacity, were shut down on Dec. 17 because of malfunctions from either long-term overuse or poor coal quality, according to the release.

Power generating capacity in the region, including all types and sizes of generators, totaled 172.37 GW at the end of 2008. (Reporting by Jim Bai and Ben Blanchard; Editing by Chris Lewis)