ELECTRICITY IN CHINA
Electrical power is supplied mainly by the state-owned enterprises. China has restructured its power industry by closing a large number of small thermal power plants with high coal consumption, heavy pollution, and poor economic efficiency. China has developed a national power sector and regional power grids and implemented of an electricity tariff reform aimed at addressing inefficient power distribution and usage. [Source: Robert Guang Tian and Camilla Hong Wang, Worldmark Encyclopedia of National Economies, Gale Group Inc., 2002]
Electricity output in China more than doubled between 2000 and 2010, when China surpassed the United States as the world’s largest consumer of electricity, Keith Bradsher wrote in the New York Times at that time: “China’s 700 million rural residents have been on a two-year buying spree of electric devices, purchasing hundreds of millions of air-conditioners and other energy-hungry appliances with government subsidies aimed at narrowing the gap in living standards between cities and rural areas.” China’s consumption of electricity increased more than tenfold 1980, when the Communist Party was just beginning to dismantle a Soviet-style command economy, and 2010.
Access: electrification: total population: 100 percent (2020)
Production: 5.883 trillion kilowatt-hours (2016 est.), number one in the world.
Production in 2005 2.732 trillion kilowatt-hours; in 2000: 1.16 trillion kilowatt hours.
Consumption: 5.564 trillion kilowatt-hours (2016 est.), number one in the world.
Consumption in 2005: 2.197 trillion kilowatt-hours; In 2000: 1,206 trillion kilowatt-hours.
Exports: 18.91 billion kilowatt-hours (2016 est.), tenth in the world
Imports: 6.185 billion kilowatt-hours (2016 est.), 33rd in the world.
Installed generating capacity: 1.653 billion kilowatts (2016 est.), number one in the world.
The kilowatt-hour is a unit of energy equal to one kilowatt of power sustained for one hour. [Source: CIA World Factbook, 2022]
Huaneng Power International is one of the largest Chinese power companies Based in Beijing and listed on the Hong Kong stock exchange, it mainly develops, builds and operates large power plants. The State Power Corporation was the second largest company in China based in revenue. It once dominated the energy industry in China. In 2002, it was broken up into two companies with stakes in the transmission grid and four separate power-producing companies. The theory was competition would make the industry more efficient. Thus far the plan has not worked and some doubt its wisdom. The largest of the 2002-created companies is the State Grid Corporation of China. See Below
Electricity Production in China
China is the world’s largest electricity producer. It generated about 6,712 terawatthours (TWh) of net electricity in 2018, an increase of more than 7 percent from 2017. Higher generation growth was strengthened by a return to growth in the industrial sector and strong growth in the service and residential sectors. Higher use of technology in manufacturing and other sectors is a significant driver of electricity demand. In addition, infrastructure expansion bolstered electricity demand in the steel and cement sectors. More transitions from coal to electricity for residential and commercial heating purposes is contributing to a smaller portion of the power demand growth. Estimates by the Chinese government report that power generation rose by about 5 percent in 2019. The economic slowdown during late 2018 and 2019 reduced electricity demand. Further erosion of electricity demand growth occurred as a result of the effects of COVID-19 containment measures on China’s economy and industrial output. [Source: U.S. Energy Information Administration country analysis briefs, September 30, 2020]
Most electricity in China comes from coal-burning thermal plants. China plans to rely on more electric generation from nuclear, renewable sources, and natural gas to replace some coal-fired generation to reduce carbon dioxide emissions and the heavy air pollution in urban areas. China is exploring every avenue to produce more electricity: biomass, hydro, solar to reduce its reliance on coal and oil. As of the early 2010s, China declined to use combined-cycle turbines, the most efficient coal-burning technology even though it had been experimenting with it for more than a decade. It is assumed they were not built because they were too expensive and took too long to build. China’s short-sighted decisions not only made matters worse at the time they affects the country and the world for decades after decisions are made..
There were about 7,000 power stations in China in the early 2010s but only 129 of them were large enough to generate more than 1 million kilowatts. The average output per plant at that time was 55,000 kilowatts compared to 130,000 kilowatts in Japan. Low-voltage transmission lines wre required for so many small power stations, impeding the installation of power supply chains to supply wide areas.
There were 2,300 coal-fired plants in 2005. China was s adding new, mostly coal-fired capacity equivalent to the entire electrical output of France or Canada every two years at that time. Most of it came from small and medium-size thermal plants, which can be built quickly and cheaply but are inefficient.
Sources of China’s Electricity
Sources of Electricity in China: from:
Fossil fuels: 62 percent of total installed capacity (2016 est.), 124th in the world.
Nuclear fuels: 2 percent of total installed capacity (2017 est.), 25th in the world
Hydroelectric plants: 18 percent of total installed capacity (2017 est.), 93rd in the world
Other renewable sources: 18 percent of total installed capacity (2017 est.), 46th in the world. [Source: CIA World Factbook, 2022]
Fossil fuels, primarily coal, accounted for 69 percent of power generation sources in 2018. Coal is expected to remain the dominant fuel in the power sector in the coming years, while natural gas is replacing some of the coal-fired capacity in the eastern part of the country where power demand is higher and in the northeastern region where stricter environmental regulations have reduced coal-fired power production in this area. Natural gas is gradually gaining shares of the electricity generation portfolio, but it still accounted for less than 4 percent in 2018. The government intends to replace older coal-fired units with ultra-low emission technology and allow cities to build clean coal heating systems. [Source: U.S. Energy Information Administration country analysis briefs, September 30, 2020]
China’s government has a goal to produce at least 15 percent of total energy consumption by 2020 from non-fossil fuel sources (up from 12.7 percent in 2018) as it aims to address environmental issues and replace some coal-fired generation. To this end, China is encouraging investment in renewable energy and accompanying transmission infrastructure through financial and economic incentives. Altogether, hydropower and other renewable projects generated more than 1,800 Terrawatt hours of net electricity in 2018, an 11 percent increase from 2017 levels. Terawatt hour (TWh)is a unit of energy used for expressing the amount of produced energy, electricity and heat.
In 2018, China was the world’s largest wind generator at about 366 Terrawatt hours, 20 percent higher than the level in 2017. The government has encouraged investment in grid development and measures to improve flexibility in the transmission system, especially during peak hours. Several ultrahigh voltage (UHV) transmission lines that carry electricity over long distances began operations since 2014, and more are scheduled to come online by 2020. However, some of these UHV projects are reportedly delayed or underutilized.
Solar power is the fastest-growing electric generation source. Net generation in 2018 was 178 Terrawatt hours, 51 percent higher than in 2017.79 Inadequate transmission capacity has curtailed some solar generation from reaching the grid. As with wind projects, the government is setting policies to limit new solar projects in regions that have low utilization and high curtailment rates. China has been reducing the subsidies for solar power investments since 2016, especially in utility-scale projects, to alleviate some of the current overcapacity.
Although nuclear generation is a small portion of the country’s total power generation portfolio, China is actively promoting nuclear power as a clean, efficient, and reliable source of electricity generation. China generated about 272 Terrawatt hours of net nuclear power in 2018, accounting for 4 percent of total net generation. However, the country rapidly expanded its nuclear capacity after 2015, which will likely boost nuclear-fired power production in the next several years. As of August 2020, China’s net installed nuclear capacity was nearly 46 gigawatts (GW), more than half of which was added since the beginning of 2015. Companies in China are constructing an additional 11 GW of capacity, about 18 percent of the global nuclear power capacity currently being built. These plants are slated to become operational by 2025, and several more facilities are in various stages of planning.
Electricity Generating Capacity in China
China’s installed electricity generating capacity was an estimated 1.9 terawatts (TW) at the end of 2018. As China’s generating capacity expanded during the past several years in response to the country’s economic development, capacity grew to be the highest in the world. However, a slowdown in capacity builds is expected during the next few years to reduce the capacity overhang.[Source: U.S. Energy Information Administration country analysis briefs, September 30, 2020]
Fossil fuel-fired power capacity has historically accounted for the bulk of installed capacity, and coal continued to account for most of China’s electric capacity in 2018. Power plants fueled by natural gas, nuclear, wind, and solar are gradually replacing coal’s capacity share. The government plans to limit coal capacity to 1,100 GW by 2020.
Electricity capacity jumped 20.3 percent to 622 gigawatts in 2006 from 2005 and rose by 15 percent to 720 gigawatts in 2007. It is estimated that China’s total electricity demand will reach 2,600 gigawatts by 2050. To supply that much energy China has to build the equivalent of four 300-megawatt plants every week for 45 years.
Heat waves drive power consumption to record highs. During one in June 2022, Reuters reported: “Power consumption in several Chinese regions rose to record highs as persisting heatwaves spurred the use of air conditioners to help people cool off. Monitoring data from the national power grid showed that electricity loads soared in the provinces of Shandong, Henan, Shaanxi as well as Xinjiang, and reached all-time highs, state television said. Power grids in the northern and central regions were already hitting record levels of power consumption since last week, when temperatures started reaching above 40 Celsius (104 Fahrenheit). The power load in the eastern province of Shandong, which is also the second most populous with more than 100 million people, reached 97.58 million kilowatts, its fourth new high this summer. [Source: Reuters, June 28, 2022]
Development of Electric Power in China
From 1949 to the mid-1980s, China pursued an inconsistent policy on the development of electric power. Significant underinvestment in the readjustment period, starting in 1979, caused serious power shortages into the mid-1980s. Although China's hydroelectric power potential was the world's largest and the power capacity was the sixth largest, 1985 estimates showed that demand exceeding supply by about 40 billion kilowatt hours per year. [Source: Library of Congress, 1087*]
Because of power shortages, factories and mines routinely operated at 70- to 80-percent capacity, and in some cases factories only ran for 3 or 4 days a week. Whole sections of cities were frequently blacked out for hours. China's leaders began to acknowledge the seriousness of the power shortage in 1979. The government took no positive steps until the mid-1980s, when it announced import of 10,000 megawatts of thermal power-plant capacity to serve the east's large population centers. It also launched a nationwide campaign to create an additional 5,000 megawatts of electric-power capacity. Under the Seventh FiveYear Plan, China planned to add 30,000 to 35,000 megawatts of capacity, a 55-to-80-percent increase over previous five-year plans.*
In 1986 China's total generating capacity was 76,000 megawatts: 52,000 from thermal plants and 24,000 from hydropower sources. At that time China planned to construct large generators with capacities of 100 to 300 megawatts to increase thermal power capacity. The new, larger generators would be much more efficient than generators with capacities of only 50 megawatts or less. With the larger generators, China would only have to increase coal consumption by 40 percent to achieve a 54-percent increase in generating capacity by 1990. Foreign observers believed that as China increased its grid network it could construct power plants close to coal mines, then run power lines to the cities. This method would eliminate the costly and difficult transportation of coal to smaller urban plants, which had already created a significant pollution problem.*
The leadership decided to build thermal power plants to meet the country's electricity needs, because such plants were relatively inexpensive and required construction lead-times of only three to six years. In 1985 approximately 68 percent of generating capacity was derived from thermal power, mostly coal-fired, and observers estimated that by 1990 its share would increase to 72 percent. The use of oil-fired plants peaked in the late 1970s, and by the mid-1980s most facilities had been converted back to coal. Only a few thermal plants were fueled by natural gas. Hydropower accounted for only about 30 percent of generating capacity. Observers expected that during the Seventh Five-Year Plan, China would continue to emphasize the development of thermal power over hydropower, because of the need to expand the power supply quickly to keep pace industrial growth. However, in the long term, hydropower gradually was to be given priority over thermal power.*
China's electrical generating capacity was estimated to be 338.3 gigawatts in 2003, up from 115.5 million kilowatts in 1988. Total output of electricity increased from 545 billion kilowatt-hours in 1988 to 1,098 billion kilowatt-hours in 1998. . About 82 percent of output was from fossil fuels, 16.8 percent from hydropower, and 1.2 percent from nuclear power. In 2003, electrical power output was estimated at 1,807 billion kilowatt-hours, of which 1,484 billion kilowatt-hours hours are from thermal sources, 279 billion kilowatt-hours from hydroelectric sources, and 42 billion kilowatt-hours from nuclear sources. [Source: Worldmark Encyclopedia of Nations, Thomson Gale, 2007]
State Grid — which operates the vast networks of power distribution lines across 26 of China’s 32 provinces — is one of the world’s largest companies. Officially known as the State Grid Corporation of China (SGCC), the state-owned electric utility corporation is the largest utility company in the world, and as of 2020, the world's second largest company overall by revenue, behind Walmart. In 2016/17 it was reported as having 927,839 employees, 1.1 billion customers and revenue equivalent to US$363.1 billion. ranking 24th on the Fortune Global 500, up from US$133 billion in revenues in 2007. [Source: Wikipedia +]
State Grid has developed a commercial power line that carries 1 million volts as opposed to the United States standard of 764,500 which is used in much of the world. The new “ultrahigh transmission” are regarded as a major breakthrough. They are more efficient over long distances and could help reduce pollution by moving power plants away from populated areas. The State Grid’s economic research institute predicts that electricity demand will rise 85 percent in China between 2010 and 2020.. As part of its plan to expand abroad, it signed a 25-year, $3.9 billion contract with Philippines in January 2009. In 2014, the general manager of State Grid Shanghai Municipal Electric Power, Feng Jun, was detained in an anti-graft operation overseen by the commission. In 2017, his assets (worth about US$8 million) were seized, and he was sentenced to life in prison.
Founded in 2002 and headquartered in Beijing, State Grid has operation in the Philippines (through National Grid Corporation of the Philippines), Australia, Brazil, Italy, Portugal, Greece
and Chile. Headed by Chairman Shu Yinbiao, it provides electrical grid, electric power transmission and nuclear power transmission
Revenue: US$363.1 billion in 2017
Operating income: US$11.7 billion.
Net income: US$ 10.2 billion in 2015
Total assets: US$ 585.3 billion in 2017
Total equity: US$ 207.3 billion in 2015.
Number of employees: 1.566 million in 2019 +
Electricity in Remote Areas in China
Some 100 percent of all Chinese household now have electricity, up from 98 percent in the early 20101. The two percent that don’t electricity were generally in remote mountain villages. In 1995, 120 million Chinese lived without electricity but in 2010 only about 25 million did. Theoretically everyone in China has electricity now. .
In remote areas villages near the main roads may have had electricity since 1990s. They have enough energy to power refrigerators, electric stoves, televisions, water filters and washing machines around the clock. A three-hour walk up a river brought one to villages that had electricity since the early 2000s and received enough energy to keep appliances running 24 hours day. Two hours further upriver the villages have had electricity since the late 2000s and have power supplies from 8:00am and to 12:00 midnight, long enough to extend farming time because many activities formally done during daylight now can be done after dark. Six more hours up river brought one to villages where electricity has been available only since the 2010s and is only on at night from 7:30pm and 10:30pm, long enough for villagers to watch television and read books under electric lights.
In some remote villages energy is supplied by coffee-can-size hydro generators that sit on top of some bricks along a riverbank and provides light and television for five hours. Perhaps the profoundest impact of electricity has been the spread of television using satellite broadcasts and the providing lights. In some places villagers no longer have to spend hours collecting pine branches for torches. Refrigerators have allowed farmers to preserve meat without having to salt it and gives them more flexibility when to harvest fruits and vegetables.
Inefficient Electricity Infrastructure in China
The whole electric power system — from generation to transmission to usage — is very inefficient. Some power plants consume huge amount of coal but are not flexible enough to adjust production with peak and off-peak consumption times
State-run distribution companies do a poor job getting energy to where it s needed when it needs it. The antiquated transmission grid is poorly coordinated and, in many cases, outfit with out of date technology. It cannot automatically reroute power from one region to another as demand and supply rise and fall, which makes it difficult or impossible to move energy from areas with surpluses to areas with shortages.
Because China traditionally has not had the resources to build a nationwide electricity grid it has built power stations as close as possible to users. This strategy is fine except when there is power failure at one station and there is no back up
China limits increases in electricity prices which encourages waste. In 2007 there was some discussion of raising prices to compensate for the higher coal costs.
Heavy industry eats up too much of China’s electricity supply. Steel, nonferrous metals, cement and chemicals consumer 29 percent of China’s electricity.
Electricity consumption has been keeping pace with economic growth, increasing about 10 percent a year since 2000, but the construction of electricity infrastructure and the installation of power transmission lines has lagged behind. the problem is particularly acute in coastal areas where economic activity has created high demand for electricity and power outages have occurred with some regularly since 2002.
Electricity Policy and Prices in China
In August 2010, the Chinese government ordered more than 2,000 companies in high-polluting and energy-intensive plants to close down outdated plants in an effort to meet environmental targets. A total of 2,087 firms in steel, coal, cement, aluminum and glass were affected. Most were not ordered to shut down completely but rather shut down units in their facilities that were particularly bad for wasting energy and generating pollution. Companies that failed to abide by the orders risked being deprived of government funding and loans. Some that were slow to make changes had their energy supplies cut for a month.
In July 2010, China ended preferential power rates for energy-intensive industries, which had deprived the government of $2.2 billion in revenues according to Chinese government figures.
Electricity prices are fixed by the government but the cost of oil and coal are not fixed so when the price of coal and oil rise, the electricity-generating companies lose money because they can not raise their prices to adjust. Although authorities have so far kept residential power prices unchanged, concerns are growing that the hikes may eventually be passed on to consumers.
In the 2000s got 70 percent of its electricity from coal burning plants (at a cost of $0.0375 to $0.05 per kilowatt hour), 3 percent from natural gas; 20 percent of its electricity from the hydroelectric power (at a cost $0.0125 yo $0.025 per kilowatt hour), 5 percent from petroleum-fired plants and 2 percent from nuclear energy.
Chinese utilities don;t always do what they are told. In 2011. Keith Bradsher wrote in the New York Times,”Balking at the high price of coal that fuels much of China’s electricity grid, the nation’s state-owned utility companies are defying government economic planners by deliberately reducing the amount of electricity they produce. The power companies say they face financial ruin if the government continues to tightly limit the prices they can charge customers, even as strong demand is sending coal prices to record levels. The chairwoman of one giant utility, China Power International, recently warned that one-fifth of China’s 436 coal-fired power plants could face bankruptcy if the utilities cannot raise rates.” [Source: Keith Bradsher, New York Times, May 24, 2011]
“The utilities” go-slow tactics include curtailing the planned expansion and construction of power plants, and running plants for fewer hours a day. And in a notable act of passive defiance, the power companies have scheduled an unusually large number of plants to close for maintenance this summer,”right when air-conditioning season will reach its peak. So far there have been no public confrontations between Beijing officials and utility executives. But the dispute indicates that China’s unique marriage of market competition and government oversight may be starting to fray after three decades of phenomenal economic success.”
Electricity Shortages in China
Electricity shortages were a serious problem in China but are not as bad now as they used to be. Black outs, brown outs and shortages occured even though power-generating plants were being built at a record pace. Among the hardest hit areas were places where economic growth was very high such as the Shenzhen area in Guangdong Province and the Yangtze River Delta, which includes Shanghai and the provinces Zhejiang and Jiangsu.
In the summers of 2003, 2004 and 2005 China was forced to ration energy and limit production in industrial areas even though it had expanded its generating capacity by the equivalent of the energy used in Spain. In 2004, China had its worst blackouts in decades. They were largely caused by railroad bottlenecks that prevented coal from getting to power plants. These issue were largely resolved with the subsequent investments in more rail lines.
In the summer of 2005, China’s four major cities and 18 of 27 provinces experiences blackouts. Beijing set a daily record for electricity consumption and generating capacity as air conditioners were cranked up in the high summer heat. Local governments used phone and text-message systems to send out warnings of impending black outs. When these messages were received generators kicked on. Many factories have generators to supply electricity when there are blackouts. Running these generators is expensive. They use a lot diesel fuel. China now is the world’s leading buyer of industrial generators.
There were particularly bad electricity shortages in China in 2011 Reporting from Yiyang in Hunan Province, Keith Bradsher wrote in the New York Times, “Since March, responding to the power shortages, government officials in six provinces have begun rationing electricity, including here in Hunan province. At least five more provinces are preparing to do so, according to official reports. In Yiyang, a town of 360,000 in south-central China, electricity shortages are so severe this spring that many homes and businesses receive power only one day in three. Even gasoline stations in this region are silent more days than not, because the pumps lack electricity.” [Source: Keith Bradsher, New York Times, May 24, 2011]
Impasse between government and industry and surging electricity demand were causes. "Blackouts appear to be the worst in smaller towns like Yiyang here in Hunan, one of China’s largest and most populous provinces. The power shortages are threatening to curb the explosive growth the province has experienced since the opening in late 2009 of a high-speed electric train link to prosperous Guangdong province to the south, which helped companies tap Hunan’s cheaper land and labor force. In rationing electricity, Hunan officials have given priority to big cities like Changsha, the provincial capital. Even there, though, industrial districts are blacked out one day in three. In Yiyang, meanwhile, multiday blackouts have ruined a tiny restaurant run by Xu Zhanyun, 48, who now must cook meals over lumps of coal instead of his electric stove. “I have so much food in my refrigerators that all went bad,” he said. There is running water only every other day because the pumping station requires electricity. And so he must haul water from a well — as he did as a boy, before China’s economy surged. In other cities, factories require employees to work at odd hours when electricity is available.”They shut down the electricity for a day every three days,” said Jin Jianping, manager of an umbrella factory in Ningbo, in east-central China. “We just arrange night shifts for everyone.”
Consequences of Electricity Shortages in China
In some places the electricity is turned off one out of every four days. Electric heaters are banned; hotels turn off the heat; people avoid taking elevators out of fear of being trapped by a blackout. Even in big cities children do their homework by candle light because of rolling blackouts. Some places have even forced to turn off traffic lights.
Energy shortages have forced factories to cut production and ration their energy supplies. In some cases factories operate only a night when demand for energy is low. In other cases they have been forced to shut down completely for more than two weeks. The shortages were particularly hard on industries that need a lot of energy like aluminum, steel and cement and ones with furnaces that need a constant supply f energy or they break. Factories in Guangdong were told that their power would be cut one day a week, then two days a week, then five days a week, during peak hours. Under these conditions the factories switched production to the night and on weekends of bought their own diesel generators, which increased manufacturing costs by around 5 percent.
In Shanghai there have been runs on power generators and power has been cut to factories while neon lights were allowed to keep blinking on the Bund; decorative lights on skyscrapers are kept on late into the night; and air conditioning is kept on the fancy shopping malls so that everything seems to hunky dory to visitors ib Shanghai. Power outages have been a boon for makers of diesel generators of all sizes. General Electric, Siemens and Mitsubishi heavy Industries have won large contracts supplying turbines and other technology for China’s power-generating plants.
During the 2011 shortages, Keith Bradsher wrote in the New York Times, “Meanwhile, blackouts are starting to slow the nation’s torrid growth of energy-intensive industries like steel, cement and chemicals. Unlike garment makers and other small manufacturers, the big factories cannot easily switch to backyard diesel generators. To accommodate businesses that do use diesel back-ups, China banned exports of diesel fuel to conserve scarce supplies. As power-deprived factories in China have less demand for raw materials, the impact has rippled around the world among China’s suppliers as well, contributing to 10 percent declines in global prices for commodities like iron ore and copper." ” [Source: Keith Bradsher, New York Times, May 24, 2011]
Causes of Electricity Shortages in China
Electricity shortages are primarily the result of the booming economy outstripping energy supplies and the inability of the energy producers to keep up with industrial demand. Industries are increasing output; people are buying more energy-consuming appliances; construction and development need energy-hungry industries like steel and cement to keep going.
Energy shortages have been exacerbated by droughts reducing water used in hydroelectric plants, depletion of coal supplies in some areas; closing of coal mines due to worries about mine safety and pollution; slowness in conversion from coal to oil; and the inability to build electric infrastructure fast enough. Bottlenecks hold up the transportation of energy supplies. Railways can not move coal fast enough. Tankers have to wait days in the ports before they can be unloaded because port facilities are not adequate.
The supply of energy is tightly regulated and is still largely controlled by Communist planners who think in terms of five-year plans. These five year plans are largely to blame for China’s energy shortages. Building electricity infrastructure takes advanced planning. In the late 1990s plans for the early 2000s were made after the Asian financial crisis and growth rates were predicted to be around 7 percent. When 10 percent growth rates materialized in the 2000s, not enough power stations had been built, especially in Guangdong, where growth rates of 15 percent materialized. the result: energy shortages,
Weather can also be a factor, especially in areas that rely on hydropower. A severe drought on Guangxi in 2004 produced massive power losses due to lack of water for hydro power generation. More than 1,100 reservoirs went dry. During the worst drought in 50 years in Guangdong Province in 2005, some factories only operated during the night because that was the only time electricity was available. During a severe drought in the southwestern provinces of Yunnan, Guangxi, Sichuan and Guizhou in 2009-2010,more than 90 percent of the hydro power stations in Guizhou, the worst-hit province, were forced to stop operating.
Power Shortages in China in 2021
Large swathes of China were paralyzed by power shortages in September and October 2021, partly caused increased demand for electricity and at a time when coal supplies were low as global prices of the fossil fuel soared.
Caixin reported: Many parts of China have suffered severe electricity supply shortages. Local governments imposed power cuts and rationing on industrial users and even residents. The ripple effects disrupted global supply chains as textile, steel and other factories shut down and production plunged. [Source: Chen Xuewan, Zhao Xuan, Bai Yujie, Luo Guoping and Han Wei, Caixin, October 12, 2021]
"I have never seen this in my 20-year career," said a power plant staffer in Northeast China's Liaoning Province, one of the regions experiencing the worst power outages over the past few weeks. "Coal prices have nearly doubled this year." The staffer's plant was losing money on every kilowatt-hour of electricity produced, and it had enough coal to last only two days, the person told Caixin as parts of the province were hit by abrupt power cuts. The Hunan branch of State Grid Co., the country's largest electric utility company, issued a warning that coal inventories in the province were enough for only nine days of power generation. Coal-fired plants account for nearly half of Hunan's electricity.
“The perfect storm that created China's worst power crunch grew out of surging energy demand amid the post-pandemic recovery and plunging coal supplies due to the government's emission-reduction campaign. Since the beginning of 2021, China's electricity consumption has maintained a growth rate of 10 percent compared with last year as factories increased production to meet surging demand from abroad. As the first country to rebound from pandemic shutdowns, China has assumed manufacturing orders from other countries that are still struggling to contain the virus. From January to August, China's total export value hit a record 13.56 trillion yuan ($2.1 trillion), up 23.2 percent year-on-year.
The export boom beat many analysts' forecasts. "No one predicted that exports would perform so well," one financial analyst said. Surging exports also drove energy consumption beyond expectations. In the first eight months, China's power usage rose 13.8 percent, outpacing the growth of power generation by 2.5 percentage points — the largest gap since 2003. While demand surged, power plants struggled to secure enough coal to fuel generators amid declining coal supplies and rising prices.
The shortages were a blow to efforts to combat climate change. Afterwards, China reopened dozens of coal mines and scrapped production quotas, undoing earlier steps to curb emissions. China’s country's coal output hit a record of over 4 billion metric tons in 2021 --- the highest in a decade -- after imports were disrupted by the pandemic. In 2022, the Chinese government said it would support coal-produced energy and help coal-fired plants run at full capacity.
Saving Energy and Addressing Electricity Shortages in China
Effiicient heating systems
China is busy building power plants, dams and pipeline and upgrading port facilities and railroads but the construction is lagging behind demand. Many aren’t expected to be ready for a couple of years. To conserve energy, factories are encouraged to operate at off peak hours, shopping centers are encouraged to turn off neon lights and turn down the heat and air conditioning. Many companies give employees time off and shift work schedules to reduce demand for electricity. Some factories stagger their working hours, in some cases shutting down during the week and operating on weekends to keep from using energy during times of peak demand.
China is trying make its factories more energy efficient (they are currently 10 to 50 percent less efficient than factories in developed countries) by improving the efficiency of its coal boilers and electric motors; closing down particularly wasteful factories; constructing houses with more insulation and doubled glazed windows; implementing energy efficiency cars, air conditioner and refrigerators.
The government is encouraging banks to finance energy projects and allowing foreign energy companies to explore for new energy sources. It also taking away money and support of energy-sucking construction and development projects and shut down small coal power stations and stopped the construction of new small power stations. Officials in Shanghai have considered imposing restrictions on air conditioner use to prevent the collapse of the city’s electrical grid.
The five year plan issued in 2006 calls for a reduction of energy use by one fifth. Some progress has been made in making energy through the ending of coal subsides, a shift to market prices for fuels and policies that reduce pollution and encourage conservation. These kinds of improvements have reduced the need to build new power plants but not by much. In September 2010, AP reported that steel mills and cell phone factories were idled and thousands of homes were forced to go without electricity so that local government could meet their energy-saving targets.
World’s Longest, Most-Powerful Ultra-high Voltage Power Lines, in China
In 2019 State Grid Corp. of China started up the world’s longest and most-powerful ultra-high voltage power line from its far northwest to the heavily populated east. Bloomberg reported: The 1,100-kilovolt direct-current Changji-to-Guquan project stretches 3,293 kilometers (2,046 miles), the nation’s biggest electricity distributor said in a statement Wednesday. That’s roughly the distance between Los Angeles and Cleveland. The 40.7 billion yuan ($5.9 billion) project, which the company referred to as the “Power Silk Road,” was approved in December 2015 and construction started the next month. [Source: Bloomberg News, January 2, 2019,
“China has increasingly relied on UHV technology to send electricity from remote regions with excess supply to areas of higher demand. Xinjiang, where the new line starts, is home to large-scale wind and solar projects, but also the nation’s worst curtailment rates, or capacity that’s idle because of grid congestion, according to the National Energy Administration. The NEA has also banned the construction of new coal-fired plants in Xinjiang, as well as 20 other provinces, because of an expected overcapacity.
“The project is “part of the nation’s strategy to shift electricity from the west to the east to ease electricity surplus in the west, given a backdrop that such infrastructure investments can drive economy,” said Nannan Kou, head of China Research at Bloomberg NEF in Beijing. The new line, which can transmit 12 gigawatts of power, runs through Gansu, Ningxia, Shaanxi and Henan provinces before ending in the Anhui province city of Xuancheng. It can supply 66 billion kilowatt hours of electricity to eastern China annually, meeting power demand of 50 million households and reducing coal use by 30.24 million tons, State Grid said.”
Image Sources: BBC, Environmental News; Westport School; Nolls China website http://www.paulnoll.com/China/index.html ; The Stand, Environmental News; AP; China Daily and Environmental News, Wiki Commons
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.
Last updated June 2022