Southern China's Freezing Weather Forces Closure of Power Generating Units
China Datang Corp. shut some power- generation units after sleet and freezing weather in the southern part of the nation disrupted fuel deliveries, the provincial government said.
Units in Hunan’s Leiyang plant that’s owned by China Datang, the nation’s second-largest electricity producer, halted operations due to a coal shortage, the provincial government said in a statement on its website today. The company’s Beijing- based spokesman, Huang Yuan, wasn’t immediately available to comment.
Freezing weather in China’s southern provinces and municipalities of Jiangxi, Hunan, Chongqing, Sichuan and Guizhou forced the evacuation of 58,000 people from their homes, the official Xinhua News Agency reported on Jan. 5. Two power plants with a combined capacity of 2,070 megawatts in Sichuan were shut because of the ice and snow, Xinhua News Agency reported then.
Provinces including Guizhou and Henan have restricted coal transportation to Hunan because of a power shortage in their own regions, the government statement said. Hunan has ordered alternative supplies of the fuel, it said.
A cold front is expected to hit the central and eastern parts of China during Jan. 8 to Jan. 10, leading to temperature drops of at much as 10 degrees Celsius, according to a report today on the website of the China Meteorological Administration.
Sufficient Electricity
China Southern Power Grid, the nation’s second-largest electricity distributor supplying power to five southern provinces of Guangdong, Guangxi, Yunnan, Guizhou and Hainan, activated its Level-2 Disaster Response Plan yesterday, the company said on its website. The persistent cold weather may threaten its grid operations, it said.
The China State Electricity Regulatory Commission ordered producers and distributors to ensure sufficient power to areas affected by the cold snap. While the network in the region is operating normally, some power lines in Guizhou are covered by ice, the agency said on its website.
China Petroleum & Chemical Corp., the country’s largest oil refiner, will boost fuel supplies to the south of the country affected by the cold wave, parent China Petrochemical Corp. said.
Sinopec, as China Petroleum is known, will step up deliveries to Guizhou, Hunan and Chongqing by 24 percent this month compared with a year earlier, the parent said in its newsletter.
Australian Floods
Power-station coal prices at Australia’s Newcastle port, an Asian benchmark, rose 3 percent in the week to Dec. 31, according to data from McCloskey Group, as floodwaters inundated an area in Queensland state the size of France and Germany, shutting coal mines. Benchmark prices at Qinhuangdao, China’s largest coal port, fell to a two-month low on Jan. 4 as average nationwide winter stockpiles remained ample, according to data from China Coal Transport and Distribution Association.
“We’ll see China’s spot thermal coal prices start to edge higher again because the price of seaborne supplies has become uncompetitive to Qinhuangdao prices,” Andrew Driscoll, head of resources research at CLSA Asia-Pacific Markets, said by telephone from Hong Kong.
“As cold winter continues and we are entering the Chinese New Year season, we expect food prices to continue to rise and CPI inflation to stay above 4.5 percent on average in the first quarter 2011,” Wang Tao, a Beijing-based economist at UBS AG, said in a report this week.
Hunan and Guizhou were among China’s worst-affected areas when the nation was hit by its most severe snowstorms in 50 years in early 2008. The provinces had only half their normal power capacity at the time, the National Development and Reform Commission, the country’s top economic planner, said in February 2008.
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To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net
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