May 11, 2011 / 7:10 PM / 8 years ago

China April power output surges, still lags demand

BEIJING (Reuters) - China’s electricity generation rose 11.7 percent from a year earlier in April, the third straight month of double-digit growth, but slowed on the month and is unlikely to be enough to prevent summer shortages during peak seasonal demand.

Power output slipped 4.3 percent from a month earlier, in line with weakened industrial production and as coal stocks at power plants dwindled in some regions.

Chinese power plants generated 366.4 billion kilowatt hours of electricity last month, with output in the first four months up 12.6 percent from a year earlier to 1,430.5 billion kwh, the National Bureau of Statistics said on Wednesday.

Thermal power plants, which generate more than 80 percent of national output, produced 10.9 percent more power than a year earlier in April, but daily production declined nearly 2 percent from a month earlier.

“Overall China’s power generation capacity was enough, the slowdown in daily generation level showed thermal power plants’ reluctance to beef up production due to operating losses,” said a power analyst with a foreign consultancy in Beijing, who declined to be named due to company policy.

“Power generators had either limited financial resources or little incentive to build up more coal stockpiles despite expected higher electricity demand in summer.”

Coal stocks in power plants in central Hunan province have fallen to levels below those needed to supply four days of generation and half of coal-fired power plants resorted to maintenance.

Some cities in the province has started cutting power supplies to households due to increasing power shortages.

Coal stocks in on-grid power plants in Hubei also declined to a warning level by the end of April, the National Development and Reform Commission said in a report on its website (www.ndrc.gov.cn) on Wednesday.

Power demand in many industries and regions remained fairly strong in the world’s second-largest economy, even though peak consumption in summer has yet to arrive.

China was likely to face the worst summer power shortages in years this year, as many thermal power plants, mostly coal-fired, were unable to afford rising coal costs due to power price caps.

In addition, insufficient power generation and transmission capacity and falling water stocks held by hydropower plants also pose a threat to electricity supplies in summer.

Power shortages have hit central, eastern, southern and southwestern provinces, and coal stocks in some power plants may continue their falls in the coming months and strain electricity generation.

In a further blow for coal supplies in Henan province, which encircles Beijing, the government of Henan’s Zhenghou municipality asked all the municipality’s coal mines to suspend operations after a spate of accidents, Hong Kong listed Dynamic Energy Holdings said in a statement.

(For stories on China power market, search with O/CNPOWER)

Editing by Ken Wills and Michael Urquhart

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