September 15, 2011 / 6:10 AM / in 6 years

South China power restrictions to persist into next yr -grid

BEIJING, Sept 15 (Reuters) - Power use restrictions in southern Chinese provinces will persist into the first half of next year, as shortages will not ease due to low water and coal stocks and fast-rising demand, China Southern Power Grid Corp said.

Power rationing has cut into industrial activities such as metal smelting in some regions and China’s power consumption grew at the slowest pace this year in August, with the consumption increase by heavy industry sinking to the single-digits for the first time since February.

China Southern Power Grid Corp, operator of grid networks in China’s export hub of Guangdong, hydropower-rich Guizhou, Yunnan and Guangxi and the island province of Hainan, said power shortfalls in the five provinces would amount to 14 gigawatts in the fourth quarter.

The deficit will be between 10 GW to 15 GW in the first half of next year, the grid firm said.

Last month, the grid ordered the shifting of about 10 GW of demand from peak hours due to shortages and warned shortages would last for “a longer period of time” even though the summer heat was tapering off.

The areas serviced by China Southern Power Grid Corp have 170 GW of power generating capacity, more than 40 percent of which is from hydroelectric stations.

Current water storage in the Hongshuihe and Wu Rivers were 80 percent less than a year earlier, the lowest on record, and water flows in the two rivers are estimated to be 60 to 80 percent less than normal in September and 40 to 50 percent less than usual in winter, the grid firm said.

Water flows in Lanchang River, upstream of the Mekong River, are expected to be 30 percent less than normal.

Insufficient coal production, poor coal quality and misalignment between coal and power prices have also curbed power output, and coal supply outlook in the fourth quarter and first half of next year allows little room for optimism, the grid firm said.

It will strictly restrict power consumption in energy-intensive and high polluting industries and ensure supplies to residents, public facilities and important users.

The firm said it had asked local governments to subsidise additional power generation and tried to buy electricity from every possible thermal power source.

The grid firm did not specify the subsidies or the possible thermal power sources, which could be gas or diesel fired power generation that is more expensive than coal-fired generation and makes up only a tiny portion of power supplies. (Reporting by Jim Bai and Chen Aizhu; Editing by Jonathan Hopfner)

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