January 30, 2018 / 3:37 AM / 24 days ago

China's Hebei halts coal to gas heating conversion project: report

SHANGHAI (Reuters) - China’s Hebei province has halted an ambitious program to convert large numbers of coal-fired boilers to natural gas, after supply shortages left homes without heat over the winter, business magazine Caixin reported on Monday.

Caixin, citing a document issued by the local planning agency, said the conversion project would be delayed until 2020, when new pipelines delivering gas from Russia are scheduled to go into operation.

The move marks a significant U-turn by the provincial government, which had identified the switch from coal to gas or electricity as one of its major priorities as it continues to wage its war on pollution.

Hebei, which surrounds the capital Beijing, has been on the front line of a campaign to cut smog. The province reduced concentrations of hazardous airborne particles known as PM2.5 by 7.1 percent last year, but it still accounted for six of China’s 10 most polluted cities.

Highly-polluting coal made up 86.6 percent of Hebei’s energy mix in 2015, far higher than the national rate of 63 percent, and it was under pressure to cut coal production capacity by 40 million tonnes over the 2013-2017 period.

More than 2.5 million households across Hebei were converted from coal to electricity or natural gas in 2017. The province also closed as many as 36,000 coal-fired boilers over the year.

But gas shortages and a lack of infrastructure have disrupted the operations of industrial firms across northern China, and left some villages without heat amid sub-zero temperatures this winter, forcing authorities to suspend the conversions.

Gas suppliers have said a lack of communication between governments and producers had caused them to underestimate demand. Officials have also been accused of implementing the conversion policies with excessive zeal.

China’s environment ministry was forced to make concessions as early as December, saying in a notice it would allow cities to continue burning coal for heating purposes if the required gas infrastructure had not yet been completed.

Despite China’s efforts to switch to cleaner energy, nationwide coal production rose 3.2 percent last year. Coal prices have also soared to record highs this week after blizzards disrupted supplies.

Reporting by David Stanway; Editing by Eric Meijer and Tom Hogue

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