Guangdong’s Factories Face Longer Power Cuts Amid Coal Shortage
Lin Chunting
DATE:  Sep 22 2021
/ SOURCE:  Yicai
Guangdong’s Factories Face Longer Power Cuts Amid Coal Shortage Guangdong’s Factories Face Longer Power Cuts Amid Coal Shortage

(Yicai Global) Sept. 22 -- Parts of southern Guangdong province, the Chinese province with the biggest economy, have increased power rationing to factories as a severe shortfall in the supply of coal has led to a surge in the cost of electricity generation and a resulting lack of power.

A power supplier in Dongguan city, a major manufacturing base, has informed businesses via text message that it will cut off electricity to ordinary factories four days this week and that to high-energy consuming plants for five days, a staff member told Yicai Global.

"This is the most rigorous power rationing since the beginning of the year," one factory boss told Yicai Global. "In May and June power supply was only suspended for one to two days a week."

This has to do with the high price of coal, which is making power plants lose money. The cost to generate a kilowatt hour of electricity is now almost CNY0.60 (USD0.09), but the base tariff is just over CNY0.40 per kWh. As a result, power grids are prioritizing supply to residents, utilities and key clients but will ration electricity use by ordinary industrial enterprises.

Other cities in the province, including Foshan, Jieyang and Shantou, have also recently stepped up power cuts. Some factories have been told they can only operate two days out of a seven-day week, and others have been told they can produce one day a week.

"A coal-fired power plant in Guangdong province normally has two generating units, each with an installed capacity of 500,000 kilowatt, but at the moment neither are running normally," an insider at the Guangdong Power Grid said. "One is not working and the other is only operating at half capacity."

Editors: Tang Shihua, Kim Taylor

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Keywords:   Electricity Shortage,Thermal Coal Supply,Industry Commodity,Guangdong