Bloomberg's website reported on May 31 that while struggling to deal with the worst possible power shortage in history, China will increase the prices of non-resident electricity in 15 provinces and cities from June to curb demand and increase power generation. This is the first time in more than one year to increase the price of non-residential electricity.
According to the State Grid Corporation of China, China is struggling with a shortage of electricity supply, and this summer's electricity gap is likely to reach as high as 40 million kilowatts, more than the worst electricity shortage in 2004. This time the price of non-residential electricity has been raised for the first time since November 2009. Earlier, due to rising coal prices and government restrictions on electricity prices, some power generation companies were forced to reduce production or even stop production.
The article on the May 30 issue of the German "Manager Magazine" website titled: Enterprises in China are prepared to cope with the power shortage. This is not just a faint warning signal: once every three days in April, it will be powered off once every two days in early May. "Now it's better. At present, they stop the electricity every four days," said a manager of Zhejiang Cixi Huada Toy Factory.
At present, in China's densely populated and highly developed coastal areas, many companies are similar to the toy factory in Cixi. These companies had to cut production or purchase diesel generators. For small, profitable private companies, both are big burdens. This year's burden is particularly heavy, because in 2011 China's power supply gap will reach the highest value for many years.
China's private economic center in Zhejiang this summer, the power supply gap may be as high as 3.5 million kilowatts. The adjacent Jiangsu Province will even reach 11 million kilowatts.
Experts believe that the situation will not improve in the short term. Although the National Development and Reform Commission increased the price per kilowatt-hour by 1.67 points in 15 provinces and municipalities to encourage electricity saving and help power plants, the new price is not enough to make the power plant profitable.
Many experts demand that more market mechanisms be allowed to enter the energy sector, such as releasing electricity prices. So far Beijing has not dared to do so because of fears that consumers are angry, and now they have to cope with 5% inflation. In addition, experts recommend that the government provide subsidies for power plants to buy coal and formulate coal reserves.
United States “Forbes†biweekly website May 29 article title: Who closed the Chinese lamp?
China's State Grid Corporation of China recently predicted that the worst electricity shortage in history this summer will be even greater than Argentina’s total installed capacity, even worse than in 2004.
We have not even entered the peak season and we have already encountered a shortage of electricity. The coastal area will be hit hardest this year, with 26 power shortages in 31 provinces, autonomous regions and municipalities in China.
In 2004, the main cause of power shortage was the lack of sufficient railway lines to transport coal to power plants. In addition, there are too few power plants.
This year, there is enough railway capacity, so the installed capacity is not a problem. So why is there a serious power shortage at this moment? First of all, the ongoing drought now is half a century, and it may be the worst in a long time. The low water level in the rivers causes the hydroelectric power stations to produce less than one-fifth of the normal level. However, lack of water is not a major problem. Hydroelectric power stations generate only about 22% of the country's total power generation, and most of the remaining power generation comes from coal-fired power. The more important factor is that coal prices continue to soar. Spot coal prices have risen 20% this year, partly because Japan has increased its purchases to make up for the recent shutdown of nuclear power plants. However, China’s electricity price has only increased by 2 this spring. 5%.
We have also witnessed this price gap in the past five years. At that time, the price of coal had doubled, while the price of electricity rose by only one third. As a result, power producers were severely squeezed. Thermal power plants have lost 10 billion yuan in the first four months of this year.
The cause of this crisis was Beijing's manipulation of electricity prices. Technologists and officials can tell power producers what they can charge, but they cannot stop the inevitable consequences. As power companies generate power losses, they take measures to minimize losses. Although power is urgently needed, many power plants are now shut down for maintenance.
Not surprisingly, Beijing's misaligned electricity prices have brought problems to the entire economy and caused unexpected consequences. A strategy that aims to promote production by maintaining low input prices eventually results in a decline in output. Analysts said that the power shortage may reduce the GDP growth rate of the quarter by 0.2% to 0.5%. In the next quarter, the impact will be even greater.
Electricity shortages are almost entirely the product of poor economic planning.
According to the State Grid Corporation of China, China is struggling with a shortage of electricity supply, and this summer's electricity gap is likely to reach as high as 40 million kilowatts, more than the worst electricity shortage in 2004. This time the price of non-residential electricity has been raised for the first time since November 2009. Earlier, due to rising coal prices and government restrictions on electricity prices, some power generation companies were forced to reduce production or even stop production.
The article on the May 30 issue of the German "Manager Magazine" website titled: Enterprises in China are prepared to cope with the power shortage. This is not just a faint warning signal: once every three days in April, it will be powered off once every two days in early May. "Now it's better. At present, they stop the electricity every four days," said a manager of Zhejiang Cixi Huada Toy Factory.
At present, in China's densely populated and highly developed coastal areas, many companies are similar to the toy factory in Cixi. These companies had to cut production or purchase diesel generators. For small, profitable private companies, both are big burdens. This year's burden is particularly heavy, because in 2011 China's power supply gap will reach the highest value for many years.
China's private economic center in Zhejiang this summer, the power supply gap may be as high as 3.5 million kilowatts. The adjacent Jiangsu Province will even reach 11 million kilowatts.
Experts believe that the situation will not improve in the short term. Although the National Development and Reform Commission increased the price per kilowatt-hour by 1.67 points in 15 provinces and municipalities to encourage electricity saving and help power plants, the new price is not enough to make the power plant profitable.
Many experts demand that more market mechanisms be allowed to enter the energy sector, such as releasing electricity prices. So far Beijing has not dared to do so because of fears that consumers are angry, and now they have to cope with 5% inflation. In addition, experts recommend that the government provide subsidies for power plants to buy coal and formulate coal reserves.
United States “Forbes†biweekly website May 29 article title: Who closed the Chinese lamp?
China's State Grid Corporation of China recently predicted that the worst electricity shortage in history this summer will be even greater than Argentina’s total installed capacity, even worse than in 2004.
We have not even entered the peak season and we have already encountered a shortage of electricity. The coastal area will be hit hardest this year, with 26 power shortages in 31 provinces, autonomous regions and municipalities in China.
In 2004, the main cause of power shortage was the lack of sufficient railway lines to transport coal to power plants. In addition, there are too few power plants.
This year, there is enough railway capacity, so the installed capacity is not a problem. So why is there a serious power shortage at this moment? First of all, the ongoing drought now is half a century, and it may be the worst in a long time. The low water level in the rivers causes the hydroelectric power stations to produce less than one-fifth of the normal level. However, lack of water is not a major problem. Hydroelectric power stations generate only about 22% of the country's total power generation, and most of the remaining power generation comes from coal-fired power. The more important factor is that coal prices continue to soar. Spot coal prices have risen 20% this year, partly because Japan has increased its purchases to make up for the recent shutdown of nuclear power plants. However, China’s electricity price has only increased by 2 this spring. 5%.
We have also witnessed this price gap in the past five years. At that time, the price of coal had doubled, while the price of electricity rose by only one third. As a result, power producers were severely squeezed. Thermal power plants have lost 10 billion yuan in the first four months of this year.
The cause of this crisis was Beijing's manipulation of electricity prices. Technologists and officials can tell power producers what they can charge, but they cannot stop the inevitable consequences. As power companies generate power losses, they take measures to minimize losses. Although power is urgently needed, many power plants are now shut down for maintenance.
Not surprisingly, Beijing's misaligned electricity prices have brought problems to the entire economy and caused unexpected consequences. A strategy that aims to promote production by maintaining low input prices eventually results in a decline in output. Analysts said that the power shortage may reduce the GDP growth rate of the quarter by 0.2% to 0.5%. In the next quarter, the impact will be even greater.
Electricity shortages are almost entirely the product of poor economic planning.
Bode Industrial Co., Ltd. , http://www.zjatvquad.com