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October 1, 2021

China orders power companies to avoid blackouts at any cost

China’s ruling party has ordered power companies to secure winter power at any cost, after power rationing caused blackouts in several regions.

By Matt Farmer

China’s ruling party has ordered power companies to secure winter power at any cost, after power rationing caused blackouts in several regions.

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At an emergency meeting this week, Chinese Vice-Premier Han Zheng told power companies that his party would not tolerate blackouts. Since last week, power shortages have massively disrupted the industries across China, with little sign of easing.

At least 19 of mainland China’s 31 provinces have introduced power rationing in September. These provinces account for at least two-thirds of the country’s gross domestic product. As a result, manufacturing has decreased, and international metal prices have fallen to match the decreased demand.

Goldman Sachs and Nomura banks have decreased their annual growth forecasts for China because of disruption caused by the power crisis.

More than half of China’s power comes from burning coal. A political dispute with Australia caused China to ban imports of Australian goods, which includes coal. China now buys more expensive coal from neighbouring India, leading to a rise in the cost of coal generation.

Chinese leaders have now ordered their coal mining companies to raise coal production in order to drive down prices. Miners will be allowed to exceed their annual quota, with leaders hoping this will drive down coal prices.

Han Xiaoping, chief analyst at china5e.com, told state-controlled media outlet Global Times that it is now “rather common” for coal-fired power plants to lose money on the electricity they generate.

However, the ruling party previously ordered that generators should not pass costs on to consumers. This caused generators to limit production in order to maintain tariffs, and power shortages soon followed.

To protect supplies to homes and shops, industry and manufacturing facilities took the blackouts first. The Global Times report, credited to staff writers, quotes the partially-anonymised owner of a textile factory in Jiangsu Province. His factory lost power on 21 September, and will not regain power until at least 7 October. Until then, staff remain out of work.

The factory owner said that his factory was one of more than 100 across the Dafeng district of Yantian that had lost power. The report also said that “industry insiders” believe shortages may worsen as temperatures fall into winter.

Authorities have also encouraged domestic and commercial users to conserve power and minimise air conditioning use.

Other factors have also contributed to high power costs. Some provinces have started rationing power in order to meet their annual consumption targets, set by China’s central government. At least three provinces started rationing power before September.

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Delve into the renewable energy prospects for Morocco

In its new low greenhouse gas (GHG) emission strategy to 2050, submitted to the United Nations (UN), the Ministry of Energy Transition and Sustainable Development (MEM) of Morocco suggested to raise the share of renewable capacity in the country’s total power installed capacity mix to 80%.   Morocco currently aims to increase the share of renewables in total power capacity to 52% by 2030. The new strategy plans to increase the share of renewable capacity to 70% by 2040 and 80% by 2050.  GlobalData’s expert analysis delves into the current state and potential growth of the renewable energy market in Morocco. We cover: 
  • The 2020 target compared to what was achieved 
  • The 2030 target and current progress 
  • Energy strategy to 2050 
  • Green hydrogen 
  • Predictions for the way forward  
Download the full report to align your strategies for success and get ahead of the competition.   
by GlobalData
Enter your details here to receive your free Report.

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