NDRC tackles power shortage

The country is to accelerate the development of thermal power and power grid projects in order to tackle the worst power shortage in years, said Liu Tienan, an official with the National Development and Reform Commission (NDRC) Friday.

The NDRC will approve a group of thermal power and power grid projects soon to ease forthcoming power shortage, said Liu.

Some thermal power and power grid projects already under construction will be put into operation as soon as possible, reported The Beijing News, citing an official with the NDRC.

According to Liu, power supplies in Northwest and Northeast China could manage to hit a balance this year, while other places in the country will suffer from tight supplies.

Combined power shortages this year are expected to reach 30 million kilowatts, which makes it the worst power shortage since 2004.

“The key to tackling the current power shortage is to fully tap into the potential of existing thermal power plants, instead of building new ones,” Lin Boqiang, director of the Center for Energy Economics Research at Xiamen University, told the Global Times Sunday.

Many generators have chosen to produce in less than capacity due to surging thermal coal prices. Prices for thermal coal have risen more than 6 percent since the beginning of this year to over 840 yuan ($129.62) per ton, but electricity prices have not been raised accordingly.

The government raised power prices that grid operators charged industrial, commercial and agricultural users in 15 provinces by about 3 percent earlier this month, but the modest hike is still not enough to cover generator losses.

“Thermal coal accounts for 60 to 70 percent of the total cost of thermal power generators,” said Li Chaolin, a researcher with the China National Coal Association, adding that prices for thermal coal will likely continue to rise.

“An additional 10 percent of electricity will be generated if the generators are fully utilized,” said Lin.

Media reports said the current power shortage could continue into next year.

“The power shortage will continue unless a reform on the pricing mechanism of electricity takes place,” said Lin, adding that electricity prices should be tied up to the price of thermal coal, in order to guarantee motivation for generators to produce electricity.

Thermal power accounts for some 75 percent of the total electricity consumed in China.

Source:Global Times

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