China’s power crisis: Beijing draws up plans to increase coal output, lower energy prices as temperatures plunge
- China’s power crunch has already had an impact on the economy and raised concerns ahead of the winter heating season, which has started early in some provinces
- Thermal coal futures hit an all-time high on Tuesday, but senior officials have promised to increase coal production and lower energy prices
Beijing has stepped up its control over the nation’s power market amid a crunch, pledging to intervene in the coal market, investigate pricing mechanisms and crack down on the speculative fuel trade as China tackles the ongoing problem that is threatening energy security and economic growth.
Beijing’s desire to recalibrate the power market signals its focus on buttressing its economy first through the refinement of existing economic structures, with no mentions of carbon emissions.
China’s economic planner, the National Development and Reform Commission (NDRC), previously warned local governments about meeting carbon emissions targets this year, which triggered some regional authorities to cut electricity supplies.
The current price increase has completely deviated from the fundamentals of supply and demand, and with the heating season approaching, prices are still showing a trend of further irrational increases
But on Tuesday, the NDRC stressed that while power intensive projects must be controlled, electricity should be used in an “orderly” manner and any power rationing should not affect the general public.