As cold blast hits, China’s utilities warn of heating, power cuts
BEIJING: Four of China’s top utilities have told the government some regions will face heating and electricity shortages due to tightening supplies of coal ahead of the Lunar New Year, the latest sign that the nation’s winter heating crisis may deepen.
China’s State Power Investment Corp (SPIC), China Datang Corp, China Huaneng Group and China Huadian Corp have asked the government in a letter to boost supplies of coal and tame a wild price rally.
The letter, reviewed by Reuters, was sent to the National Development and Reform Commission (NDRC) and dated Jan 22. A source familiar with the letter confirmed its authenticity. NDRC was not immediately available for comment.
“If the coal inventories don’t rise to a reasonable level by Spring Festival, then it will be really difficult to deal with the drop in temperatures in some key regions and in the winter heating regions,” the letter said.
Some utilities only have enough supplies for two to three days, the letter said, while others are getting hit by a big increase in rail transportation fees.
Spring Festival, also known as Chinese or Lunar New Year, starts in mid-February this year. The week-long holiday is the longest in the Chinese calendar.
Thermal coal futures have jumped nearly 10 per cent this year, extending a months-long rally, as utilities have scrambled for supplies this week to deal with soaring demand because of a cold snap that has swept across the north.
Utilities are under particular pressure due to low natural gas supplies after Beijing ordered millions of households and some industrial plants in northern China to change to gas heating from coal as part of its war on pollution.
Yesterday, the most-active thermal coal futures contract closed at 673 yuan (US$106.50) per tonne, up 0.63 per cent, after hitting a record intraday high of 674.2 a tonne. — Reuters