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Heatwave: China switches back to coal as record heat wave causes power shortages

The Yangtze River, a crucial river in the country, has dried up in places due to extreme heat and sparse rainfall. The drought has affected six provinces along the river, affecting water supplies for tens of thousands of people and forcing the closure of factories in some provinces to preserve electricity supplies.
Sichuan, famous for its rich water resources and which accounts for 21% of China’s hydropower, saw its hydropower capacity plunge 50% this month, according to the state grid. The relentless heat wave has also resulted in unprecedented demand for electricity, pushing the region’s power grid to the brink.

Since Sichuan supplies electricity to other parts of China, the hydropower shortage has affected several cities in the east of the country, including Shanghai.

To alleviate the electricity shortage, China has increased the production and imports of coal to generate electricity.

Power plants nationwide burned 8.16 million tonnes of thermal coal a day during the first two weeks of August, up 15% from a year ago, according to the most recent data. of the National Development and Reform Commission. On August 3, daily thermal coal consumption reached a record high of 8.5 million tons.

China is now more dependent on coal for electricity than it was last year. In July, electricity produced from coal increased by 22% compared to June, accounting for 69% of the total. Last year, coal-fired power accounted for 67.4 percent of China’s electricity supply.

Sichuan Coal Industry Group, the province’s largest coal miner, has more than doubled its thermal coal output to nearly 15,000 tons per day since mid-August, according to the government-owned Sichuan Daily earlier this week.

Sichuan Guang’an Power Generation, the region’s largest coal-fired power station, also increased its power generation by 170 percent this month, compared to the same period last year, according to an article published on Tuesday. on the Sichuan Government website. The powerhouse expects August power generation to jump 313% from a year earlier.

On Friday, the province also opened its first national coal reserve in the city of Guang’an. When full, it will be able to supply six million metric tons per year.

Sichuan ordered most factories to close for 11 days until Thursday in response to the electricity crisis. Energy rationing has disrupted supply chains and impacted production at big companies, such as Toyota, Foxconn and Tesla in Shanghai.
Heatwave: China switches back to coal as record heat wave causes power shortages

Coal is “indispensable”

On Wednesday, Chinese Vice Premier Han Zheng said Beijing would further support coal-fired power generation at this “critical time” to ensure “there is no accident in the supply of coal.” electricity”.

The country is also buying more coal from other countries, especially Russia, at a time when Western countries are avoiding Moscow because of its invasion of Ukraine.

Heatwave: China switches back to coal as record heat wave causes power shortages
Customs statistics released on Saturday showed China imported 7.42 million tonnes of coal from Russia last month, up 14 percent from the same period last year. It is also the highest monthly figure since comparable statistics began in 2017.

Current power shortages have proven that coal is “indispensable”, said analysts at Guotai Jun’an Securities, a Shanghai-based brokerage firm, in a report released earlier this week.

“The reduction in hydroelectricity has made [the country] more dependent on coal,” they said, expecting more coal-fired power plants to be built if extreme weather conditions persist in the future.

Capital Economics analysts also expect China to increase coal production and imports to fill the gaps.

“But it is far from certain that additional supplies will arrive in time,” they said in a note late last week.

“If coal stocks continue to fall, it could take a few days before authorities are forced to implement electricity rationing more widely,” they added.

CNN Beijing Bureau, Angus Watson and Akanksha Sharma contributed to this report.


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