China’s state grid says electricity supplies have stabilised after power crunch, but winter shortages still a risk

Country has been hit by worst energy crisis in decades as a result of coal shortages and the arrival of winter will only add to the pressure on supplies

State Grid Corporation says the ‘grand challenge’ of keeping the power on means it will have to perform a balancing act over the winter

Reading Time:2 minutes

China has been boosting its coal supply to keep the lights on. Photo: Reuters

Published: 6:00am, 8 Nov 2021Updated: 7:25am, 8 Nov 2021

Electricity supplies in China have largely stabilised after the recent power crunch but winter will still be a challenge and localised shortages are still a possibility, the state electric corporation has warned.

It said high power consumption, the demand for heating in the north with the onset of winter and a shortage of water for hydropower production were among the challenges it faced.

“During this winter and spring next year, there will be ‘tight overall balancing and regional shortages’ in the grid, and the grand challenge to supply electricity will continue,” the State Grid Corporation said in a statement.

The country is currently facing its worst power crunch in decades after the electricity supply was hit by coal shortages and aggressive energy consumption curbs to meet emissions targets.

These shortages also pushed up the price of coal, but because power companies are only allowed to pass some of the costs on to consumers, they resorted to cutting their output to remain profitable.

Since August, at least 20 out of the country’s 31 provinces have introduced power rationing to maintain supplies.

China’s economic planner, the National Development and Reform Commission, has met coal producers to limit prices to 1,200 yuan (US$188) a tonne for winter and allowed businesses and industries to buy electricity at market prices. It also launched a nationwide crackdown on coal hoarding and speculation.

The State Grid Corporation said there was currently no need to place restrictions on electricity use except for temporary curbs on some highly polluting and energy-intensive industries.