Major Chinese Industrial Hub Braces for More Power Shortfalls Amid Energy Crisis
14:38 GMT 11.10.2021 (Updated: 13:54 GMT 06.08.2022)
Last week, US media reported that China's latest power crunch may "ripple through" the global economy, which has already been hit by the COVID-19 pandemic.
China’s Liaoning province has issued a level-two alert for power shortfalls for the fifth time in two weeks, warning that the shortage may stand at almost 5 gigawatts (GW).
Liaoning, which has been hit by widespread power cuts
since mid-September, is the largest provincial economy in the country’s northeast rust belt industrial region.
A department responsible for industry in the province said in a notice on Monday that “the biggest power shortage could reach 4.74 gigawatts (GW) on 11 October”.
The notice added that an order to curb power use had been put in place from 6 a.m. (2200 GMT on Sunday).
The alert comes after the province issued similar warnings in late September, which saw the daily power shortage reach 5.4 GW in Liaoning. The shortfalls left hundreds of thousands of households without electricity and prompted industrial plants to suspend production.
23 December 2020, 00:32 GMT
In a separate development on Monday, Vice Premier Han Zheng said in a statement that China will "strictly control" coal-fired power generation projects and "strictly limit" the increase in coal consumption over the 14th Five-Year plan period from 2021-2025.
The statement followed a report by Moody's Investors Service that claimed China's electricity cuts “will add to economic stresses, weighing on GDP growth for 2022”. The survey asserted that GDP-related risks “could be larger as disruptions to production and supply chains feed through”.
This was preceded by a Wall Street Journal (WSJ) report on Sunday about China’s power crunch possibly causing "a global energy squeeze", which may then damage the post-pandemic economic recovery.
The WSJ also cited Ting Lu, chief China economist at Nomura Holdings, as saying in a note to clients that global markets
"will feel the pinch of [China's] shortage of supply from textiles, toys to machine parts".
The major power shortfalls in the north-western provinces of Heilongjiang, Jilin, and Liaoning, as well as the southern province of Guangdong reportedly resulted in “major disruptions to the daily lives of people and business operations". The power outages occurred as Beijing actively seeks to reduce carbon dioxide emissions, the use of coal, and develop a green economy.